Out of the backyard

In my day, when you wanted to look at the Universe you needed to secure yourself a reasonable telescope, trapse out late at night in the cold and try and search the sky for something interesting with the un-naked eye. There was slim pickings and you would have to be really lucky to actually work out what you were looking at. Well, take a look at this video from TED. Kids today can just sit inside and take an informed tour of the Universe using the best images from telescopes around the world. Of course, it’s not ‘real time’ as you would see with a telescope in the backyard with views of galaxies precisely as they were thousands of years ago.

Happy Rare Birthday

Today is February 29th. Given that it comes only once every four years, that would make it a rare birthday. But it is even rarer. As Andrew Leigh and I discovered in our research, the birthrate on this day is about 10% lower than if it was an ordinary Friday. Why? Parents like to move their children’s birthdays off days like this and on to something more regular. Of course, today they might get some resistance from their doctors who don’t want those births pushed on to the weekend, so it isn’t as rare as ‘normal’ leap days. [Thanks to Andrew for the reminder].

More on iPhone legality

Well, I am not a lawyer so my views on iPhone legality expressed here and here need to be taken with a grain of salt. Dale Clapperton who is one of the authors worried about iPhone legality thinks that getting past the ACCC on this one is not a given. Kim Weatherall, who is a lawyer (although not a competition one), says ACCC past behaviour on this stuff indicates otherwise. That said, if the legislation on third line forcing is rarely a barrier, calls for its reform are even more important. After all, think about all of the uncertainty it created this week. And let’s say that Graeme Samuel — a noted gadgetphile — did actually challenge an iPhone introduction plane as it has occurred around the world and that led to delay or no introduction, I think that this is not going to win that section of the Trade Practices Act any friends (except amongst iPhone ‘grey’ market importers that is).

Tim Harford at MBS

Tim Harford gave a very engaging talk at Melbourne Business School today to a full house. It is great to see so many students interested in economics that they would voluntarily come to a lunchtime lecture. It bodes well for the world. Also, it looks like Tim didn’t run into the kinds of difficulties that he did with his material in Singapore.

I would also like to thank Tim for his generous plug for my upcoming book (and yes, my daughter’s picture has appeared to make the Financial Times website).

iPhone not coming to Australia soon

I was thinking more about the discussion in relation to the Clapperton-Corones piece on the legality of the iPhone. My point had been that the only issue that seemed to be salient was Third Line forcing. Clapperton and Corones thought there would be real issues here but I must admit that I couldn’t see it failing a public benefits test in an authorisation before the ACCC; so it would be OK. Put simply, my prediction is that if the iPhone can’t operate like it does around the world in terms of account activation, Apple would not bother with Australia. The ACCC, realising this, would let it go through.

That said, I take Clapperton and Corones’ point that authorisation would be required. That process is public and a quick look at the ACCC website doesn’t appear to show any application by Apple. This leads me to conclude that the iPhone will not be gracing our shores any time soon.

I shouldn’t have read this paper

Dan Hamermesh and Joel Slemrod claim they have a problem in: “The Economics of Workaholism: We Should Not Have Worked on this Paper.”

A large literature examines the addictive properties of such behaviors as smoking, drinking alcohol, gambling and eating. We argue that for some people addictive behavior may apply to a much more central aspect of economic life: working. Although workaholism raises some of the same health-related concerns as other addictions, compared to most of the more familiar addictions it is more likely to be a problem of higher-income individuals and is more likely to generate negative spillovers onto individuals around the workaholic. Using the Retirement History Survey and the Panel Study of Income Dynamics, we show that high-income, highly educated people exhibit behavior that is consistent with workaholism with regard to retiring–they are more likely to postpone earlier plans for retirement. The theory and evidence suggest that the presence of workaholism calls for a more progressive income tax system than otherwise, although other more targeted policies may be part of optimal policy.

Really, more taxation? Do we really think it is fair that we punish Paris Hilton because some of us are working too hard.

The West Wing II?

I had thought that this US Presidential election campaign was looking very much like the second last season of the West Wing. Apparently, I am not alone in that thought. Interestingly, this report suggests that that might be no accident as the script for this primary was written prior to those West Wing episodes. I guess this is how far audience testing has gone that they run it as a TV show before the real thing. Of course, now we only need a nuclear power plant melt-down around October and it will be eerie indeed.


So it appears that broadcasters have worked out that to compete with DVRs but have ads you need to have on-demand programming but without the ability to skip ads (NYT). The technology is basically a cable box that allows you to watch programs when you want (so you can time shift) but that wont allow you to skip ads. It is basically what they wanted Tivo to be but could never get that as people like to record to skip boring bits of programs as well.

What this will do will cut in to the DVR market for people who time shift shows they ‘must see’ but otherwise casually watch TV. But for those people who really hate ads, this will not be very appealing except that it will bring down DVR prices.

But the question I have is this: if this is such a good idea, why not put ads on iTunes TV programs, disable fast forwarding on those programs, and offer them for free? Sure, there are differences in the technology (e.g., ease of watching on a normal TV) and local advertising is impacted but commercially what is the big deal?

Legality of locked iPhone in Australia?

News reports today that network locking of Apple’s iPhone might be illegal in Australia. That surprised me but the newspaper cited the following:

“The iPhone is breaking new ground in using technology to restrict customer’s choice in technology markets,” said Queensland University of Technology (QUT) law researcher Dale Clapperton.

The finding comes from an analysis of the iPhone under Australia’s competition laws by Dr Clapperton and fellow QUT law expert Professor Stephen Corones, published in the QUT Law and Justice Journal.

So I looked up the article (click here for it). And right in the abstract it said:

The new Apple iPhone contains technological locks which tie the iPhone to the mobile telephony services of a particular third-party mobile carrier, a new development in technological tying, and much more likely to be unlawful in Australia.

“More likely than what?” Apparently, the iPod and tying to the iTunes Music Store. So much for concerns about the iPhone’s legality. The news.com.au site should have said: “little concern about iPhone’s legality.”

What the Clapperton-Corones article argues is that there might be an economic issue with locking (not a legal one):

Where the carrier has not subsidised the cost of the phone, there seems to be no legitimate pro-competitive justification for locking the phone to the services of that carrier, especially where that locking is permanent and not just for the duration of the initial contract.

Well, the jury is out on that piece of economic analysis. All of the current intelligence about the iPhone suggests that carriers are subsidising its cost and paying Apple some revenue share. What the authors are confusing that with are phone subsidies to consumers — although these are recovered through network charges so the subsidy is largely an illusion.

The only serious legal issue might come in relation to Third Line Forcing which says that one company cannot sell a product that makes it a condition of sale that the consumer purchase a product from another company. However, Apple need only sell the iPhone through a carrier’s retailers and it is likely to be fine. In any case, it can obtain permission from the ACCC for any arrangement it might propose.

The article indicates that there might be other anti-competitive issues associated with the iPhone. But someone would have to ask if this arrangement were to lessen competition in any market. There are other smart-phones so Apple isn’t a monopolist there. There is lots of network competition and in the US the iPhone hasn’t given AT&T something that has weakened competition in mobile competition.

Personally, I think locking the iPhone is a poor business decision but it doesn’t look like it is one that will violate competition laws.