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January 20, 2010

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Mike Bruzzone

Intel Case Update from Camp Marketing

Having audited 50 individual news reports days following FTC announcement of Docket 9341 move to hearing stage, two I thought, stood out for their original analysis and third party reports.

On FTC’s new strategy: kick ‘em when they’re down, I couldn’t agree more with Mr. Downes whose guest opinion piece appeared on CNET Network December 17th. For thought provoking observations and ponderings Mr. Downes receives my only 5 Star rating for original analysis beyond trade answers.

For Intel crackdown draws mixed reaction in Silicon Valley, by Ben Pimentel appearing on MarketWatch December 21, my only runner up for depth of third party observations.

In this Intel Case Update, I will add some case insight from observations in Mr. Downes analysis and Mr. Pimentel’s report.

Continuing too counsel optimistic approach of whole remedies per Intel DOJ compliance obligations, that predicate Intel first mover responsibility to correct by Intel’s agreement.

Ten month clock is ticking.

On FTC kick’em while their down, “on nearly all allegations cited in regulatory actions in United States and abroad duplicated in the FTC complaint”, Mr. Downes is exactly correct. Nearly all including core sets and supersets of Sherman Act, Clayton Act, RICO, industrial espionage and economic espionage questions.

Noteworthy the case is not simply about AMD, nVidia, VIA, helping competitors or the consumer good. Intel case matters concern restoring a competitive business environment that offer goods and consumer utility values for everyone.

Whole case matter concerns Nation’s law and governance requirements for competitive structure assuring democratic capitalism, society and Nation’s good. Normative values and principles that bind together a civil society are at stake here.

No one ever again should have to suffer the consequences of corporate power eclipsing the Federal Power. Under the laws of Intel Nation subset guild and sales clans eclipsing Nation’s law itself, are about to be remedied.

On surprise of FTC timing, investigations including GPU are continuous since Docket 9288 and never too late in the game for implementing structure and conduct remedies. For whole remedies no stone can be left unturned. With oversight controls necessary to reestablish corporate governance at Intel, in an enterprise infiltrated and taken over by organized network crime.

Under Section 5 of Federal Trade Commission Act, Commissioners powers to remedy business practices that have surpassed the threshold of harms are mandatory under United States and inter nation law. Intel case matters pass all judicial filters for movement too hearing and have for some time now. Given every opportunity to error correct the stall is entirely Intel’s.

Mr. Downes is correct in his analysis that “it’s unlikely incipient behavior is involved here; whatever Intel has done it has done for years”. Exactly so and that is for 16 years following the failure of DOJ vs. Intel. Through a history where Intel has misrepresented and concealed from governments, law enforcement, regulatory agencies, their enterprise and business channels taken over by organized network crime; U.S.C. 1961 § 222.

The question of Intel 1st notice under DOJ antitrust compliance obligations remains.

Certainly these are smart people at Intel despite all the false claims pursuant to monopoly and exclusionary methods. So it would be astonishing to me if Board Members and Chief Executives are not enrolled in the DOJ’s cartel leniency and amnesty programs.

Noteworthy, Intel continuing to deny Federal Trade Commission allegations is a false statement recoverable under the False claims Act. A claim that continues to cost Intel Corporation and its stockholder’s up to $11,000 for each false claim.

FTC decision to reinsert itself into a complicated horizontal by vertical matrix of ongoing litigations are now close to reaching resolution; assuring whole competition case remedy and prerequisite industrial social responsibilities. Where transparency beneficial to every American educates, fosters awareness and understanding of the repeating patterns that are competition espionage.

Thereafter, we as a society are enabled to address and remedy competition espionage in real time and not over 18 years time as in this precedent setting case. Restoring individual responsibility as one of the foundations for democracy in corporate enterprise that guards legitimate forms of democratic capitalism; for consumer, society and Nation’s good.

Complete situation analysis will confirm classic competitive requirement for regulating artificially accelerated technologic systems moving into 21st century networked markets.

A reapplication of the established competitive frame works for modern times.

This case is not about new law. It is about very old laws.

Mr. Downes assumes consumers are not being tricked or misled into buying Intel x86
intra platform computers. When in fact this aspect of the case investigation provides substantial proofs of consumer manipulation including computer price charged with a hidden consumer transport tax.

Finally no first party to the action, for which there are many, should be pressed into prosecuting such a precedent setting case on their own. Not AMD, not nVidia, VIA, no individual party harmed by Intel Networked. This has always been the government’s primary responsibility.

Case can establish precedent supporting Adams vs. Pan Am. And rectify argument on indirect consumer standing forever resolving antitrust inconsistencies associated with Illinois Brick.

With the Department of Justice recording Intel anomalies since 1991, FTC hearings offer Intel a diplomatic path for resolving competition components pending DOJ intervention.

Per Mr. Pimentel’s Intel Crackdown and the debate in Washington, that debate is about how to open competitive structure as a catalyst for innovation in a region that prides itself on innovation.

Inherent in this mission to open competitive structure we must consider Intel past as our foremost guide to prepare
for a brighter industry future. A future in which corporations demonstrate fiduciary responsibilities and responsible stewardship around innovation.

Only the whole situation analysis from what occurred these last ten years in and around Intel offer adequate foundation for decision making, whole remedies, oversight controls.

Where collaborative consensus and collaborative barraging have failed this leaves FTC only decision and control under circumstances that are unfortunately severe.

And with no disrespect to Mr. Huang the case is not about leveling the playing field, but opening it up for competition on the merits. Technology tread mill continues regardless. And that success is up to each competitor. Where complimentary value no competitor can refuse often relies on first mover advantage to deliver a whole product. Whole product when chosen by the market should have access to that market; at prototype, at beta validation, at commercial product phase.

Similar to Mr. Downes and Mr. Saffo, I too, was surprised by the totality of the complaint. Because much of the case assessment has been focused on per se violations of law meant to lower the financial hurdle supporting State ability to prove antitrust true positives.

Addressing industry, component taper, channel, and market violations under a Section 5 umbrella FTC hearing is all encompassing. Notable FTC has chosen to address industry violations normally considered under Sherman Act Section 2. Where channel and market violations including components of the Intel commercial fraud can be addressed under Sherman or Clayton Act.

Unpredictably, FTC addressing industry laterals was a surprise to me given their rule of reason nature. Finally, we can expect a full and fair hearing on the issues of access. The days of Intel using others as their design house openly under carrot and stick diplomacy, or clandestinely, are near a complete set of remedies. Remedies that in best management practice must see evolutionary improvement implemented for effectiveness and fairness. This won’t happen over night

In some ways GPU interface is Socket 7 all over again. With interface access at stake my personal belief is that any company running along on the technology treadmill, delivering highest throughput accelerator bus memory controller combination, is licensable; even to Intel.

And where superiority in whole product is at stake no anchors should be cast on those who invest ahead. In an industry stretching to surmount the hurdles of innovation, at the inflection point of process saturation, there can be no dragging back potential benefits of these costly technical developments. Efficiency costs have become much to steep on the trailing edge of CMOS average cost curve.

On the bullying and bribing, discounts and rebates; yes. All channel components of the Intel commercial fraud.

Some analysts suggest the case tricky for the courts to sort out; no. Structure proves Intel conduct by intent, per se. Structural cases are easiest to decipher from their components patterns. Decomposing the individual integrated working parts of Intel systems structure for unmasking Intel invented reality for real.

Structural improvement is a prerequisite for some conduct remedies. From perspective of change management based on what went wrong to now put in place what can work for everyone.

Yes the case is breathtaking in its scope. The FTC has reached deep into Intel through almost two decades of government interaction studying the repeating patterns of those interactions. Interactions through a history of Intel misrepresentations are understood better then ever before. FTC complaint demonstrates breath of constituent input greater in depth and scope then any other Intel antitrust investigation. Oversight perspective FTC is doing the necessary research.

On how this case will have a net effect on the valley one goal is to prevent both core and collateral sources of damage to industry, channels, markets, competition and innovation that have occurred for a very long time now, from continuing to occur; forever. Intel long reliance on a confidence network for regulating and policing other enterprise in industry and channels is over.

Two decades of unbridled monopoly has caused network effects difficult too reign in much less manage. Legitimate administrative oversight is imperative for success this one last chance. That is because proofs demonstrate Intel can have an undermining effect on innovation, industry and economies. Intel myths are about to be revealed for reversal back to normative values that are universally accepted best practices.

Preserving ability to innovate based on examples that demonstrate Intel methods of creative destruction can be very destructive. Meaning no more system gaming.

The case is foremost about insuring innovation; production short run to short run. Where Intel monopolization production short run, to short run, has restrained & limited platform competition on product merits. Including function integration as core benefit of Moore’s objective.

And yes the case might create new Intel law. Certainly augments to existing law. When Federal government must mandate to Intel Nation the only method remaining to impress on executive management operation as it should within the well understood Nation’s law.

Freedom to compete in an open environment free from the undermining effects of chaotic forces is our future. A difficult task whose successful implementation can become one of Intel’s greatest legacies.

Respectfully submitted,

Mike Bruzzone
Camp Marketing
Case TA, FCA Relator

John

Intel has been a very valuable asset to the needs of the internet. They also have been bringing better and better technology many times fold at cheaper prices than before. Much better products for cheaper prices. Nobody else can do what Intel has done in advancing technology. FTC is just wasting tax payers dollars to make a name for some egotistical ignorant politicians.

Dean McAdams

Intel does not have a monopoly. You can easily order a machine with an inferior AMD chip for $100 less than an Intel chip.

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