December 14th, 2010

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Healthcare case

Only half-way through opinion. I always thought the mandate was the most vulnerable piece, although the general savings clause should preserve everything else. Need to get through the opinion to see if that issue was covered.
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Is Comcast Congesting Itself?

Interesting from Slashdot.

No reason why it shouldn't be true. Comcast wants to get people to pay for access to its customers. Since it can't demand outright, it lets its standard access go to Hell -- at least enough to drive content providers to use paid colocation/CDNs. Entirely predictable, solidly anticompetitive, and an excellent way to extract monopoly rents.

Ah, the market at work. The outcomes may suck from any individual perspective, but they are surprisingly and refreshingly predictable. Like actuary tables. Mind you, the full extent of the externalities can be hard to project. But that's life.
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Link Harvest: Time Wafrner Bad Mouths Netflix, Starz

At some point, I will get around to blogging why these arguments are not merely self-serving, but wrong. Starz deal with Netflix was, as is generally the case in such deals, mutually beneficial. Starz helping Netflix grow a streaming business. That creates an opportunity for Starz! as well. Starz can play Netflix off against the other cable operators in negotiations in ways other programmers can only dream about.

So why is Time Warner so down on Starz? Because Time Warner has a lot of other content for which distribution through NetFlix is less profitable. Starz is premium. They do not get a per subscriber fee the way expanded basic tier programming does. Starz gets paid based on total number of subscribers to Starz. Having established the alternate distribution channel of Netflix, Starz can switch to a per sub model that replicates its existing business model, but via the more popular and more accessible Netflix. Time Warner, by contrast, has lots of basic programming and lots of pay-per-view programming. It gets a lot more money from the existing cable model, where they get paid based on the total number of subscribers to the cable system rather than the total number of subscribers to the service. So if Time Warner tried to replicate what Starz is dong, they end up potentially losing money.
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Finally read health insurance case -- law is not unconstitutional, mandate is.

Interesting. I would say the court's ruling is actually more narrow than had been reported, and is not obviously wrong (although I suspect I might decide the other way based on the scope of existing precedent). It is understandable why other courts would go the other way and find no problem. What is intriguing is the severability decision. Not clear precisely what does, and does not, survive the opinion. However, as the district court observed, the provision held unconstitutional doesn't have much impact until 2013.
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