Network Neutrality and the False Promise of Zero-Price Regulation

This Article examines zero-price regulation, the major distinguishing feature of many modern "network neutrality" proposals. A zero-price rule prohibits a broadband Internet access provider from charging an application or content provider (collectively, "content provider") to send information to consumers. The Article differentiates two access provider strategies thought to justify a zero-price rule. Exclusion is anticompetitive behavior that harms a content provider to favor its rival. Extraction is a toll imposed upon content providers to raise revenue. Neither strategy raises policy concerns that justify implementation of a broad zero-price rule. First, there is no economic exclusion argument that justifies the zero-price rule as a general matter, given existing legal protections against exclusion. A stronger but narrow argument for regulation exists in certain cases in which the output of social producers, such as Wikipedia, competes with ordinary market-produced content. Second, prohibiting direct extraction is undesirable and counterproductive, in part because it induces costly and unregulated indirect extraction. I conclude, therefore, that recent calls for broad-based zero-price regulation are mistaken.

The Law, Culture, and Economics of Fashion

Fashion is one of the world's most important creative industries. As the most immediate visible marker of self-presentation, fashion creates vocabularies for self-expression that relate individuals to society. Despite being the core of fashion and legally protected in Europe, fashion design lacks protection against copying under U.S. intellectual property law. This Article frames the debate over whether to provide protection to fashion design within a reflection on the cultural dynamics of innovation as a social practice. The desire to be in fashion - most visibly manifested in the practice of dress - captures a significant aspect of social life, characterized by both the pull of continuity with others and the push of innovation toward the new. We explain what is at stake economically and culturally in providing legal protection for original designs, and why a protection against close copies only is the proper way to proceed. We offer a model of fashion consumption and production that emphasizes the complementary roles of individual differentiation and shared participation in trends. Our analysis reveals that the current legal regime, which protects trademarks but not fashion designs from copying, distorts innovation in fashion away from this expressive aspect and toward status and luxury aspects. The dynamics of fashion lend insight into dynamics of innovation more broadly, in areas where consumption is also expressive. We emphasize that the line between close copying and remixing represents an often underappreciated but promising direction for intellectual property today. Published in Stanford Law Review, Vol. 61, March 2009.

Interview with Victor C. Hemphill

In his October 20, 2003 interview with Shamona McClary, Victor Hemphill shares his experiences in the South Pacific during WWII and his life after service. This interview was conducted for inclusion into the Louise Pettus Archives and Special Collections Oral History Program.https://digitalcommons.winthrop.edu/oralhistoryprogram/1272/thumbnail.jp

An Aggregate Approach to Antitrust: Using New Data and Rulemaking to Preserve Drug Competition

This Article examines the aggregation deficit in antitrust: the pervasive lack of information, essential to choosing an optimal antitrust rule, about the frequency and costliness of anticompetitive activity. By synthesizing available information, the present analysis helps close the information gap for an important, unresolved issue in U.S. antitrust policy: patent settlements between brand-name drug makers and their generic rivals. The analysis draws upon a new dataset of 143 such settlements. Due to the factual complexity of individual brand-generic settlements, important trends and arrangements become apparent only when multiple cases are examined collectively. This aggregate approach provides valuable information that can be used to set enforcement priorities, select a substantive liability standard, and identify the proper decisionmaker. The analysis uncovers an evolution in the means – including a variety of complex side deals – by which a brand-name firm can pay a generic firm to delay entry. The Article proposes two solutions for such anticompetitive behavior, one doctrinal and one institutional: a presumption of (illegal) payment where a side deal is reached contemporaneously with delayed entry, and an expanded role for agencies, to gather and synthesize nonpublic information regarding settlements, and potentially to engage in substantive rulemaking. The aggregate approach also reveals the shortcomings of antitrust enforcement where, as here, firms can exploit regulatory complexity to disguise collusive activity

Competition and the Collective Management of Copyright

Discussions of the collective management of copyright tend to celebrate their subject. Much of the work collected in this volume focuses upon the significant economic value created by collective management organizations ("CMOs"), as well as the practical difficulties presented by any realistic effort to unlock that value. I have been assigned a different role to play. My task is to explain one downside of CMOs, namely the risk they pose to competition, and hence the limitations that antitrust law places upon their activities. These limits are familiar to many symposium participants. After all, two of the leading CMOs in the United States, ASCAP and BMI, have operated under an antitrust consent decree for the past sixty years

Paying for Delay: Pharmaceutical Patent Settlement as a Regulatory Design Problem

Over the past decade, drug makers have settled patent litigation by making large payments to potential rivals who, in turn, abandon suits that (if successful) would increase competition. Because such pay-for-delay settlements postpone the possibility of competitive entry, they have attracted the attention of antitrust enforcement authorities, courts, and commentators. Pay-for-delay settlements not only constitute a problem of immense practical importance in antitrust enforcement, but also pose a general dilemma about the proper balance between innovation and consumer access. This Article examines the pay-for-delay dilemma as a problem in regulatory design. A full analysis of the relevant industry-specific regulatory statute, the Hatch-Waxman Act, yields two conclusions. First, certain features of the Act widen, often by subtle means, the potential for anticompetitive harm from pay-for-delay settlements. Second, the Act reflects a congressional judgment favoring litigated challenges, contrary to arguments employed to justify these settlements. These results support the further conclusion that pay-for-delay settlements are properly condemned as unreasonable restraints of trade. This analysis illustrates two mechanisms by which an industry-specific regulatory regime shapes the scope of antitrust liability: by creating (or limiting) opportunities for anticompetitive conduct as a practical economic matter, and by guiding as a legal matter the vigor of antitrust enforcement in addressing that conduct

Algebra Readiness Outcomes of Sixth-Grade Boys and Girls Placed in Challenge Math Based on Measured Math Ability Compared to Sixth-Grade Boys and Girls Placed in Challenge Math Based on Teachers\u27 Recommendations

The first pretest-posttest hypothesis was tested using the dependent t test. Null hypotheses for test score improvement over time were rejected for the end of fifth-grade pretest compared to ending sixth-grade posttest math Essential Learner Outcome scores converted to standard scores for randomly selected sixth-grade girls meeting measured test score criteria for challenge math placement ( n = 15): pretest M = 120.07, SD = 4.32; posttest M = 121.87, SD = 2.17; t (14) = 1.73, p = .05 (one-tailed), d = 0.500 and rejected for randomly selected sixth-grade girls not meeting measured test score criteria for challenge math placement (n = 15):: pretest M = 117.80, SD = 3.28; posttest M = 119.73, SD = 3.13; t (14) = 1.95, p \u3c .05 (one-tailed), d = 0.503. However, null hypotheses for test score improvement over time were not rejected for the end of fifth-grade pretest compared to ending sixth-grade posttest math Essential Learner Outcome scores converted to standard scores for randomly selected sixth-grade boys meeting measured test score criteria for challenge math placement ( n = 15):: pretest M = 120.00, SD = 2.54; posttest M = 121.47, SD = 2.85; t (14) = 1.59, p = .07 (one-tailed), d = 0.415 and not rejected for test score reduction over time for randomly selected sixth-grade boys not meeting measured test score criteria for challenge math placement (n = 15):: pretest M = 119.00, SD = 4.52; posttest M = 118.80, SD = 4.35; t (14) = -0.15, p = .44 (one-tailed), d = -0.038. Comparisons for sixth-grade boys meeting measured test score criteria for challenge math placement, sixth-grade girls meeting measured test score criteria for challenge math placement, sixth-grade boys not meeting measured test score criteria for challenge math placement, and sixth-grade girls not meeting measured test score criteria for challenge math placement was statistically significant, ( F (3, 56) = 3.03, p = .04). Because a significant main effect was found post hoc , contrast analyses were conducted using independent t tests. Significant differences were found in the A (Boys Tested In) vs. C (Boys Placed In) comparison where t (28) = 1.99, p \u3c .05 (one-tailed), d = 1.517; B (Girls Tested In) vs. C (Boys Placed In) comparison where t (28) = 2.45, p = .01 (one-tailed), d = 2.036; and B (Girls Tested In) vs. D (Girls Placed In) where t (28) = 2.17, p \u3c .05 (one-tailed), d = 1.917. No significant differences were observed for the other post hoc comparisons A (Boys Tested In) vs. B (Girls Tested In); A (Boys Tested In) vs. D (Girls Placed In); and C (Boys Placed In) vs. D (Girls Placed In). Importantly, for all groups, a pattern of statistical improvement over time was found for end of fifth-grade pretest compared to ending sixth-grade posttest Orleans-Hanna Algebra Prognosis Test scores, with no significant posttest-posttest ANOVA results observed ( F (3, 56) = 0.47, p = .70) observed. Posttest math test scores for girls, both tested in and placed in, did not decrease significantly while the boys posttest math scores, both tested in and placed In significantly decreased over time. However, final grade test scores for all groups were within the B average range based on school district criteria. Null hypotheses for student math course grades over time were rejected in the direction of lower grade scores for the first trimester sixth-grade pretest challenge math course grade score compared to last trimester sixth-grade posttest challenge math course grade score for sixth-grade boys meeting measured test score criteria for challenge math placement t (14) = -3.22, p = .003 (one-tailed), d = -0.840 and rejected for sixth-grade boys not meeting measured test score criteria for challenge math placement t (14) = -1.80, p = .05 (one-tailed), d = -0.466. Furthermore, null hypotheses for test score improvement over time were not rejected for the first trimester sixth-grade pretest challenge math course grade score compared to last trimester sixth-grade posttest challenge math course grade score for sixth-grade girls meeting measured test score criteria for challenge math placement t (14) = 0.13, p = .45 (one-tailed), d = 0.035 and not rejected for test score reduction over time for sixth-grade girls not meeting measured test score criteria for challenge math placement t (14) = 0.32, p = .38 (one-tailed), d = 0.033. Posttest-posttest results were not statistically significant, (F (3, 56) = 1.18, p = .32). Overall study results indicate an equivalent positive response to challenge math placement regardless of student gender or placement conditions

Parallel Exclusion

Scholars and courts have long debated whether and when parallel pricing – adoption of the same price by every firm in a market – should be considered a violation of antitrust law. But there has been a comparative neglect of the importance of parallel exclusion – conduct, engaged in by multiple firms, that blocks or slows would-be market entrants. Parallel exclusion merits greater attention, for it can be far more harmful than parallel price elevation. Setting a high price leaves the field open for new entrants and may even attract them. In contrast, parallel action that excludes new entrants both facilitates price elevation and can slow innovation. Reduced innovation has greater long-term significance for the economy. Moreover, parallel exclusion regimes may be more stable than parallel price-elevation regimes. A basic game-theoretic analysis reveals that the factors that leave price elevation vulnerable to breakdown do not apply as strongly to parallel exclusion. Indeed, in some instances, maintaining an exclusion scheme is a dominant strategy for each of the excluders. In such cases, the likelihood of collapse is even lower, yielding a potentially indefinite system of parallel exclusion. This Article proposes the recognition of parallel exclusion as a form of monopolization – subject to the strict limits already present in case law, including monopoly power, anticompetitive effect, and an absence of sufficient procompetitive justification. It also explains why parallel exclusion is a proper concern for merger policy, and why it is bad policy to automatically condemn certain boycotts without any evaluation of their anticompetitive effects