Tech Law Journal Daily E-Mail Alert
December 28, 2009, Alert No. 2,028.
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UK Clears Ticketmaster Live Nation Merger

12/22. The United Kingdom Competition Commission (UKCC) approved the proposed merger of Ticketmaster and Live Nation. See, UKCC stated in a release that it "concluded that the merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues".

Much of the UKCC's analysis focused on the likely impact of this transaction on Eventim. The UKCC wrote in its Final Report [85 pages in PDF], also released on December 22, 2009, that the three relevant markets are ticketing, promotion, and venues.

Ticketmaster stated in a release that "Clearance of the proposed merger in the UK follows regulatory approval in Norway and Turkey. Separate regulatory reviews are continuing in the United States and Canada, where the parties remain optimistic there will be a successful outcome."

The two companies announced their proposed merger in February of 2009. The Department of Justice's (DOJ) Antitrust Division is still sitting on this transaction.

Rep. Bill Pascrell (D-NJ) stated in a release that he is "disappointed" by the UKCC's decision. He added that "While in the United Kingdom they only control about 50 percent of the market, the two companies combined control between 70 to 80 percent of the market here in the United States."

Several interest groups in the U.S. have joined in opposing this transaction, including the National Association of Ticket Brokers (NATB), American Antitrust Institute (AAI), Consumer Federation of America (CFA), and U.S. Public Interest Research Group (USPIRG). See, AAI release.

On December 16, 2009, Rep. Pascrell, Rep. Joe Courtney (D-IL), Rep. Michael Capuano (D-MA), Rep. Steve Cohen (D-TN), Rep. Peter Welch (D-VT) and others held a news conference at which they argued that the DOJ should block the merger. See, Rep. Courtney's release.

Also, Rep. Pascrell, Rep. Courtney and 48 other Representatives sent a letter [PDF] to Christine Varney, head of the DOJ's Antitrust Division, on July 27, 2009. They wrote then that "Ticketmaster Entertainment is the industry's overwhelmingly dominant ticket seller, its largest provider of talent management services, and its second largest reseller of tickets. Live Nation is the industry's largest promoter of live entertainment events, the second largest ticket seller, and the second largest owner/manager of entertainment venues. The transaction therefore would create an entity, Live Nation Entertainment, which would enjoy a virtual stranglehold over the live entertainment industry."

They added that the merger would "exacerbate the already significant barriers to entering the ticket sales market".

The Representatives also wrote that "the proposed merger would create a vertically integrated entity whose power would extend across five of the industry's six main markets. An entrant or competitor in any of these markets would face the merged firm not only as a market rival, but also as a power in other critically related markets. A new promoter, for example, needs artists willing to perform and venues appropriate for staging the event. A new venue needs artists and promoters willing to book the facility. The vertically integrated firm can withhold these critical inputs, and its rival will suffer. To avoid such problems, an entrant would need to enter the industry on several levels at once, a burden that makes entry far more daunting and costly. The combined entity could therefore use its five-market vertical integration to restrain trade both by chilling entry and disciplining rivals."

Rep. Pascrell and others introduced HR 2669 [LOC | WW], the "Better Oversight of Secondary Sales and Accountability in Concert Ticketing Act of 2009", or "BOSS ACT", on June 2, 2009.

This bill would require that the Federal Trade Commission (FTC) write rules that regulate the sales, distribution and pricing of tickets. The bill would require one set of rules for primary sales, distribution and pricing, and a second set of rules for the secondary market.

This bill would reach not only live music concert tickets, but also, any "ticket of admission to a sporting event, theater, musical performance, or place of public amusement of any kind".

The bill would also require the registration of both "secondary ticket seller" and "online ticket marketplace. The bill defines "online resale marketplace" as "an Internet website -- (A) that facilitates or enables the resale of tickets by secondary ticket sellers; or (B) on which secondary ticket sellers offer tickets for resale".

This bill would give enforcement authority to the FTC and states. It would not preempt any state laws, except those inconsistent with this bill and regulations promulgated thereunder.

FCC Reports on ILEC Quality of Service Trends

12/24. The Federal Communications Commission's (FCC) Wireline Competition Bureau's (WCB) Industry Analysis and Technology Division (IATD) released a report [43 pages in PDF] titled "Quality of Service of Incumbent Local Exchange Carriers".

This report finds that for several indicators quality of service (QOS) is deteriorating, and that among the large carriers, Verizon far and away receives the highest number of complaints per million lines. See also, FCC release.

This report states that the FCC does not impose service quality standards on communications common carriers, but that it "monitors quality of service data submitted by incumbent local exchange carriers that are regulated as price-cap carriers" and "summarizes these data and publishes a report on quality of service trends annually".

The FCC monitors eight QOS categories: "average complaints per million lines, percent of installation commitments met, lengths of installation intervals, lengths of repair intervals, percentage of switches with outages, trouble report rate per thousand access lines, percentage dissatisfied with installation, and percentage dissatisfied with repair".

The report concludes that "our analysis, which incorporated service quality data from the most recent six years, identified the presence of statistically significant long-term upward or downward trends in some of the indicators".

The report finds that there is growth trend for the categories of repair intervals, percent residential installation dissatisfaction, and percent residential repair dissatisfaction.

For the year 2008 the report states that the complaints per millions lines for large carriers was highest by far for Verizon, followed by AT&T, Qwest, and Embarq (formerly Sprint).

Although, two small carriers (Century Tel. and Citizens) had higher complaint rates. Also, for AT&T, the former BellSouth territory accounted for the highest level of complaints. The average for large carriers is 147.7 complaints per million access lines. (See, Chart 1A at page 14.)

In This Issue
This issue contains the following items:
  UK Clears Ticketmaster Live Nation Merger
  FCC Reports on ILEC Quality of Service Trends
  FCC's Clyburn Troubled With Verizon Wireless's Statements Regarding Early Termination Fees
Washington Tech Calendar
New items are highlighted in red.
Monday, December 28

The House will not meet the week of December 28 through January 1. See, Rep. Hoyer's release and release. See also, Section 11 of HRes 976 and HConRes 223.

The Senate will not meet. It will next meet on January 5, 2010, at 12:00 NOON in pro forma session.

Deadline to submit applications to Google for "Google Policy Fellowships" for the summer of 2010 at various public policy groups. See, Google notice, and story titled "Google to Fund Summer Internships at Tech Policy Groups" in TLJ Daily E-Mail Alert No. 2,014, November 12, 2009.

Tuesday, December 29

No events listed.

Wednesday, December 30

No events listed.

Thursday, December 31

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-37 Rev. 1 [88 pages in PDF] titled "Guide for Applying the Risk Management Framework to Federal Information Systems: A Security Life Cycle Approach".

Friday, January 1

New Year's Day. This is a federal holiday. See, Office of Personnel Management's (OPM) web page titled "2010 Federal Holidays".

Saturday, January 2

Deadline to submit comments to the Department of Justice's (DOJ) Antitrust Division regarding the complaint, proposed final judgment, and Competitive Impact Statement in U.S. v. AT&T. See, notice in the Federal Register, November 3, 2009, Vol. 74, No. 211, at Pages 56869-56881. In this proceeding, the DOJ approved the merger of AT&T and Centennial Communications, subject to divestitures in eight local markets. See, story titled "DOJ Approves AT&T Acquisition of Centennial" in TLJ Daily E-Mail Alert No. 2,004, October 16, 2009. The Federal Register notice does not specify the comment deadline. Rather, it states that comments are due "within 60 days of the date of this notice".

Monday, January 4

The House will not meet the week of January 4-8. See, Rep. Hoyer's release and release. See also, Section 11 of HRes 976 and HConRes 223.

Deadline to submit proposals to be designated database administrator in the Federal Communications Commission's (FCC) white space proceeding. See, Public Notice [4 pages in PDF]. It is DA 09-2479 in ET Docket No. 04-186. See also, story titled "FCC Requests Proposals to Be Designated White Spaces Database Administrator" in TLJ Daily E-Mail Alert No. 2,018, November 30, 2009.

FCC's Clyburn Troubled With Verizon Wireless's Statements Regarding Early Termination Fees

12/23. On December 18, 2009, Verizon Wireless (VW) sent a 13 page letter with attachments [77 pages in PDF] to the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB) regarding its charging of early termination fees (ETF) to its wireless customers.

VW asserted that its "contracts with ETFs promote consumer choice and broadband deployment".

VW wrote that "This pricing structure enables Verizon Wireless to offer wireless devices at a substantial discount from their full retail price. By reducing up-front costs to consumers, this pricing lowers the barriers to consumers to obtaining mobile broadband devices. It thus enables many more consumers, including those of more limited means, access to a range of exciting, state-of-the art broadband services and capabilities. The company's pricing structure therefore promotes the national goal of fostering the greater adoption and use of mobile broadband services."

FCC Commissioner Mignon Clyburn stated in a release on December 23, 2009, this VW's statements in this letter are "are unsatisfying and, in some cases, troubling. In particular, I am concerned about what appears to be a shifting and tenuous rationale for ETFs."

Mignon ClyburnClyburn (at right) continued that "No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used to foot the bill for `advertising costs, commissions for sales personnel, and store costs. Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business. So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served."

Moreover, "I am also alarmed by the fact that many consumers have been charged phantom fees for inadvertently pressing a key on their phones thereby launching Verizon Wireless's mobile Internet service. The company asserted in its response to the Bureau that it `does not charge users when the browser is launched, but recent press reports and consumer complaints strongly suggest otherwise."

She concluded that "These issues cannot be ignored" and "I look forward to exploring this issue in greater depth with my colleagues in the New Year."

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