In God We Antitrust, from the Netly News
---------- Forwarded message ---------- Date: Fri, 9 Jan 1998 11:57:07 -0500 From: Declan McCullagh <declan@well.com> To: politech@vorlon.mit.edu Subject: FC: In God We Antitrust, from the Netly News ************ http://cgi.pathfinder.com/netly/opinion/0,1042,1678,00.html The Netly News (http://netlynews.com/) January 9, 1998 In God We Antitrust by Declan McCullagh (declan@well.com) Bill Gates likes to portray himself as a businessman hounded by hordes of boorish bureaucrats who resent his success. "It's absolutely clear that our competitors are spending an enormous amount of time and money trying to whip up anti-Microsoft sentiment in Washington, D.C.," says spokesman Mark Murray. "For the past year, Netscape, Sun and other competitors have been crawling all over Washington, D.C., trying to use the government as a weapon against Microsoft -- rather than competing head-to-head in the marketplace." Of course, that's what you'd expect a PR flack to say, whether it's true or not. But maybe, just maybe, Microsoft has a point. A close look at the history of antitrust law reveals that its enforcement has always been political. The demand for antitrust regulations in the first place came from midwestern butchers who wanted to block competition from more efficient meat-packing plants in Chicago. Since then, execution of the 1890 Sherman Act has been highly partisan: Democratic administrations are nearly twice as likely to bring antitrust cases as Republicans. Antitrust regulations are also protectionist: Regulators wield them to protect domestic companies from overseas competitors. If it's politics and not policy that prompted the Justice Department to assail Microsoft this time around, the paper trail may not become public until well into the next century. For now, though, we can look at antitrust history instead: ITT and Nixon: President Richard Nixon intervened in an antitrust action against International Telephone & Telegraph in 1971 in exchange for a bribe -- a hefty contribution to the 1972 Republican convention. "I don't know whether ITT is bad, good or indifferent," he said on April 19, 1971, White House tapes reveal. "But there is not going to be any more antitrust actions as long as I am in this chair... goddamn it, we're going to stop it." [...snip...] -------------------------------------------------------------------------- POLITECH -- the moderated mailing list of politics and technology To subscribe: send a message to majordomo@vorlon.mit.edu with this text: subscribe politech More information is at http://www.well.com/~declan/politech/ --------------------------------------------------------------------------
At 9:15 AM -0800 1/9/98, Declan McCullagh wrote:
In God We Antitrust by Declan McCullagh (declan@well.com)
Bill Gates likes to portray himself as a businessman hounded by hordes of boorish bureaucrats who resent his success. "It's absolutely clear that our competitors are spending an enormous amount of time and money trying to whip up anti-Microsoft sentiment in Washington, D.C.," says spokesman Mark Murray. "For the past year, Netscape, Sun and other competitors have been crawling all over Washington, D.C., trying to use the government as a weapon against Microsoft -- rather than competing head-to-head in the marketplace."
Of course, that's what you'd expect a PR flack to say, whether it's true or not. But maybe, just maybe, Microsoft has a point.
Of course they have a point. CNN reported yesterday that "popular sentiment" is shifting *against* Microsoft, that they are losing the war of words with Our Friend, The Government. The sheeple believe what the Government media machine spews. The "ganging up" on MS is the ganging up on anyone who is too successful and who doesn't play the game properly. (Some of us have already commented on how Microsoft's failure to tithe enough to the political machines may have something to do with their problems. Ironically, many companies have been indicte *bribery* charges (e.g., Lockheed, others) for doing what the political machines in Amerika expect to be done...only we call the bribes "voluntary" donations...sort of a political campaign version of "mandatory voluntary.") The next such battle will be about Intel, which, if anything, has even more of a commanding presence in the market than MS has. Besides "investigations" (a DC codeword meaning: "donate money to the ruling party"), the antitrust buzz is that the Intel-DEC deal may be scotched. Intel's failed competitors (Cyrix, AMD, Motorola, Sun, SGI/MIPS, Intergraph) can be counted on to run crying to Mother Government, crying that Intel is too successful. A truly fucked up country. We need to cut the head off the beast. --Tim May The Feds have shown their hand: they want a ban on domestic cryptography ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, ComSec 3DES: 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^2,976,221 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."
At 11:01 AM -0800 1/9/98, Ryan Anderson wrote:
On Fri, 9 Jan 1998, Tim May wrote:
Intel's failed competitors (Cyrix, AMD, Motorola, Sun, SGI/MIPS, Intergraph) can be counted on to run crying to Mother Government, crying that Intel is too successful.
Failed? AMD is farfrom a failed competitor. Intel is nowhere near being a monopoly. In this industry,Intel creates a chip, then AMD,Cyrix, etc take the published specs on that chip and duplicate the work. They same some
Charitably, I'll assume you just don't follow the industry very closely. I don't mean in terms of claims and press announcements, I mean in terms of the "ground truth" of what is real. Intel conservatively is now two full iterations ahead of AMD/Nexgen and/or National/Cyrix. The AMD K6 may not be quite the dog the K5 was, but AMD is woefully unable to *make* the part! (Manufacturing is more essential than most people realize. I could elaborate on this for pages and pages, but this is well-trod ground in, say, the Silicon Investors Forum and other such groups.) There have been reliable reports, from several kinds of sources, that AMD's Fab 25 in Austin is yielding only a handful of workingn (at speed) K6s per 8-inch wafer, versus well over 100 working (at full rated speed, importantly) Pentium IIs (and variamts) devices per 8-inch wafer. Intel is running at a nearly perfect yield rate (most die are functional, a very nice position to be in, and a very hard one to arrange). Intel also has about an order of magnitude more clean room space capable of making the Pentia (and Merced and Gunnison, etc.) than AMD has in Fab 25. ("Fab 25," by AMD's naming convention, means the fab opened in the25th year of business, not their 25th fab.)
effort from having to make opcode decisions, but then they don't get first crack at the market. AMD has a *Very* good chip in the K6, receiving much attention as being a serious competitor to Intel's chips.
Well, look at their profits, Ryan! Go to Yahoo and look at both their earnings reports over the last, say, 5 years. Also look at their stock patterns. AMD is now trading at $18. Five years ago it was trading at the same price. In fact, it's been a narrow range between about 20 and 30 for most of that time, briefly blipping up to 40 before dropping back to the level it was half a decade ago. In fact, it's where it was in 1983, 15 years ago. (Check the charts.) Meanwhile, Intel has moved from $15 to $72 (today's price) in 5 years, and from something like $2 (or less, as the charts don't go back to '83 for Intel), up a factor of 30 or more times. Market caps are similarly skewed. Intel's market value is $120 billion, AMD's is $2.5 billion, a factor of 50 times lower. (They were within a factor of 3 of each other 15 or so years ago.) The problem AMD faces is not the adequacy of its design, "borrowed" from Intel, but its inability to compete in manufacturing costs. Even as AMD struggles to get yields up, and struggles to invest in the next generation of production equipment, Intel is building several new $2 billion fabs, all equipped with the latest equipment. (Intel continued to book orders for production equipment through the last mini-downturn in '95-'96, ordering equipment from Applied Materials, Lam Research, and so on. Guess what? When AMD and other small fry decided it was time to order, pronto, they found that the Applied Materials, etc. production was already committed to go to Intel! Jerry Sanders, top guy at AMD, cried "foul," but the fact was that Intel's enormous financial and market position strength allowed it to plan ahead and order the equipment and manufacturing space they'd need.) I have no doubt that some companies will design in the K6, and even the Cyrix version. I would if I were them, if only to put some pricing pressure on Intel. But the market share of Intel, at something like 90% (I won't dissect the various segments, but they range from 80% to 95%), and the huge costs to compete in the _next_ generation, really makes it almost impossible for small fry like AMD and Cyrix to do anything significant. Even if their yields were significantly higher than Intel's, which is technically impossible, their lack of capacity limits the inroads they can make. And my point is a larger, longer-range one. I haven't said I expect Justice Department action this year, or even next. But if Intel's Merced displaces workstation chips (the DEC deal, Sun to work on a competitive Solaris for Merced, the H-P/Intel alliance, and several other major deals), and if AMD and Cyrix are unable to make a dent in Intel's market share for PC chips, and if the motherboard integration continues (with Intel supplying motherboards that competitors can't readily match the peformance and pricing of), then I expect a Democratic Justice Department to move on Intel. Of course, those who feel AMD and Cyrix are about to knock Intel out of its present position have the best of all ways to vote their beliefs: by buying AMD (or National/Cyrix) stock at the current low prices. I wish you luck, really. --Tim May The Feds have shown their hand: they want a ban on domestic cryptography ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, ComSec 3DES: 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^2,976,221 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."
Tim May <tcmay@got.net> writes:
[snip] The AMD K6 may not be quite the dog the K5 was,
I've got a K5, seems like a fine CPU to me... around the performance of a P166 for about 1/2 the price. Why do you say the K5 is a dog? K6 is similarly value for money. I also bought a AMD 486 120Mhz a while ago for similar value for money reasons. I thought for a while Cyrix or AMD had faster processors available than Intel. (Just prior to to Pentium II, where the Pentium Pro was highly priced and for some applications slower than an Pentium clocked at the same speed). I may not be off to buy AMD stock, but I like competition, and will buy AMD or Cyrix any time they have a cheaper and compatible product. Adam -- Now officially an EAR violation... Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/ print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<> )]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`
Tim May <tcmay@got.net> writes:
AMD is now trading at $18. Five years ago it was trading at the same price. In fact, it's been a narrow range between about 20 and 30 for most of that time, briefly blipping up to 40 before dropping back to the level it was half a decade ago. In fact, it's where it was in 1983, 15 years ago. (Check the charts.)
Meanwhile, Intel has moved from $15 to $72 (today's price) in 5 years, and from something like $2 (or less, as the charts don't go back to '83 for Intel), up a factor of 30 or more times.
This is not the way to compare 2 stocks. Let me illustrate this with a numericl example. Stock A has been trading at about $10 for the last 10 years. Every year it paid $5 in dividends. (OK, so why is it to fucking cheap) Stock B has appreciated from $10 to $20 over the last 10 years. Which has better total returns? --- Dr.Dimitri Vulis KOTM Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps
Tim May <tcmay@got.net> writes:
The AMD K6 may not be quite the dog the K5 was,
I've got a K5, seems like a fine CPU to me... around the performance of a P166 for about 1/2 the price.
From a purist point of view the Intel Pentium processors are good performance pieces. The main problem with the Cyrix/IBM is very poor math coprocessor performance. The average user may never notice the difference but the tests and real life use of Quake show that the Cyrix/IBM is not of the same standard as the Pentium.
I have a Intel 166MMX labelled processor running just fine at 225 Mhz (75 Mhz X 3). You can't do the same thing with Cyrix/IBM processors, maybe you can over-clock them one step. I am a keen fan of competition in the marketplace and I have two Cyrix/IBM processors in the systems in my home. I have not tried the AMD Pentium class processors but I intend to buy one in the near future just to play around with it. In the past AMD was the king of over-clocking and did things with the 486 chip that Intel could not, or chose not to. I hope AMD again gains that distinction with their Pentium class processors. Maybe Tim May has the real inside scoop on the AMD K6 processors. Certain segments of the market are commiting resources to the AMD K6 and you should see as many in the market as AMD can produce. Tim May's comments on yield problems at AMD could be very true as resellers are having a problem acquiring AMD K6s processors.
Why do you say the K5 is a dog?
K6 is similarly value for money.
I also bought a AMD 486 120Mhz a while ago for similar value for money reasons.
I thought for a while Cyrix or AMD had faster processors available than Intel. (Just prior to to Pentium II, where the Pentium Pro was highly priced and for some applications slower than an Pentium clocked at the same speed).
I may not be off to buy AMD stock, but I like competition, and will buy AMD or Cyrix any time they have a cheaper and compatible product.
Adam -- Now officially an EAR violation... Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/
print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<> )]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`
Virtually Raymond D. Mereniuk Raymond@fbn.bc.ca
On Fri, 9 Jan 1998, Tim May wrote:
The next such battle will be about Intel, which, if anything, has even more of a commanding presence in the market than MS has. Besides "investigations" (a DC codeword meaning: "donate money to the ruling party"), the antitrust buzz is that the Intel-DEC deal may be scotched.
Intel's failed competitors (Cyrix, AMD, Motorola, Sun, SGI/MIPS, Intergraph) can be counted on to run crying to Mother Government, crying that Intel is too successful.
Failed? AMD is farfrom a failed competitor. Intel is nowhere near being a monopoly. In this industry,Intel creates a chip, then AMD,Cyrix, etc take the published specs on that chip and duplicate the work. They same some effort from having to make opcode decisions, but then they don't get first crack at the market. AMD has a *Very* good chip in the K6, receiving much attention as being a serious competitor to Intel's chips. Intel is in no way nearly as hated as Microsoft. Many people hate MS products irrationally, some of those also hate the 80x86line of chips. The number hating the chips is muhc lower than the number hating MS. Maybe because Intel tends to have more reliable produts? Who knows. Intel is *not* in any danger of being a target for an antitrust suit in the near futur, in truth they don't even have the signs going for them. (No dumping of products, no tying of products, though Slot-1 might cqualify as this, I doubt it.) Even the industry mags point out this difference between the two. It's a lot easier to develop competing hardware than a competing OS. Ryan Anderson - Alpha Geek PGP fp: 7E 8E C6 54 96 AC D9 57 E4 F8 AE 9C 10 7E 78 C9 print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<> )]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`
participants (6)
-
Adam Back -
Declan McCullagh -
dlv＠bwalk.dm.com -
Raymond D. Mereniuk -
Ryan Anderson -
Tim May