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...]



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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."

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`

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:
> 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:
> [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:
> > 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