Quotulatiousness

May 30, 2011

Licensing Salem’s witches

Filed under: Bureaucracy, Economics — Tags: , , — Nicholas @ 09:20

Katie Zezima reports on the surge of witches looking to be licensed in Salem, Massachusetts, after the city council made it easier to get a license:

“It’s like little ants running all over the place, trying to get a buck,” grumbled Ms. Szafranski, 75, who quit her job as an accountant in 1991 to open Angelica of the Angels, a store that sells angel figurines and crystals and provides psychic readings. She says she has lost business since the licensing change.

“Many of them are not trained,” she said of her rivals. “They don’t understand that when you do a reading you hold a person’s life in your hands.”

[. . .]

But not everyone is sure that quantity can ensure quality. Lorelei Stathopoulos, formerly an exotic dancer known as Toppsey Curvey, has been doing psychic readings at her store, Crow Haven Corner, for 15 years. She thinks psychics should have years of experience to practice here.

“I want Salem to keep its wonderful quaint reputation,” said Ms. Stathopoulos, who was wearing a black tank top that read “Sexy witch.” “And with that you have to have wonderful people working.”

Under the 2007 regulations, psychics must have lived in the city for at least a year to obtain an individual license, and businesses must be open for at least a year to hire five psychics. License applicants are also subject to criminal background checks.

May 3, 2011

Michael Geist on what the Conservative majority means for digital policies

Filed under: Cancon, Economics, Government, Liberty, Technology — Tags: , , , , , , — Nicholas @ 12:29

In short, he sees it as a mixed bag:

For example, a majority may pave the way for opening up the Canadian telecom market, which would be a welcome change. The Conservatives have focused consistently on improving Canadian competition and opening the market is the right place to start to address both Internet access (including UBB) and wireless services. The Conservatives have a chance to jump on some other issues such as following through on the digital economy strategy and ending the Election Act rules that resulted in the Twitter ban last night. They are also solidly against a number of really bad proposals — an iPod tax, new regulation of Internet video providers such as Netflix — and their majority government should put an end to those issues for the foreseeable future.

On copyright and privacy, it is more of a mixed bag.

The copyright bill is — as I described at its introduction last June — flawed but fixable. I realize that it may be reintroduced unchanged (the Wikileaks cables are not encouraging), but with the strength of a majority, there is also the strength to modify some of the provisions including the digital lock rules. Clement spoke regularly about the willingness to consider amendments and the Conservative MPs on the Bill C-32 committee were very strong. If the U.S. has exceptions for unlocking DVDs and a full fair use provision, surely Canada can too.

The Conservatives are a good news, bad news story on privacy. A fairly good privacy bill died on the order paper that will hopefully be reintroduced as it included mandatory security breach notification requirements. There will be a PIPEDA review this year and the prospect of tougher penalties for privacy violations is certainly possible. Much more troubling is the lawful access package which raises major civil liberties concerns and could be placed on the fast track.

April 18, 2011

Toronto area gas station boycott

Filed under: Cancon, Economics — Tags: , , — Nicholas @ 10:01

Chris Greaves (who doesn’t even own a car) looks at the possibility of using weekly boycott targets in an attempt to force oil companies to lower the retail price of gasoline in Toronto:

Consider therefore a web site for the GTA which announced as the next boycott period approached that the new target was “Shell”.

Those drivers who subscribe to the mass-boycott idea would avoid buying gas at Shell and, being evangelical, would tell their friends and colleagues that “Shell” was the target this period.

The question is “Who picks the target?” and the answer is simple: torontogasprices already announces the highest and lowest price for gas in the GTA. Score +1 against that company with the highest gas price at a random time each day. Then pick the company with the highest score. Over a short period, the company with the highest prices would float to the top of the list and be ready for a boycott.

In order to avoid any hint of collusion and legal attack, the web site would be hosted as a private web site, a blog perhaps, with the views expressed being solely those of the individual. There can be no legal complaint against an individual blogging and/or tweeting a disarmingly simple statement “This week I am boycotting Shell”.

February 24, 2011

Ontario’s wine industry: stupid from 2007?

Filed under: Cancon, Wine — Tags: , , , — Nicholas @ 12:15

Michael Pinkus has more than a couple of bones to pick with Ontario wineries:

This is what I wrote while sitting at my table just minutes after my Cuvee pre-tasting:
“Here I sit tasting the wines from the fruit of the labour of Ontario winemakers for the 2011 Cuvee media pre-tasting … It is here we taste what the competition organizers and judges have deemed the best. Actually let’s get more specific, before us is one wine from each winery that entered the competition and we are told “These wines represent each participating winery’s top scoring wine from the Cuvee judging held in January”. In other words these are the top scoring wines from each individual winery’s submission … 62 wines in total. [. . . A few] were fantastic, well made wines worthy of their price (especially the Pelham which was an absolute steal at $24.95). But then there were others, whom I will not mention here by name but instead by price: a $45 Reserve Cabernet Franc, a $45 Cab-Merlot, a $55 Red Blend, a $40 Reserve Franc and a $35 Red Blend, that should all be ashamed of themselves for unleashing sub-par quality at astronomical prices. I’m talking about sub-par wines at above par prices for what the consumer is getting. This is not just about hurting the individual winery’s reputation but also, as one colleague pointed out to me, Ontario’s reputation as a whole. It’s time to stop trying to get all your money back at one shot — this is a long term investment people, and a tough one at that.

[. . .]

I was prepared to post that on the blog and just walk away (in effect, putting my own head in the sand) letting the chips fall where they may, but then it started to eat at me more and more. I want to keep writing about his industry, but what can I say? The final straw happened two days later at the bi-weekly media LCBO Vintages tasting and I have to admit to you I was appalled by a few of the Ontario wines being offered. I hopped on the train back home and found myself thinking about both tastings and penned the following:

I have been gentle on some of you over the years but seriously if these wines represent the best Ontario has to offer, give me a break. If the wines I tried at the Cuvee preview are some of the best wines wineries have to offer, then some wineries are in BIG trouble: (what was with that nasty-ass Merlot Icewine?). Don’t care what they submit: (a flat, flabby, bland Sauvignon Blanc, is that really what your winery does best?). Have given up: (a Gewurzt that has no Gewurzt characteristic to it what-so-ever). Are not paying attention: (a fume blanc so heavy handed on the fume that there was no fruit at all). And are just wasting grapes: (a poor excuse for an ’07 made with Franc and Sauv, an ’07!!!).

Two days later, at the LCBO Vintages tasting (for the March 19, 2011 release) I had to pull out my best conspiracy-theory to explain some of the Ontario wines we sampled. I know full well that the LCBO isn’t trying to be helpful to the Ontario wine industry, but never did I think they would stoop to this level: the tasting included a lackluster Sauvignon Blanc and a horrible Red Blend (you know who you are) … I suggest to you that the LCBO takes some of these atrocious wines to make Ontario look bad … advertise a red, from a good vintage like 2005, for under $15, and people will buy it, sip on it and just as quickly spit it out, vowing never to buy Ontario wines again. Thanks for nothing LCBO.

I’m not saying they do that with every Ontario wine (case in point: Cave Spring Cellars 2009 Estate Gewurztraminer), but I think they throw in a ringer every-so-often just to screw with their major competition, the wineries. Am I just paranoid? Well find out for yourself, buy each and every Ontario wine that comes thru Vintages and you tell me they are in the caliber claimed by the Board’s Vintages website: “the fine wine and premium spirits business unit of the LCBO. Our experts shop the world for fine wine and premium spirits of exceptional value.” Now, not every wine is to everybody’s taste you’ll say — true — but some of those wines the board tries to pawn off as “fine” are only fine for salad purposes and that’s all. I don’t buy this argument. As they say on ESPN NFL Football broadcasts, “C’mon Man”, this just ain’t happening.

Sturgeon’s Law claims that “Ninety percent of everything is crap”, and that applies to wine just as much as it does to novels. A big difference for wine is that even the crap is far better than it was just ten years ago. Nowadays, a crap wine is merely boring, not undrinkable as they once were. But that being said, Michael’s comments are worth paying heed — Ontario’s wine industry has problems galore from nature (cool climate wine production but a customer base accustomed to imported hot climate wines), legal obstacles (Ontario still treats wineries as if they produce radioactive waste, not wine), and the normal exigencies of competition: there’s no need to compound these problems with avoidable ones like poor quality control or (as Michael suggests) contempt for their customers.

February 19, 2011

“If you’re not embarrassed when you ship your first version you waited too long”

Filed under: Technology — Tags: , , , — Nicholas @ 00:03

An interesting look at the epic battle between the perfectionist urge and the first-mover advantage:

There is a dark time in WordPress development history, a lost year. Version 2.0 was released on December 31st, 2005, and version 2.1 came out on January 22nd, 2007. Now just from the dates, you might imagine that perhaps we had some sort of rift in the open source community, that all the volunteers left or that perhaps WordPress just slowed down. In fact it was just the opposite, 2006 was a breakthrough year for WP in many ways: WP was downloaded 1.5 million times that year, and we were starting to get some high-profile blogs switching over. The growing prominence had attracted scores of new developers to the project and we were committing new functionality and fixes faster than we ever had before.

What killed us was “one more thing.” We could have easily done three major releases that year if we had drawn a line in the sand, said “finished,” and shipped the darn thing. The problem is that the longer it’s been since your last release the more pressure and anticipation there is, so you’re more likely to try to slip in just one more thing or a fix that will make a feature really shine. For some projects, this literally goes on forever.

[. . .]

Usage is like oxygen for ideas. You can never fully anticipate how an audience is going to react to something you’ve created until it’s out there. That means every moment you’re working on something without it being in the public it’s actually dying, deprived of the oxygen of the real world. It’s even worse because development doesn’t happen in a vacuum — if you have a halfway decent idea, you can be sure that there are two or three teams somewhere in the world that independently came up with it and are working on the same thing, or something you haven’t even imagined that disrupts the market you’re working in. (Think of all the podcasting companies — including Ev Williams’ Odeo — before iTunes built podcasting functionality in.)

By shipping early and often you have the unique competitive advantage of hearing from real people what they think of your work, which in best case helps you anticipate market direction, and in worst case gives you a few people rooting for you that you can email when your team pivots to a new idea. Nothing can recreate the crucible of real usage.

February 9, 2011

Nokia: the company on the burning platform

Filed under: Technology — Tags: , , , , , , — Nicholas @ 07:57

Nokia has a problem. The ordinary cellphone market which mere years ago they bestrode like a Colossus has been overshadowed by the smartphone market, and they’re just an ordinary company in that market.

In the memo, Mr. Elop shares his vision of the current state of the mobile landscape, where Apple controls the high-end of the wireless market with its iPhone, where Google’s Android not only is making its mark in the smartphone arena but now conquering the mid-range market with Android and how Nokia is even losing the fight to control the low end of the cellphone market — an arena in which the company has traditionally dominated — as it struggles to compete with China’s MediaTek for market share and mind share in emerging markets.

“The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience,” he writes.

“Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable … And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.”

Update: Eric S. Raymond thinks the memo shows that Nokia’s new CEO has the courage to grasp the nettle:

If this memo does nothing else, it proves that Elop is not afraid to look facts in the eye and propose drastic remedies for a near-terminal situation. I cannot recall ever hearing in my lifetime a CEO’s assessment of his own corporation that is so shockingly blunt about the trouble it is in. The degree of candor here is really quite admirable, and does more than any other evidence I’ve seen to suggest Elop has the leadership ability to navigate Nokia out of its slump.

It’s clear from the memo that Elop is preparing his company to change their flagship smartphone OS. You can’t get more obvious than ‘We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.’

The available alternatives are Android or WP7. Apple’s iOS is right out because Nokia needs to be able to sell cheap on a huge range of handsets. RIM and WebOS are tied to one company each. MeeGo’s been tried and failed. There are no other realistic contenders.

I think we’re being given some subtle clues that it will be Android.

Update, 12 February: Andrew Orlowski has some post-tragedy analysis of Nokia’s collapse into the arms of WP7:

There are times when you don’t want to intrude on public grief, but Nokia has spent 15 years (or more) trying to avoid this day.

New CEO Stephen Elop would argue otherwise, but giving up control of your platforms means giving up control over your destiny – and Elop has given Nokians not one twig of consolation around which a bit of dignity could be wrapped.

He’s also signalled the end of Nokia as a high R&D spend technology company. “We expect to substantially reduce R&D expenditures”, said Elop bluntly in this morning’s webcast. The new Nokia will be a global brand and a contract manufacturer whose primary customer is itself.

“Disaster” and “stitch-up” are two of the texts I received this morning from Nokians. Finnish press reports 1,000 staff in Tampere walking out. A surprise? Not really. For 15 years Nokia has defined itself, to its partners and customers, as the Not-Microsoft. Now it’s utterly dependent on them. There’s no Plan B.

[. . .]

How does Nokia recreate the product-centric, almost skunkworks development culture of the 1990s, while retaining its global logistical strengths, such as its ability to customise for local markets? How does Nokia prevent Microsoft from stealing its ideas? How does it create services that don’t brass off its biggest customers, the operators? Some of these are very old questions, and the Microsoft tie up does nothing to resolve them — it might even complicate them.

The impact on morale is probably the most immediate thing Elop has to address — it’s a huge blow to Finnish national pride. Elop’s brutal assessment in his “Burning Platforms” intranet post is that Nokia was hopeless at strategy, rubbish at marketing, and couldn’t write software. He all but told Nokians that they should have stayed in the rubber boot business.

What a motivator!

LSE to buy TSX

Filed under: Britain, Cancon, Economics — Tags: , , — Nicholas @ 07:36

It’s a crafty move, but it’s not clear whether it’s the buyer or the seller being the craftier:

London Stock Exchange Group Plc, the 210-year-old bourse operator, agreed to buy Toronto Stock Exchange owner TMX Group Inc. for about C$3.2 billion ($3.2 billion) in stock as the companies cut costs to counter lost market share. LSE surged to a two-year high.

LSE shareholders will own 55 percent of the company, while TMX investors will hold the rest, the exchanges said today in a statement. TMX shareholders will receive 2.9963 LSE shares for each they own, valuing the Toronto-based company at about C$42.68 a share, 6 percent more than yesterday’s closing price.

Xavier Rolet, LSE’s chief executive officer, will reduce 35 million pounds ($56 million) a year in costs and expand into new businesses such as derivatives as competition from alternative trading platforms increases as do mergers among rivals. His predecessor Clara Furse fought off five takeover offers in two years and bought the operator of the Milan stock exchange. The LSE’s share of U.K. equity trading was 63.8 percent last quarter, compared with 75 percent in 2009, data from the London- based company show.

It could be a way for London to diminish the impact of European rules on their business (by having a non-EU place to land if necessary) or it could be a way for the EU to extend their rule-making to the Canadian market. Or, and this is the least believable scenario, it might just be an ordinary acquisition by a company that happens to run stock markets.

Update: What is presented as a take over in other markets is being positioned (spun?) as a “merger” for domestic consumption:

TMX Group, which operates the Toronto Stock Exchange, and the London Stock Exchange announced Wednesday they are merging to create one of the world’s largest stock exchanges.

The merger, which is subject to regulatory approvals, is unanimously being recommended by the boards of both exchanges.

The merger, if approved, would give the new firm a value of just over $6 billion (Cdn.) and give LSE shareholders just over 50 per cent of the combined company.

TMX Group is valued at $2.99 billion, while the London Stock Exchange Group’s value is slightly higher, around $3.25 billion.

The new company will have the world’s largest number of listing, more than 6,700 companies with an aggregate value of $5.8 trillion, the partners said in a statement early Wednesday.

[. . .]

The company will be co-headquartered in Toronto and London with Xavier Rolet, the CEO of the London Exchange, retaining that position with the new company. The president will be Thomas Kloet, the CEO of TMX. The FO will be Michael Ptasznik, who currently holds the same post with TMX, and the company director will be Raffaele Jerusalmi, the Milan-based CEO of Borsa Italiana.

Expect this deal, even if it eventually gets regulatory approval, to drag on for most of this year.

February 7, 2011

Licensing as a tool for restricting competition

Filed under: Bureaucracy, Economics, Government, Law — Tags: , , , — Nicholas @ 12:21

Stephanie Simon addresses the pro and con positions on licensing for various jobs:

[E]conomists — and workers shut out of fields by educational requirements or difficult exams — say licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services.

“Occupations prefer to be licensed because they can restrict competition and obtain higher wages,” said Morris Kleiner, a labor professor at the University of Minnesota. “If you go to any statehouse, you’ll see a line of occupations out the door wanting to be licensed.”

[. . .]

At a time of widespread anxiety about the growth of government, the licensing push is meeting pockets of resistance, including a move by some legislators to require a more rigorous cost-benefit analysis before any new licensing laws are approved. Critics say such regulation spawns huge bureaucracies including rosters of inspectors. They also say licensing requirements — which often include pricey educations — can prohibit low-income workers from breaking in to entry-level trades.

Texas, for instance, requires hair-salon “shampoo specialists” to take 150 hours of classes, 100 of them on the “theory and practice” of shampooing, before they can sit for a licensing exam. That consists of a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner. Glass installers, or glaziers, in Connecticut — the only state that requires such workers to be licensed — take two exams, at $52 apiece, pay $300 in initial fees and $150 annually thereafter.

California requires barbers to study full-time for nearly a year, a curriculum that costs $12,000 at Arthur Borner’s Barber College in Los Angeles. Mr. Borner says his graduates earn more than enough to recoup their tuition, though he questions the need for such a lengthy program. “Barbering is not rocket science,” he said. “I don’t think it takes 1,500 hours to learn. But that’s what the state says.”

In harder economic climates, expect to see a push towards trying to get some form of certification or licensing imposed in new fields. For example, I’ve seen several attempts to introduce mandatory certification for technical writers, usually with the intent of limiting access to the (reduced) pool of writing jobs in the field. Usually the biggest fans of certification are those who think they’re in a good position to dictate the requirements for certification (and often run courses/seminars which, I assume, would automatically appear in the final list of requirements).

July 31, 2010

USDOT holding back Toyota report because it’s too favourable to Toyota?

Filed under: Bureaucracy, Media, Politics, Technology — Tags: , , , — Nicholas @ 12:02

Toyota has been claiming for quite some time that they have found no fault in their cars that could cause unintended acceleration. The US government’s report is reported to support that claim, but officials have been delaying the release of that information:

Senior officials at the U.S. Department of Transportation have at least temporarily blocked the release of findings by auto-safety regulators that could favor Toyota Motor Corp. in some crashes related to unintended acceleration, according to a recently retired agency official.

George Person, who retired July 3 after 27 years at the National Highway Traffic Safety Administration, said in an interview that the decision to not go public with the data for now was made over the objections of some officials at NHTSA.

“The information was compiled. The report was finished and submitted,” Mr. Person said. “When I asked why it hadn’t been published, I was told that the secretary’s office didn’t want to release it,” he added, referring to Transportation Secretary Ray LaHood.

A Transportation Department spokeswoman, Olivia Alair, said NHTSA is still reviewing data from the Toyota vehicles the agency is examining. “Its review is not yet complete. The investigation remains ongoing,” she said.

It could be suspected that the reason the government doesn’t want to release the report is that it pretty much exonerates Toyota after their trial-by-media over the sudden acceleration issue. The US government’s holdings in GM and Chrysler make them effectively competitors with Toyota, and the media has done a fine job of trying to depress Toyota sales (to indirectly benefit GM and Chrysler).

But that would be an unfair thing to suspect, wouldn’t it?

June 1, 2010

This is a solution in search of a problem

Filed under: Cancon, Soccer — Tags: , , , , — Nicholas @ 12:09

The wise heads at the Gloucester Dragons Recreational Soccer league have decided to stamp out all the evils of competitive soccer once and for all:

In yet another nod to the protection of fledgling self-esteem, an Ottawa children’s soccer league has introduced a rule that says any team that wins a game by more than five points will lose by default.

The Gloucester Dragons Recreational Soccer league’s newly implemented edict is intended to dissuade a runaway game in favour of sportsmanship. The rule replaces its five-point mercy regulation, whereby any points scored beyond a five-point differential would not be registered.

Kevin Cappon said he first heard about the rule on May 20 — right after he had scored his team’s last allowable goal. His team then tossed the ball around for fear of losing the game.

I coached children’s soccer for more than a decade, and my teams sometimes lost by more than five goals (and occasionally won by similar margins). That’s inevitable, given that recreational soccer teams are not balanced for skill or experience, just for age level. Sometimes random selection puts together three or four very good players (who are not, for whatever reason, playing competitive soccer). Sometimes, otherwise good teams have bad games.

As a parent and as a coach, you know within the first few minutes of a game whether the kids are “in to the game” or if they’re just counting the minutes ’til the final whistle. There’s one thing worse than being beaten by an opposing team by lots of goals . . . and that’s the other team obviously, ostentatiously, not scoring the goals.

I’ve only had it happen against my team once, about six years ago. We were the last-place team in the division and we were facing one of the top teams. It was late in the season, and my kids didn’t have much hope to win, but were still trying. The other team had a higher proportion of bigger players, in addition to having a few really good players. We were down six goals by halftime, and although we were still playing hard, they were out-playing us.

If the second half had gone the same way, it would have been just a bad loss. But the other coach decided to “take it easy” on my team, and loudly and repeatedly directed his players not to score. My players were humiliated for another 30 minutes of “play”. I was surprised we didn’t have fights breaking out on the field: it was that bad.

Next week, I barely had enough players show up for the game. Ironically, even with the few we had, we won that game handily.

Update, June 11: The league has decided to modify the rule:

In response to the feedback, the league decided to get rid of the rule, which will be rescinded starting June 14.

In its place, a new mercy rule will be instituted under which a game will be called once one team has a lead of eight goals. Whichever team is ahead at that time will be credited with the win, Cale said. Teams can then play on if they wish for player development, wrote Cale.

May 26, 2010

Evolutionarily speaking, everything old is new again

Filed under: Science — Tags: , , , , , — Nicholas @ 12:46

An idea that seemed fairly common in the 1960s and 70s appears to be regaining credibility:

When two drunken men fight over a woman, alcohol and stupidity may not be the only things at work. Sadly, evolution may have shaped men to behave this way. Almost all of the traits considered to be masculine — big muscles, facial hair, square jaws, deep voices and a propensity to violence — evolved, it now seems, specifically for their usefulness in fighting off or intimidating other men, allowing the winner to get the girl.

That, at least, is the contention of David Puts, an anthropologist at Pennsylvania State University, in an upcoming paper in Evolution and Human Behavior. Dr Puts is looking at how sexual selection gave rise to certain human traits. A trait is sexually selected if it evolved specifically to enhance mating success. They come in two main forms: weapons, such as an elk’s horns are used to fight off competitors; and ornaments, like a peacock’s tail, which are used to advertise genetic fitness to attract the opposite sex.

Researchers have tended to consider human sexual selection through the lens of the female’s choice of her mate. But human males look a lot more like animals designed to battle with one another for access to females, says Dr Puts. On average, men have 40% more fat-free mass than women, which is similar to the difference in gorillas, a species in which males unquestionably compete with other males for exclusive sexual access to females. In species whose males do not fight for access to females, males are generally the same size as, or smaller than, females.

February 19, 2010

Another tale of Canadian retail online follies

Filed under: Gaming, Humour — Tags: , , , — Nicholas @ 08:45

The most recent season of The Guild got released on DVD this week. I’m certainly going to be ordering a copy, but there appears to be a hitch: it’s not (yet) being carried by my usual online suppliers. Amazon.ca doesn’t have it listed yet, and Chapters/Indigo says it won’t be available until May 25th.

Amazon.com says it’s shipping right now.

And this will be another case of “nobody wants it” in Canada when it finally does become available through Canadian channels because anyone who wanted it already ordered it from US sources.

February 3, 2010

Paul Volcker praises Canadian banking system

Filed under: Cancon, Economics, USA — Tags: , , , — Nicholas @ 08:50

Expect this to continue to be the story of the week in Canadian newspapers:

Paul Volcker, the former U.S. Federal Reserve Board chairman who’s now a key economic advisor to the White House, told U.S. lawmakers Tuesday they ought to learn from Canada’s banking system as they seek to overhaul rules governing the biggest U.S. banks.

Speaking at a hearing to tout his proposal to rein in risky investing activities by large U.S. commercial banks, Mr. Volcker said the life’s work of Canadian banks is retail banking: “That’s no longer true of great big American banks.”

With just five or six banks dominating the industry, Canada’s banks benefit from having less competition, Mr. Volcker said. “It’s a stable oligopoly.”

There’s a mixed blessing in that: fewer banks means less competition, so there’s less need for banks to compete for customers in meaningful ways. Look at the feeding frenzy once banks were allowed to buy trust companies . . . partly because trust companies were more actively competing for business. Having a “stable oligopoly” has benefits, but consumers have fewer choices on where to bank, and banks have far less pressure to lower fees or increase services.

Here’s what Americans may find the most unexpected part of the story:

Canada’s banking system also has been shielded by the fact that it has less government interference in its mortgage market, unlike in the United States, where banks have been pressured by the government to make low-cost loans to the economically disadvantaged, he said.

Mr. Volcker’s endorsement of Canada’s banking system — the only Group of Seven nation that didn’t need taxpayers to bail out its banks — came two days after The New York Times published a piece by Nobel Prize-winning economist and columnist Paul Krugman that said the United States should emulate Canada’s financial regulatory regime.

Unfortunately, the wrong lesson is likely to be drawn from this: much of the reason Canada’s banks didn’t need to be bailed out was the much lower political interference in their lending policies. Instead, US politicians are likely to insist on even more political interference to achieve the “right” result.

July 14, 2009

The iPhone: wrecker of the cell phone industry?

Filed under: Technology — Tags: , , , , — Nicholas @ 12:26

Rather a bold claim, but Aidan Malley makes some good points:

Analyst Craig Moffett of Bernstein Research likens the relationship between Apple and AT&T as that between the former and music labels dating as far back as 2001, when Apple first had to ingratiate itself with labels as it incorporated music CD ripping into iTunes. Apple at first won important concessions and praise from its partners, only for them to regret it later as the iPod maker’s popularity left these companies at the supposedly smaller company’s mercy.

[. . .]

The attack is such that Apple has all but taken control of the partnership, according to the analyst. Now, the Cupertino company has “radically tilted” the normal balance of power against AT&T and cellular networks as a whole. If Apple preferred another carrier, many iPhone owners would switch to preserve the experience they already have; an incentive that forces carriers to keep the handset maker happy. At times, though, it also has the caustic effect of suggesting an conspiracy at the carrier to limit useful services, such as voice over IP calls, when cost or technical reasons are the real motivators.

And while the US government may be close to investigating exclusivity deals as possibly anti-competitive, Moffett argues that Apple’s presence in the marketplace has actually helped competition by forcing companies to keep reasonable service rates and let apps dictate business rather than network services. Government intervention could paradoxically hurt the industry by telling providers how much they could discount a phone and hardware developers which networks they would have to support.

I’d have to say he’s absolutely correct with the point on user loyalty . . . if Rogers stopped supporting the iPhone, I’d be moving my business to whoever took it over from Rogers. I’m certain that this is true of the vast majority of iPhone users. I was Bell customer for a long time, but the iPhone was enough inducement for me to switch cell phone companies.

That’s a pretty big club for Apple to use to get its own way in any negotiations with cell phone companies.

(Cross-posted to the old blog, http://bolditalic.com/quotulatiousness_archive/005580.html.)

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