Netflix' continues to exhibit serious difficulties grasping basic economics, competition and value.

First, Netflix is lowering its value to customers.

• Netflix now charges its subscribers' 60% more in September in return for lots less premium content available for subscribers in February, as Netflix just lost Starz,its top premium content provider, which supplies 22 of Netflix' top 100 movies.

Second, Netflix is shifting its costs to its customers.

• Netflix used its abrupt and controversial 60% price hike to force many of its core users away from the DVD model that many prefer and have the viewing technology for (but costs Netflix more), to the streaming model, (which Netflix prefers because it costs them less) even if it costs many of their DVD customers to spend lots more to upgrade their viewing technology to view the streamed content in the way they can currently view DVDs.

Third, Netflix is chasing away the premium content its subscribers demand.

The DOJ lawsuit against the AT&T/TMobile merger has many serious flaws that will make it difficult for the DOJ to meet its burden of proof in court that this merger is anti-competitive.

• Court cases are precedent, fact, and merit driven, and DOJ's case is much weaker in those critical dimensions than most appreciate or reports indicate.
• (See DOJ's release here and the DOJ's complaint here.)

Importantly, if the DOJ ultimately cannot prove this merger is anti-competitive in a court of law, that official legal decision would make it legally difficult for the FCC to block the merger on competition grounds under the FCC's public interest standard, especially given that the merger would bring more broadband speed more quickly to more Americans, and create jobs, which the FCC's claims are their top public interest priorities.

• Simply, the precedents, facts, and merits are friends of the proposed AT&T-T-Mobile deal.

I.   Summary of Top Ten Flaws in DOJ's Case

The DOJ's very tough enforcement agreement to not criminally prosecute Google for knowingly promoting illegal prescription drug trafficking for six years has many under-appreciated implications for Google's business and brand going forward.(See the DOJ-Google Agreement here and the DOJ's release here.)

• Simply this is a criminal non-prosecution agreement not resolution of a civil case because:
  • Only the criminal statutes that were violated authorize a $500m forfeiture penalty; and
  • The agreement explicitly empowers the Government to criminally prosecute Google at its sole discretion, if it believes Google has violated the agreement.
• In effect, this is a criminal plea bargain where Google agrees to a huge fine, cooperation with the government's ongoing investigations, and two years of probation in return for no criminal prosecution of Google.
  • Reading between the lines, the Government's undercover "sting operation" must have uncovered exceptionally incriminating and embarrassing evidence that Google did not want exposed in a long public criminal trial.

An easy way for the FCC to show respect for the President's Executive Order to eliminate "outmoded" and "excessively burdensome" regulations would be to grant the NCTA's petition for a declaratory ruling, that Section 652 of the 1996 Telecom Act, (intended to encourage incumbent local telcos and cable companies to compete in telephony and video) was not meant to prohibit pro-competitive mergers between cable companies and new entrant CLECs that didn't exist in 1996 and thus have no market power.

The FCC Sect. 652 status quo is counterproductive in perversely thwarting a central competition policy goal of the 1996 Telecom Act: i.e. promotion of cable-telco competition.

• By creating unnecessary regulatory uncertainty around actual and potential cable-CLEC mergers, at both the FCC and with local franchising authorities, the FCC effectively has created a regulatory barrier to more cable-telco competition.
• We cannot "win the future" with a broadband Internet "excessively burdened" with anachronistic analog anchors like the FCC's current interpretation of Sect. 652.

Specifically, the NCTA's petition exposes a dysfunctional local franchising authority review process that has no standards or time limits, which makes the overall regulatory review process for cable-CLEC mergers uncertain, arbitrary, and "excessively burdensome."

On hiatus for vacation.

To understand how Google is deceptively misdirecting attention away from their own ignominious record of serial property infringement by loudly accusing its competitors of being anti-competitive for enforcing their patent rights, see my new Forbes op-ed: "Google Asserts Property Rights Are Anti-Competitive."

This is important because:

• The FTC is currently investigating Google for a variety of deceptive and anti-competitive acts and behaviors;
• Google has a history of trying to distract law enforcement from focusing on Google by flinging accusations at others; and
• Infringement of competitors' property rights is arguably one of the most anti-competitive practices a dominant firm can engage in.

Few have connected the dots of how Google's serial mass infringement of competitors' property has been integral to Google's rapid monopolization of the search business and its strategy to rapidly extend that search business market power in most every direction.

Simply, no one can compete with unabashed property infringers.

Find the op-ed here.

FreePress with its "all complaints all the time" approach to advocacy has been caught once again "crying wolf" when there was no real problem or threat.

A new FCC study that shows ISPs are effectively delivering on the broadband speeds they advertise, exposes FreePress for crying wolf -- yet again.

• FreePress has to acknowledge Verizon's FIOs far exceeds advertised speeds, Comcast and Charter exceed advertised speeds, and other ISPs are more than close enough to advertised speeds to show that there is not a problem here for the FCC to be concerned about.

FreePress also continues to cry wolf about its spurious tethering" complaint against Verizon because users are prevented from unauthorized tethering of additional devices trying to bypass users' terms of service agreement.

There's more powerful evidence from Capitol Hill that the FCC's beleaguered Open Internet/net neutrality regulations are in serious trouble.

First, on July 27th, eleven GOP Senators on the Senate Commerce Committee requested in a letter, that the FCC conduct a cost-benefit analysis of the FCC's Open Internet Order, given the President's recent Executive Order directing independent agencies to reduce burdensome regulations.

In the end, the U.S. Government is highly-likely to approve the AT&T/T-Mobile merger, despite the significant opposition, because of three over-riding realities: 1) market/financial realities, 2)DOJ legal/precedent realities, and 3) FCC public-interest realities.

I.    Market Reality:

T-Mobile's leadership and owners have decided that they are unable and unwilling to invest what is necessary in order to compete going forward in the American 4G wireless market, and given that fundamental premise, the AT&T/T-Mobile merger is the optimal market outcome for T-Mobile's customers and for competition.

• T-Mobile shopped itself for a good while in order to fully test its market options and ultimately chose to merge with AT&T as the best outcome for all concerned from its perspective.

So the key baseline fact grounding the DOJ/FCC's decision processes here, is that T-Mobile's leaders/funders are effectively exiting this business one way or another long term via merger, sale or benign neglect.

Silicon Valley local merchants, who compete with Google Places, have complained to Silicon Valley's local paper, the San Jose Mercury News, that Google is effectively penalizing their online content so that in practice, no one can find them.

• See the article here: Local Business Site Challenges Google Ranking.
• See the site Google has penalized here: www.ShopPaloAlto.com.

This could have the makings of another Google antitrust complaint of interest to the FTC and/or the California Attorney General to determine if Google is being:

• Anti-competitive to an important local competitor to Google's own local offering, Google Places, or
• Deceptive in its representations of being an unbiased information broker and never manipulating search results for its own commercial benefit.

Where Google is vulnerable here, is that it is forcing its own self-serving and unappealable standard of online "authority" (which drives Google's search ranking and reinforces Google's market power), on the Silicon Valley local shopping marketplace, smack in the face of common sense and real life commercial authority in the physical marketplace.