Friday, December 02, 2005

Where are Externalities? RIM vs NTP

I think RIM is being punished because they are Canadians. The ruling in RIM's case has failed to incorporate the idea of monopoly regulation and externalities and public goods criterion. Text messaging is a public service, lot of emergency response personals have been using it. I think RIM's technology is more advanced as compared to NTP. The decision has a weakness as well. It has not given enough time to people and firms to adopt PLAN B. You don't make a decision which has negative welfare consequences for the society.

Fearful Messagers Cross Their Thumbs: "everyone's taken notice; the word on the street is that
BlackBerry is in a jam,' said Bob Egan, director of emerging technology at Tower Group, a market analysis firm. He said he spoke with several financial and investment firms that are considering moving their e-mail computer servers to Canada, RIM's home country, in an attempt to avert the U.S shutdown. But no one has figured out if that would work, he said.
Wireless carriers that offer BlackBerry service declined to comment yesterday on their plans for handling customers if BlackBerry goes dark."

After four years of litigation, RIM suffered another legal defeat Wednesday when the judge denied its request to further delay a permanent injunction. RIM could be forced to shut down service to almost all 3.65 million U.S. customers, except the 10 percent who are government or emergency-service users. It could avoid that fate by settling with NTP, which analysts have predicted could cost as much as $2 billion.

By the way there is greed involved and the loss in business is not to RIM but to millions of people.
A Virginia court ruled Wednesday that a $450 million preliminary settlement between RIM and NTP Inc., which was signed in March, isn't binding.
NTP is now expected to seek an injunction preventing U.S. Blackberry sales and service, which could force RIM to pay more to settle.

Canadian economy may benefit as many firms may plan to move part of their IT offices to Canada as the news report suggests.


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