"There is no indication of any change in the near future regarding the current state of competition. Market forces have not yet met the challenge of controlling price increases."

Here are just a few of the ways competition has benefited consumers:

• AT&T no longer lets you make five free 411 calls per month. Now it costs $1.50 for local numbers and $1.99 for all others.
• Verizon won't let you make four free 411 inquiries anymore. Now they charge $0.95 for local listings and $1.50 for all others.
• AT&T boosted the price of daytime calls by 34%, evening calls by 93%, and nights and weekend calls by 233%
• Call waiting is now 86% more expensive.
• Keeping your name out of the phonebook now costs 346% more.

In a recent briefing for investors, AT&T boasted that its average monthly revenue per primary household line "ramped steadily over the past several quarters," to $60.16 in the first quarter of 2008 from $57.08 a year earlier.

So much for all that competition between Verizon, AT&T, Frontier, SureWest, Vonage, Skype, and others.

The telecoms have repeatedly proven that their version of the "free market" is a scam that harms consumers and enriches shareholders. California's Public Utilities Commission has recommended the only reasonable measure: reinstating price controls.

Getting the 411 on phone charges [The Los Angeles Times]
(Photo: Getty)

Or something like that.

The Commission approved the controversial merger last night on a 3-2 party-line vote. The nation's only two satellite radio operators have agreed to abide by several voluntarily conditions:

• Consumers will be able to purchase small a la carte packages.
• Third parties will be allowed to design and sell their own receivers.
• Sirius-XM will soon rollout an interoperable receiver that can receive signals from both companies.
• 4% of the new conglomerate's channels will be reserved for public interest programming.
• No price hikes for three years.

The two Democratic Commissioners were receptive to a merger, but voted against the deal after the companies refused to offer strong consumer protections.

"I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, greater choices among innovative devices and real competition with digital radio," Adelstein declared. "Instead, it appears they're going to get a monopoly with window dressing. We missed a great opportunity to reach a bipartisan agreement that would have benefited the American people."

Last week, Adelstein told reporters that he'd back the proposed union if the two parties honored a six-year price cap, include digital radio in all tuners, and "make one-quarter of their satellite capacity available for public interest and minority programming."

Both Sirius and XM received their satellite radio licenses from the FCC in 1997 under the condition that they never merge.

Satellite Radio Merger Approved [Washington Post]
Report: FCC set to approve XM Radio-Sirius merger (updated) [Ars Technica]
PREVIOUSLY: XM-Sirius Merger Will Double Monthly Prices?

The starting point for comparison is 1996, when Congress deregulated the telecom industry, ostensibly to spur competition. Startups and cable companies quickly trammelled the telecoms' ability to dictate prices, but nobody emerged to take on cable.

Kevin J. Martin, chairman of the F.C.C., said in an interview that since 1996, when Congress increased competition in telecommunications, prices have dropped for many other services.

“We’ve seen the opposite occur in the cable industry,” he said. “The dramatic increases in pricing we’ve seen are one of the most troubling issues from a consumer point of view.”

In 2007, average monthly revenue for each Cablevision subscriber was $75, up from $65 in 2005, according to SNL Kagan, a research company. At Time Warner it was $64, up from $54.50.

The industry isn't changing its prices or practices because consumers aren't changing their habits.

“I work eight hours a day facing a computer. When I come home, the last thing I want to do is mess with another computer,” said Eric Yu, 24, a college student in San Francisco who pays around $80 a month for cable.

Mr. Yu said he watches only a handful of channels, including some in high definition like National Geographic. But to get them, he has to pay for a premium package. “I just pay the bill and try to forget about it,” he said. “It lessens the pain.”

Well, some are...

Evelyn Tan, 22, a friend of Mr. Yu, takes a different approach. She pays Comcast $33 a month for Internet access and does not get cable television — but she does watch TV programming.

In fact, she watches ABC shows like “Desperate Housewives” and “Gray’s Anatomy,” which are free on the Web. When she wants to watch shows or movies that are not readily available online, she says she easily pirates them. “I would not pay for cable TV at all,” she said.

A la carte programming isn't coming anytime soon, but the monopolistic anti-consumer juggernaut Verizon might provide some relief as it elbows its way into the television business. While Verizon is no better than its cable competitors, its arrival opens a brief window for competition by allowing consumers play one giant against the other to eek out slight savings on cable programming.

Of course, those slight savings might only bring your rates closer to what you were paying two or three years ago. Neither the Times nor the FCC think cable is worth the cost. What do you think?

Cable Prices Keep Rising; Customers Keep Paying [NYT]
(Photo: Getty)

The L.A. Times says the move is driven by pure greed on the part of brick-and-mortar restaurants, and that the new legislation attacks an L.A. institution:

Forget the Getty — it's the taco trucks, and their crowds, that are the true culture of L.A. Attacking the trucks is like New York going after its hot dog stands or Memphis banning barbecue pits.
 
And other than raw greed, I can't see any reason for it. Ron Mukai, an East L.A. developer, says the trucks are unfair competition, edging out the "legitimate brick-and-mortar businesses." But the county's 14,000 registered catering trucks seem just as legitimate as restaurants—they're just providing a different service. Restaurants provide meals, and a table to eat them at, and walls to eat them within. Taco trucks provide food, pure and simple. They charge less because they're selling less.

This is strictly confidential, but all the paperwork is signed and ready to go, and XM has fully acquired Sirius Radio. Come May, there will be a substantial price increase for XM Radio, as it will, in June or so, host all the Sirius channels. It would be best to simply extend your XM plan as we will honor your current contract price per month before we begin hosting the Sirius stations.

Although the second-generation laptop is expected to cost from $250 to $350 to make, it would be priced higher for retail sale after it's loaded with various software applications, Kwan said.

She noted that the computer's price and features are still being hashed out between Intel and the companies considering making it, which she declined to name. Whichever company eventually manufactures the new machine might choose to make several versions, each loaded with different combinations of applications and selling for different prices.

Those options will be brought up in a meeting Intel plans to have with some computer manufacturing executives soon. "We are going to talk about the next generation features of it in the next couple of weeks," Kwan said.

Would you consider buying the Classmate or one of its competitors for yourself or your kids? Tell us why in the comments.

Intel to offer low-cost laptop [Mercury News]
(AP Photo/Paul Sakuma)

You never knew the ice cream bizness was so mad gangsta, did you? This is worse than the time Vanilla Bean took out Heath Bar Crunch. Bigger picture inside...

That's certainly how it worked out for Hyman. Soon after declining Starbucks's buyout offer, Hyman received the expected news that the company was opening up next to one of his stores. But instead of panicking, he decided to call his friend Jim Stewart, founder of the Seattle's Best Coffee chain, to find out what really happens when a Starbucks opens nearby. "You're going to love it," Stewart reported. "They'll do all of your marketing for you, and your sales will soar." The prediction came true: Each new Starbucks store created a local buzz, drawing new converts to the latte-drinking fold. When the lines at Starbucks grew beyond the point of reason, these converts started venturing out—and, Look! There was another coffeehouse right next-door! Hyman's new neighbor boosted his sales so much that he decided to turn the tactic around and start targeting Starbucks. "We bought a Chinese restaurant right next to one of their stores and converted it, and by God, it was doing $1 million a year right away," he said.

P.S. Starbucks is awesome. Playstation is awesome. Nintendo is awesome. Apple is awesome. Microsoft is awesome. Dunkin' Donuts is awesome. Just wanted to prime the comments a little before we head into the weekend.

"Don't Fear Starbucks" [Slate]
(Photo: rudolf_schuba)

Low-cost U.S. carrier JetBlue Airways Corp. is applying to launch charter and scheduled service between Canada and the United States, a move that is expected to shake up Canadian rivals and reduce transborder fares.

JetBlue, which built its reputation on a combination of low fares and in-flight services such as free snacks and seatback screens with live television, proposes to use 150-seat Airbus A320s and 100-seat Embraer ERJ-190s for new flights into Canada.

Domestic airlines face low-cost rival from U.S. [Globe and Mail]

The committee chairman, Rep. Ed Markey, said this about requiring the FCC to collect data more accurately:

The state of knowledge around the status of broadband services in the United States also affects the ability of policymakers to make sound decisions. The federal government can do a much better job in reforming multibillion-dollar grant and subsidy programs—whether at the Rural Utilities Service or the universal service program at the FCC.

Since the bill was introduced earlier this year, Markey has compromised with Republicans by no longer redefining broadband as speeds of at least 2M bps. Republicans also rejected Markey's idea that broadband providers give the government information on prices and speed.

At 10am Airtran filed an airfare between Memphis and Minneapolis (both are Northwest Hubs) for $69 each way — $50 less than the current cheapest price on Northwest (Northwest has the only daily non-stop).

So why do airlines employ the "tweak"?

Airlines watch each other closely. They certainly don't want to be blindsided by another airline and are fiercely protective of their market share between certain cities. So in this case it is most likely that Airtran doesn't like something that Northwest "did" to them out of Atlanta (Airtran's Hub).

How Do Airlines "Tweak" Each Other? [Rick Seaney]
(Photo: Larsz)

From the AP:

Wal-Mart has been playing up its low prices since late last year after getting hurt by a focus on trendy merchandise in an effort to get affluent customers to buy more than just groceries. While the upscale strategy worked in electronics, it failed in home furnishings and apparel, resulting in sluggish sales since last fall.

In bid to revive sales, Wal-Mart will slash back-to-school prices [AP]
(Photo: laffy4k)

"Hotwire.com announced this week that it would drop its $6-a-ticket charge for airline reservations on both its "opaque" reservations (the bargain-priced fares that don't let you know exactly what flight you've booked until after you've paid) and regular bookings through summer. Last week, Priceline.com announced it was suspending booking charges on regular airfares through Labor Day. (The deal excludes its opaque, name-your-own-price fares.) Fees range from $5 a domestic ticket to up to $9.95 for an international reservation.

And on Wednesday, Cheaptotravel.com, a sister site to Travelocity that launched in January and targets price-sensitive travelers, followed suit, dropping its $3-a-ticket fee through the summer. A fourth agency, TripSync, a niche site geared to business travelers, may have triggered the no-fee movement when it permanently dropped its fees in late March."

Some booking fees melt in summer [USA Today]
(Photo: alex-s)

The historic deal allows any American airline to fly into Europe and any European airline to fly into the states. American planes can also travel between European countries, although European planes can't travel between US states.

What can we say, pretty sweet. — BEN POPKEN

Open Skies Deal Signed [AP via Upgrade: Travel Better]
(Photo: Ben Popken)

This is Virgin America's vision of budget, yes, budget, air travel. And you can't go on it.

The DOT has tentatively rejected Virgin's app to operate in the U.S., essentially because they're a bunch of tea-snorting brits. Maybe they can install some American figurehead. In any event, Virgin released this video on YouTube and set up LetVAFly.com to take the fight to the consumers.

So if you want them to fly, go to their website and sign their petitions and send letters and wear tshirts and crap. As ever, we're dubious of this marketing effort, but welcome competition to the American air travel market. Come on in, Johnny Reds. — BEN POPKEN

Let VA Fly [via Jaunted]

TAO is functionally similar to Netflix but different in that in that its name is longer. — BEN POPKEN

Free Blockbuster rentals for Netflix subscribers [Lifehacker]

The initiative will offer business financial grants, advertising in Wal-Mart stores and training by the company themselves on how to compete with Wal-Mart.

If this sounds like Bruce Lee smiling in your direction and flicking you a butter knife to defend yourself with right before he leaps into action and kicks your sternum out through your back, or buying your toddler a small plastic car to putter around in right before you run him over with a monster truck, that's because it is a lot like that.

Wal-Mart to Offer Help Near Urban Stores [New York Times] (Thanks, Boxtank!)

The online retailer still needs to sign licensing agreements with the four big music companies.

Amazon is thinking about offering the players, which may be built by Samsung, free as part of a subscription offer, or selling them with preloaded songs that could be swapped out for other songs.

Somehow we think it would be appropriate for you to play "Video Killed the Radio Star" now. As part of our customer empowerment program, we'll let you make up the reason why.

Report: Amazon to Compete with iTune, iPod [ComputerWorld]