PublishedNovember 4, 1997


(Washington, DC) — Citing the importance of maintaining healthy competition within the computer and communications industry to inspire innovation and provide consumers with choices, Ed Black, President of the Computer & Communications Industry Association (CCIA), today urged lawmakers and regulators to continue monitoring competition and remain ever vigilant in the prosecution of anticompetitive behaviors.
In testimony before the Senate Judiciary Committee, Black said the technical battles and policy decisions that are made over the next few years have the potential not only to define the structure of the information age, but to reshape the structure of our society. “We have a national interest in making sure that this future is based on the most vigorous and fair competition possible,” he stated.
Black referenced “bundling” to illustrate how certain practices can deter competition:

“In the 70s, under pressure from the antitrust enforcers and the courts, the industry leaders unbundled their products, so that consumers would be free to buy competitive components of hardware and software in assembling their computer systems. This led to the development by independent innovators of compatible products that could interconnect and function along with the base of already-installed systems. The result of this unbundling was the most rapid and dynamic period of growth in the history of any industry with a competitive marketplace. New products and applications flowered, and the Silicon Valley was born.”In the 80s and early 90s far fewer innovators would have had the courage to start new ventures to develop computer products that offered better prices and performance if industry’s giants could foreclose their customers from buying those products through blatant new tying or bundling conditions. Yet, that is precisely the world which is once more on the horizon,” Black said.

Black also used several examples of Microsoft’s market dominance to illustrate his points:

“The ability of a single company to control the PC operating and applications markets (essentially the entire PC market), has very important implications for the future of the computer industry as a whole. It is this market, with its millions of users, that gives a firm the necessary economies of scale to dominate related markets. Indeed, Microsoft already has set its sights on bigger challenges and new markets. The company also is hard at work developing technology to dominate the multimedia and entertainment industries. And of great concern is its attempt to gain control over the Internet and the World Wide Web — the fastest growing and most exciting new markets.”By bundling the next generation operating system with access to the Internet, and by placing its proprietary software in the set-top boxes or the new navigators of cyberspace, these firms could well effectively dominate the information age the way they have the PC markets,” Black said.

Black noted CCIA’s rich history of promoting a competitive marketplace. Now, in its 25th year, CCIA seeks level playing-fields which freely allow existing players and new entrants fair opportunities for participation. This has meant a commitment to open standards, open and interoperable systems, open markets at home and abroad, including the government marketplace, and of course open competition. CCIA’s member companies employ over a half million workers and generate annual revenues beyond 200 billion dollars.
For copies of Ed Black’s testimony, contact: Mark Lewis @ 202/783-0070.

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