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Category: Business

Regulating TVs -- who wins, who loses?

November 18, 2009 |  3:26 pm

The California Energy Commission unanimously approved a proposed regulation today capping the power consumption of televisions sold in California, starting in 2011. Although the Consumer Electronics Assn., which represents the world's largest TV makers, was apoplectic about the ruling, The Times' Marc Lifsher reports that one faction -- the LCD TV Assn. -- was all smiles. The reason? LCD sets are less power-hungry than plasma TVs. In other words, as so often happens when the government regulates products, it favors one technology over another -- and manufacturers know it, even if the regulators insist otherwise.

(We on the Times' editorial board had also urged the commission last month not to adopt the rules, warning that they could inhibit innovations that might do more for the environment in the long run.)

The real bite in the regulations won't come until 2013, when the caps are reduced and, potentially, the rules are extended to larger TVs. Representatives of the CEA struggled at a news conference this afternoon to cite specific examples of new, feature-laden TVs that couldn't meet the 2011 cut-off -- after a bit of research, they offered one 50-inch Samsung plasma set, although more examples are likely to be forthcoming soon. But they warned that few if any of today's models would meet the tougher limits.

Granted, this is an industry that innovates rapidly and has been particularly good in recent years at lowering power consumption. On the other hand, this is also an industry that regularly loads new features into its products to try to restore the profit margins that erode quickly in the brutal competition for buyers. At the moment, manufacturers are racing to present digital TVs that can present 3-D pictures, a task that requires either a high screen-refresh rate or polarized glass. The former drinks power, the latter drinks dollars. Manufacturers are also integrating more robust Internet capabilities into their sets, which also can demand more power.

The CEA fears that the new regulations will kill that kind of innovation and feature-expansion, as well as blocking new technologies that, like plasma and LCD, enter the market as relatively inefficient users of power only to become significantly better at managing their electricity use as they mature. It's certainly true that the rules would hold technologies off the market until they're efficient enough to meet the new standards; the question is whether manufacturers would be willing to develop generation after generation of products they can't sell just to get to that point.

One other caveat: California's new rules may have little effect on the market if no other state follows California's lead. In that case, the main losers would be California retailers, who wouldn't be able to offer as full a selection of products as online merchants in other states.

The energy commission insisted that the regulations would benefit consumers because the new TVs they buy will use less power -- an average of $30 per year. That seems overstated, however, because it ignores the improvements the industry has been making on its own. And even if $30 is the right number, that's chicken feed compared with the higher prices shoppers may have to pay to get a more efficient set with the performance they want.

The commission didn't seem to recognize that not all TVs are created equal. Just because consumers can find a more efficient model that's the same size as a power-hungry TV they like, that doesn't mean they can find one with the same picture quality in the same price range. Of course, exceptional TV picture quality isn't a birthright, and conserving energy is good for public health and the environment. But the commission asserted that its rules would be all gain, no pain, and that's a quixotic view of the market, to put it kindly.

-- Jon Healey


The energy-efficient TVs you want but may not be able to buy

November 11, 2009 |  3:24 pm

TV A Rasmussen Reports poll released Tuesday seems to confirm a point The Times made in an editorial last month on a California regulation that would ban large-screen TVs from being sold because they consume too much energy: Leave it up to the market to catch up on electricity-inefficient televisions. An excerpt from the Rasmussen summary:

A new national telephone survey by Rasmussen Reports finds that 66% of Americans oppose a law that would effectively ban the sale of big-screen televisions to save energy. Sixteen percent (16%) favor the idea, and 18% are not sure.

Most adults (53%) say being able to buy whatever kind of TV they want is more important than conserving energy. However, 37% rate conserving energy as more important.

Still, 54% are willing to pay more for a television that is more energy-efficient. Thirty percent (30%) are not, and 16% aren’t sure.

Conservation-minded folks (this bike and bus commuter considers himself one) may be discouraged by the majority opinion that most people feel being able to buy whatever mega-screen television they darn well please is more important than saving energy. But the energy-unregulated TV market is working in conservation's favor: Nearly the same percentage of people -- 54% -- say efficiency is important enough to them that would pay more for televisions that use less electricity.

As The Times' editorial pointed out, the new regulation would actually hamper the innovation already underway in the industry. The Rasmussen poll adds another point: California's action may deprive consumers of the energy-efficient entertainment they'd pay a premium for.

Hat tip: Katherine Mangu-Ward and Reason's Hit and Run.

-- Paul Thornton

Photo credit: Gina Ferazzi / Los Angeles Times


Broadcasters challenge songwriters' price-setting power

November 5, 2009 |  5:57 pm

Federal law gives copyright owners a legal monopoly over public performance of their works, among other uses. But their market power is supposed to be limited by the competition from other copyright owners. Consider the case of songwriters. Paul McCartney can make you pay for the privilege of including "Jet" in your movie, even if it's recorded by Shonen Knife instead of McCartney's Wings. But if you don't like what he charges, you can write your own material or go to another songwriter who demands less.

Unless you can't go to someone else. That's the problem TV broadcasters face when they air syndicated programming. They're contractually bound to air the programs they buy with the music that's already in the soundtrack. As a result, they have zero leverage with songwriters when it comes to negotiating for the rights to broadcast those songs. A group of broadcasters has now gone to federal court in New York for help, filing a class-action antitrust lawsuit against SESAC, one of the three performing rights organizations representing songwriters and music publishers. (You can download a copy here.)

The complaint was filed Wednesday afternoon by lawyers from Weil, Gotshal & Manges, and SESAC hasn't offered any comment yet. It singles out SESAC, the smallest of the performing rights groups (the others are ASCAP and BMI), for two reasons: SESAC's stable of composers includes many of the leading music writers for TV and commercials, and the other two rights groups' rates are already overseen by federal courts through longstanding consent decrees with the Justice Department.

Not being a lawyer, I won't try to guess how strong the broadcasters' case is. What's interesting to me about this case is that, unlike many of the lawsuits I write about, it doesn't challenge the breadth of the copyright owners' rights. Instead, it challenges how they're being used. According to the lawsuit, SESAC gives broadcasters the choice between buying a blanket license — the right to make unlimited use of all the music in SESAC's repertoire — or buying rights for songs on a per-program basis. But SESAC increased the cost of the per-program deal so much in recent years, it has become uneconomic, the lawsuit contends. As a result, broadcasters have been stuck buying ever-more-expensive blanket licenses, rendering moot their efforts to shop around for programs with less costly sources of music. In other words, SESAC is accused of eliminating the competition that mitigates the copyright holders' monopoly power. Meanwhile, the lawsuit claims, SESAC has used the higher fees it's been collecting to attract more soundtrack and commercial composers, tightening its grip on the market.

The broadcasters asked the court for a permanent injunction barring SESAC from fixing prices and other anticompetitive behavior. If they succeed, SESAC could find itself in the same court-supervised posture as ASCAP and BMI. But another way to restore the full benefits of competition among songwriters would be to have the producers of TV shows and commercials obtain the performance rights to the music they use, on top of the sync licenses and other clearances they routinely negotiate for. (Most networks obtain the performance rights for the new shows they produce for their stations and affiliates, but not for the same shows when they're sold into syndication.) As it is, the competition among songwriters ends as soon as a soundtrack is picked. That's why SESAC is allegedly in position to make take-it-or-leave-it offers to broadcasters, who have little choice but to take it.

-- Jon Healey


Cruising toward gigantism

November 3, 2009 |  3:41 pm

Oasis Just when you thought the era of bigger-is-always-better was over, the Oasis of the Seas heads on its maiden voyage across the Atlantic to Florida.

This isn't just a really, really, really big cruise ship -- 40% larger than the previous title holder. It looks like my grandparents' Bronx apartment building perched on a barge and topped with a flying saucer. The $1.5-billion ship has entire neighborhoods, seven of them, and no wonder. With capacity for 6,300 passengers and more than 2,000 crew members, this isn't exactly the setting for an intimate cruise. By lowering its smokestacks, the 20-story-high ship was barely able to squeak under a Danish bridge on its way from Finland. And for those who yearn for the biggest and newest in travel, its home port will be Fort Lauderdale, with passenger cruises scheduled to begin in December.

So far, cabins are selling well, reports Royal Caribbean, owner of oasis of the Seas, even with the ship's  urban-development design and curious name. An oasis is a wet, lush part of the desert, and even though it has come to mean a refuge of any sort, I can't help the picture of passengers' feet sloshing in puddles of water on deck in the midst of the Caribbean.

Photo credit: Johnny Holmen / EPA

-- Karin Klein


Digital anorexia

October 16, 2009 |  1:09 pm

Weird Ralph Lauren has apologized, but that doesn't mean blogs or feminist groups are about to let go of the  grotesque retouch job on a fashion shot that makes the model's waist look like it was squeezed into an illegal torture device. Her hips appear narrower than her head, as blog Boing Boing pointed out, and her thighs look like they came straight from a classroom skeleton. The clothing company eventually confessed to the mistake, saying it was having a bad Photoshop day.

But now the National Organization for Women is demanding a further apology, to women everywhere for the company's alleged obsession with portraying extreme thinness, and preferably also to Filippa Hamilton, the model in the ad who was fired by Ralph Lauren after years of being one of its top models. Hamilton said the clothier found her 120-pound girth on a 5-foot-10 body -- translating to a size 4 -- too  bulky to fit into its sample sizes. The company denies that's why she was fired.

Meanwhile, the blogs are gleefully showing off another photo, reportedly also Ralph Lauren, showing a pretty model with a bizarrely thin, elongated, hipless body, like the aliens in "Cocoon." Never fear, E.T. Your short legs and dumpy midsection will never qualify you as a Ralph Lauren model -- that is, not without emergency Photoshopping -- but NOW is holding its fourth annual "Love Your Body" celebration next Wednesday.

Photo: On the left, Filippa Hamilton with digital liposuction; on the right, as she is. Credit: AP

-- Karin Klein 


In today's pages: Hospital fees, banking fees and the fate of tuna

October 9, 2009 |  2:45 pm

Bluefin What's not to like about a proposed fee on California hospitals? The hospitals themselves support it, because it would bring in billions of dollars in federal funding to repay the hospitals and other health care providers for the medical care they give to poor people. The Times editorial board urges Gov. Schwarzenegger to see the logic and sign the bill to make it happen.

They call it overdraft protection, but there's little to protect the consumer from the multibillion-dollar flow of money to banks that charge a fee over and over and over again to debit-card users whose accounts can't cover their purchases. Often the fee is bigger than the purchase, but the customer simply doesn't realize the account is overdrawn. The Times calls on the Federal Reserve to fix this with rules that require better consumer information, a choice for customers who don't want the so-called protection and notification for the customer before that costly but unaffordable purchase is made.

And the board calls on Honduras to allow the return of President Manuel Zelaya -- with limited powers -- until the Nov. 29 election, though it also calls on the international community to make sure Zelaya understands he should not attempt to stay in power.

Let's admit this openly: Tuna aren't as awe-inspiring as whales. They don't spout in the middle of the ocean or do a slow dive that ends with the farewell wave of a giant tail. Nonetheless, they need protection after drastic overfishing, writes Joshua Reichert of the Pew Environment Group. On the Times Op-Ed page, Reichert argues that fishing caps haven't worked and that nothing but endangered-species status will save the Atlantic bluefin tuna.

Finally, energy journalist Richard Nemec writes that Los Angeles has been playing political musical chairs in determining leadership for the Department of Water and Power instead of hiring the experts it so desperately needs.

Photo: Gavin Newman / Greenpeace International / EPA

-- Karin Klein


In today's pages: Guns, Coke and Congress

October 6, 2009 | 11:59 am

Rogers Small-government conservative columnist Jonah Goldberg makes a startling argument on today's Op-Ed page: We should make the House of Representatives bigger. A lot bigger, in fact; Goldberg says a Congress with 5,000 members would shake up our nation's calcified two-party system and more closely approximate the kind of democracy the founding fathers intended.

UC Irvine School of Law Dean Erwin Chemerinsky, meanwhile, debunks arguments that the healthcare bills pending in the House and Senate would be unconstitutional. And obesity experts Kelly D. Brownell and David S. Ludwig argue in favor of a tax on sugar-sweetened sodas, which would help fund healthcare reform programs and lower healthcare costs by decreasing obesity and related ailments such as diabetes.

On the editorial page, the board urges the Obama administration to consider backing new elections in Afghanistan or a transitional government, unless monitors can determine that the country's Aug. 20 election was legitimate.

The editorial board also takes up a gun-rights case and argues, surprisingly enough, in favor of stronger protections for gun owners. Though the board favors measures to reduce gun violence, it thinks the Supreme Court should rule that the 2nd Amendment applies to states as well as the federal government. That's because allowing states to ignore this part of the Bill of Rights could undermine the requirement that they abide by others.

Finally, the board notes that Comcast Corp.'s proposal to buy NBC Universal cuts against the grain of recent media deals, and its effect on the marketplace may be limited. But it will be interesting to watch how the combined company's approach to the Internet might change.

* Cartoon by Rob Rogers / Pittsburgh Post-Gazette


In today's pages: Whitman, Polanski and Obama

September 29, 2009 | 12:32 pm

SteinToday's editorial page casts a wary eye on former eBay CEO Meg Whitman, whose candidacy for governor of California has been shaken by revelations that she didn't register to vote until she was 46 years old, and only became a Republican two years ago. Is someone so seemingly apathetic about politics the best choice to govern what may be the most ungovernable state in the union?

With all due respect to the French culture minister, who said U.S. efforts to prosecute filmmaker Roman Polanski revealed the face of a "scary America," we on the Times editorial board think it's time the 76-year-old fugitive was brought to justice. Polanski's defenders ignore the simple fact that he fled the country while facing charges of raping a 13-year-old girl. Even for successful movie directors, that's not OK.

The editorial page also weighs in on plans to upgrade the sagging waterfront in San Pedro, which the Harbor Commission will consider today. There's much to like in the proposal, but something not to like as well: Plans to build terminals for cruise ships adjacent to San Pedro's only public beach. We think commissioners should proceed with the overall plan, but table the outer harbor cruise berths.

On the Op-Ed side, columnist Jonah Goldberg questions whether President Obama is living up to his centrist campaign rhetoric on the war in Afghanistan. While running for office, Obama tried to out-hawk Republican Sen. John McCain when it came to the war, but as the conflict becomes less popular he seems to be reconsidering. "What seemed like principled centrism in 2008 might simply be exposed as left-wing expediency in 2009."

Professor Christopher Layne and journalist Benjamin Schwarz ponder the waning of the Pax Americana, the post-war bargain in which the United States spent overwhelmingly on its military in order to secure world peace -- a practice that given current fiscal conditions is no longer sustainable. The result will likely be de-globalization as countries move more aggressively to pursue their financial and security interests.

Finally, civil rights lawyer Constance L. Rice bemoans the resignation of the head of the L.A. Unified School District's construction division, who was apparently forced out by district politics. The independent construction division was created to avoid more disasters like the spectacularly expensive Belmont Learning Center, and the increasing political interference doesn't bode well for the future.

Cartoon: Ed Stein / Newspaper Enterprise Assn.

-- Dan Turner


In today's pages: Medicare, Gingrich and tax reform [UPDATED]

September 22, 2009 | 12:43 pm

Toles

What if instead of calling it the "public option," supporters of heath care reform simply referred to their effort to expand insurance to all Americans as "Medicare"? To be more specific, author Theodore Roszak proposes on today's Op-Ed page that reformers simply expand Medicare so that people of all ages could qualify, not just seniors. It's an existing, well-trusted program that already exists, so expanding it would quell much of the political opposition.

Former Times staff writer Johanna Neuman polled Washington insiders for the cause of today's hyper-partisanship in the Capitol, and names the most-cited culprit: Newt Gingrich. The architect of the Republican takeover of Congress in the mid-1990s also changed the congressional calendar and urged Republican lawmakers to spend their weekends at home, not mingling with colleagues of both parties in D.C. as they'd done before.

Updated at 1:05 p.m.: Neuman will discuss her Op-Ed on the "Michael Smerconish Show" at 7 a.m. EDT Wednesday, in case you're up that early and want to listen online. Or if you're in Philadelphia.

Columnist Jonah Goldberg eulogizes the "godfather of neoconservatism" Irving Kristol, who died last week at 89 -- and who had a major impact on Goldberg's political thinking.

On the Editorial Page, The Times examines the much-delayed work of the blue-ribbon panel trying to reimagine California's tax structure, and wonders if it might be a little too innovative. Its business receipt tax might not stand up to legal scrutiny, and its attempts to decrease revenue volatility appear to come at the expense of the poor and middle class.

We also address the backfiring strategy of seven former CIA directors who sent a letter to President Obama urging him to abort a Justice Department inquiry into torture... er, enhanced interrogation techniques... by the CIA under the Bush administration. The directors seem not to have realized that they were asking the president to abandon his assurances that Atty. Gen. Eric Holder would put the law above loyalty to the White House. The unintended result: Obama was forced to renew his promise, the opposite of the outcome they wanted.

And on the tangled question of Net neutrality, we weigh in on the side of new FCC chief Julius Genachowski, who wants to develop new rules governing what Internet service providers can do with the data that travels through their networks. Without such rules, the major phone and Internet companies have too much power to quash innovation in the name of "managing congestion."

Cartoon by Tom Toles / Washington Post

-- Dan Turner

 


In today's pages: Teachers, cops and animal cruelty

September 15, 2009 | 12:41 pm

Kids Should California teachers be evaluated based on their students' performance on test scores? That's the subject of dueling pro vs. con commentaries on today's Op-Ed page. On the pro side is state Board of Education President Ted Mitchell, who says California must change a law forbidding such evaluations if it is to qualify for millions of dollars in federal funds, and that the system would help school districts reward exceptional teaching and weed out instructors who can't make the grade. On the con side is former LAUSD teacher Walt Gardner, who points out that teachers in low-performing schools are often dealing with kids from very poor families who are dealing with pressures that make learning a serious challenge, and expecting teachers to overcome such obstacles on their own is unrealistic.

Meanwhile, physicist Frank von Hippel aims to debunk claims from the nuclear-power industry that reprocessing nuclear waste is a solution to our problems with storing the highly radioactive materials. Not only is it extremely expensive, it fails to reduce the stream of long-lived nuclear waste and provides access to weapons material that could fall into dangerous hands.

Today's editorial page notes the one-year anniversary of the collapse of Lehman Bros. by pointing out that the $700-billion federal bailout that followed helped prop up the nation's financial system, and without it the economy would undoubtedly be in worse shape than it is. Nonetheless, now that the economy is on the rebound, "it's time for the administration and the Federal Reserve to lay out a strategy for pulling the government out of the financial industry."

The Times also weighs in on prospective furloughs or layoffs for city employees, who in tough financial times may be sacrificed in order to keep alive Mayor Antonio Villaraigosa's ambition to keep hiring more police officers. Though that seems unfair, it's the right thing to do for Los Angeles.

And we give a boost to a package of state bills aimed at fighting animal cruelty, including a ban on puppy mills, a crackdown on dogfighting (thanks Michael Vick!), and a measure mocked by the governor to forbid docking (cutting off) the tails of cattle.

Photo by Seth Perlman / AP



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