July 4, 2010; revision 5.1 with exhibit refinements, more detail on RICO proofs and monopoly pointers.
To: Chairwoman Schapiro & Commissioners,
Securities and Exchange Commission
United States Senate
Congressional Committees
State Attorney Generals
United States Attorneys
Chairman Leibowitz & Commissioners, FTC
Director Robert Mueller, FBI
Honorable Eric Holder, DOJ
Vice President Joseph Biden
Fm: Mike Bruzzone
Camp Marketing Consultancy
6025 McBryde Avenue
Richmond, CA 94805
Re: Intel Corporation Competition Case Update
2nd Notice of Intel Network SEC Violations; Case Reference HO-1248999
- Intel consumer & industrial monopoly recoverable grows to $88 billion
- $26.442 to $42 billion subset is consumer fraud legitimately due consumers.
- $43.827 billion industrial monopolization due industry & harmed shareholders.
- Quanda Model RICO proof; Intel Insider stock trading & NASDAQ market rig.
- Lettered Relator Seeks Attorney; FCA, 31 USC 3279, recovery of monopoly & fraudulent cost imposed on Federal Government’s Intel based PC purchases.
Honorable Commissioners, Senators, Congressmen, State Attorney Generals, U.S. Attorneys, U.S. Attorney General Eric Holder, Vice President Joseph Biden:
Pursuant to Camp Marketing Consultancy ongoing Intel Network case assessment: Consumer recoverable Intel Inside transport charge, monopoly price premium, industry monopolization on Intel economic and financial analysis grows total intent to monopolize recovery, by 12%, to $88 billion.
Monopoly recovery estimate is based on two investigative tracks. First, Intel monopoly system metric applied to Intel sales revenues on manufacturing estimates of Intel microprocessor quantities, per quarter, by Micro Design Resource[1]. Second, sorting out Intel monopoly system expenses misrepresented as legitimate costs within Intel financials.
Data analysis parallels FTC Docket 9341 time frame and covers day one on January 1, 1999 through mid 2004 on production; extending to 2006 on Intel financials. For the purpose of optimizing in period recovery estimate, data from both investigative tracks are
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
relied. Findings include proofs and pointers of RICO, enterprise network corruption and Sherman Act Section 1 and 2 per se condemnations of law. Findings are submitted to FTC, U.S. DOJ Antitrust, DOJ Criminal and Consumer Fraud, New York State DOJ for follow on discovery from Intel Network.
Revision 5.1 of this briefing updates State Attorney Generals on particulars of the case matters. Is meant by this case steward; the Relator original source, too solicit counsel for False Claims Act recovery of fraudulent and monopoly costs imposed on Federal government’s Intel microprocessor based computer purchases. This analyst believes FCA is now proven on weight of Intel false statements to conceal. monopoly and fraudulent costs imposed on Federal government and related GSA computer procurement claims.
Further this analyst encourages dialogue between State Attorney Generals and U.S. Attorneys for establishing a coalition to recover consumer harms, in each State, which can be calculated by the domestic ‘Standard Metropolitan Statistical Area’ subset of what is a worldwide consumer recovery value. Make sure your State and Federal District get its actual share of the consumer recovery in relation to not calculating this amount subject to worldwide distribution. Recover the transport charge ‘kick back’ value stolen by Intel Network, from general consumers within your State and Federal buyers within your District, and not a penny less.
To estimate the recovery in your own State House and Federal Building: 1) go to the IT Department; 2) find out how many Intel based PCs have been purchased and deployed their annually since May 1993; 3) multiply that amount by $25.50 each to determine your combined Federal Building and State House recovery values.
Background
Beginning Docket 9288, May 1998, various reports and analysis are submitted by this analyst to FTC now operating in voluntary civic service capacity under Department of Labor Code 3363.5. Today a decade of analysis delivers tens of Docket 9341 discovery proofs or pointers to proofs. Many of which this audience are familiar from prior reports by this analyst submitted to U.S. Senate, Congress, State AGs and U.S. Attorneys.
Under Docket 9341 discovery rules, work from this analyst is passed by FTC Bureau of Competition to Intel for legal rebuttal.
Three Components of Monopoly Recovery
Monopoly recovery is a worldwide financial value having three main components:
1) Consumer recovery is based on the system costs of Intel Inside tied charge back for routing Intel microprocessors across state lines and inter nation boundaries inside a computer chassis. See prior analyst submissions for specific details covering the illegal aspects of this market rigging rebate fee scheme.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
2) Consumer recovery from monopoly price premium associated with some Intel microprocessor and PC product introductions.
3) Industrial harms which include predatory product dumping, Intel selling at a price less then average total cost, measures of variable down to average fixed cost. Finally, estimation of the marginal cost for Intel to produce a single x86 microprocessor in relation to price sought with variable cost cross check. Where price is within or lower then average fixed cost, variable or marginal cost, revenues
from those quantities are recorded as an industrial monopolization recovery value for FTC discovery.
Consumer Recovery Subset 1; kick back, in violation of Sherman Act Section 1, Section 2, Clayton Act Section 2, 3, 4, 5, 13e, 13c, 13d, Title 48, 1986 anti kickback act
Of the $26.442 billion subset of consumer recovery documented from Intel production estimates (where $42 billion total set is documented by contract), $22.657 billion or 85% is associated with Intel Inside tied charge back sum misrepresented in Intel and PC Dealer financials. That sum is split between Intel and PC Companies 50:50 for the purpose of this analysis based on the Intel Inside monopoly system metric. Yet Intel’s portion is known to increase, and PC Companies decrease, over the 15 year duration of this Intel Insider operation.
Intel financials associate Intel Inside as a marketing cost credited to PC Company micro- processor sales. When this commissionable sales value is actually an accrued Dealer rebate passed through Intel as a sales reward for Media Sales Agents taken as their fee, to sustain the supply chain’s product distribution ties between Intel, PC Dealers and Media Agent’s sales channels. Sales Channels include PC Week, PC Magazine, Computer Shopper, Family Computing, PC World, Windows Magazine, other PC and some general media.
Rebate values are sustained from back in time with forward time purchase agreements. Production short run to short run, Dealer’s microprocessor purchases are unnaturally weighted to benefit them guiding Media Agents sales preferences. Intel 1st tier Dealers purchase microprocessors in excess of end demand solely to strip margin values, including consumer transport charge, prior to reselling overage into secondary broker channels. PC Dealers who are Intel’s 1st tier brokers monopolize majority of Intel margin values, including tied charge back, sustaining their Media Sales Agent artificial attractor and the cross industry distribution tie in total.
This relationship is a financially driven one, planned and implemented for Media Sales Agents to register, meter, report level’s of Intel microprocessor flows through PC dealer channels back to Intel. That is the nature of the charge back; for media registering and reporting back channel sales flows through PC Companies to Intel. Over time the system evolved into one which accelerated Dealer product flows artificially from one Intel product generation to the next, on the weight of Intel kickback placements meant to discharge certain Dealer inventory, to end market buyers, on an Intel time schedule.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
One Combined Cartel Proof
Additionally, for Dell and Gateway certainly, Intel PC Dealers earn a cartel margin gain from their Media Sales Agents as a result of their Intel Inside kick back. Cartel margin gain on this routing fee is secured when any PC Dealer’s annual advertising pages exceed Intel’s annual advertising pages.
Under Intel Inside contract guide all PC Dealers receive the Intel Corporation advertising page frequency discount rate from Media Sales Agents. Note the competitive limiter here for non Intel Dealers lacking this form of Intel Network scale economy. For PC Dealers who advertise at a greater annual page frequency rate then Intel Corporation annual pages, Cartel margin gain is secured on the difference in frequency discounts applied to Intel pages verse any Dealer’s deeper ad discount rate from Media Sales Agents.
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CAMP MARKETING CONSULTANCY |
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Media |
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n |
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= 1 |
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= 1 |
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I |
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B D |
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M S A |
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Intent to Monopolize Proof Dealing Combination & Cartel Proof Intel Inside Tied Charge Back |
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W A P S |
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Mike Bruzzone, Camp Marketing Consultancy, 415/250-4652 FTC 1999 & 12/23/09 |
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M |
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P C |
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B |
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Many Intel market rigging systems mimic electronic system structures. |
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Charge Match |
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Charged Back |
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Microprocessor Supply Charge in Excess of PC Demand.
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TIED CHARGE BACK |
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Dealer AD INSERTION TRIGGER |
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Intel Inside Dealer ACCRUAL Intel’s Media KICK BACK |
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Media Intel CHARGE BACK |
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1 |
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2 |
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4 |
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3 |
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PC PUSH |
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Inventory Clearing |
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Inventory Metering |
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Dealer Accrual Charge Match |
Media’s ad frequency discounts, called network buys, are based on any one Dealer’s annual volume page purchase agreement with Media Sales Agents. When anyone Intel Dealer’s annual pages of advertisement exceed Intel annual pages, added margin value is earned on every Intel kick back for every future ad insertion by these foremost cartel members. System diagram of cross enterprise industry bottleneck monopoly is depicted above.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
PC Company matching half of the media sales tie triggers the tied charge back match from Intel’s Dealer Accruals to Media Sales Agents. That value tie is misrepresented in PC Dealer financials as an advertising cost applied to every computer sale. Taken together computer end buyers pay both halves of this hidden transport charge in their computer’s end sales price. 100% of the consumer charge is taken by Media Sales Agents for directing Intel PC consumer search. Making consumer search focused, quick and easy.
This hidden consumer transport tax for Intel microprocessor product routing, taken by Intel and PC Companies from consumers, and paid to Media Sales Agents, is meant as a sales commission to pay for Media’s cost of Intel product sales; communications medium, display space, news coverage, Intel and Dealer content development including Dealer’s PC product reviews. For ZD, certainly, this payment was also a form of extorted tribute.
Because the tie is based on a variable commission reward on Intel microprocessor price, Media Sales Agents tend to push computers to consumers containing Intel’s highest priced; latest and greatest microprocessors. Or will focus on moving large lots of slow moving Intel microprocessor based computers that have been clogging up the Intel supply system; those capable of delivering a large total reward value to Media, when routed together until discharged from Intel PC Dealer inventories.
The existence of this Intel tied charge back system is the accounting compliment to Dell Corporation misrepresenting Intel kickbacks; rebates and loyalty rewards, as sales revenue now under investigation by the SEC. Intel’s half of the Dell accounting fraud is documented as cooperative advertising accounts misrepresented within Intel’s own financials since 1993. There is currently a rather extensive accounting fraud being hidden within Intel, by Intel and Intel Network. And I would presume under current investigation by the U.S. Department of Justice and the Securities Exchange Commission? Intel market rig was reported by this analyst to SEC in 2007; HO 1248999.
Intel tied charge back misrepresented in financials as a cooperative advertising expense documented contractually with Dealers x 2 for total set consumer calculation.
Reported in $ Billions
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
.325 .459 .654 .974 1.2 1.3 1.7 2.0 1.6 1.7 1.8 2.1
2005 2006
2.6 2.3 Total Docket 9341 Period of Review = $15,800,000,000
Total through Program Operation = $20,712,000,000
Source: Intel Annual Report to Stockholders
Note: x2 by contract agreement between Intel & Dealers = $31.6 billion to $41.424 billion
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
Consumer Recovery Subset 2; monopoly price premiums -
The remaining 15% consumer subset recovery of $3.785 billion is associated with personal computer end buyers paying a monopoly price premium on some Intel PC purchases. That percent of product, one Intel product generation to the next, where consumers paid a monopoly price for the microprocessor above the monopoly competitive or equilibrium price. Which means computer’s containing the latest and greatest Intel microprocessors. Computer’s featuring the highest speed, or most microprocessor cores, or the highest combination of performance and power savings in a notebook model. Microprocessors typically offered in the high performance computer brand models within Intel Dealer PC product lines. But can also be associated with computers containing Intel value priced microprocessors.
$3.785 billion dollar sum is conservative and advantages Intel on analysis which uses average price on quantities. Using preferred average weighted price across product types, the monopoly price premium can grow. Infra marginal product, that which Intel makes least of and charges most for, offers highest end buyer recovery potential for these small short lots of monopoly priced microprocessors. Product associated with Intel new microprocessor and new PC product introductions displaying patterns of 1st degree price discrimination, exclusive dealing, the raising of microprocessor price following predatory price moves designed to monopolize markets and to stop channel sales flows of competitor’s products. Competitors include x86 microprocessor horizontal competitors including AMD, chip set & graphic vertical rivals and compliments, like VIA and nVidia, other x86 and inter platform computers and some PC platform replacements.
One of the consumer monopoly price premium examples -
Below find partial economic analysis from the Intel planned economy; Pentium 3 risk production code name Katmai, 0.25 micron lithography, 450 to 600 MHz clock speeds.
Katmai average weighted price is calculated on Intel 1,000 piece price and Micro Design Resource quantities on speed splits. Micro Design Resource quantity estimates are long time and widely accepted by technology, finance and media industries who are Intel customers, stake holders and stockholders. MDR estimates are in fact the intra industry regulator itself, that was made into an inter industry sales game by Intel Network.
For Katmai, economic analysis below reveals $300,990,000 in consumer loss from paying a monopoly price greater than $450 for first quarter’s production of 1,905,000 units. Monopoly competitive equilibrium price is $363 which suggests a monopoly deadweight cost of up to $400,106,000 on second quarter production of 5,438,000 units. Run down quantities are less than $363, with end of run quantities priced $262 down to $178; are between average total and average fixed costs. No below fixed cost production is recorded for this specific desktop microprocessor short run. Although quantity and revenue difference in analyst and MDR Intel estimated shut down points are raised.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
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Mike Bruzzone, Camp Marketing Consultancy FTC Revised Check 5/31/2010 |
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Camp Marketing Consultancy |
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P R C E
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$100 |
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200 |
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300 |
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400 |
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500 |
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600 |
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700 |
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$800 |
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900 |
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1000 |
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2M |
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4M |
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6M |
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8M |
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10M |
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12M |
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13.343M |
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AFC = $145 |
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AWP $373 |
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$363 |
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$608 |
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$450 |
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$178 |
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$193 |
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$262 |
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ATC = $277 |
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COMPETITIVE EQUALIBRIUM |
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TR |
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▲TR per Quarter or MR |
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É |
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Qty |
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P3 500 2/28/99 |
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P3 450 2/28/99 |
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P3 550 5/16/99 |
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P3 600A 8/2/99 |
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P3 600B 9/27/99 |
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P3 533 9/27/99 |
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AVC = $133 |
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Shut Down Point |
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$300,990,000 Dollars Monopoly Price Product Consumer Recoverable |
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$342 |
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7 Quarters Quantities in Millions |
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I |
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P C |
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Mfg Cost $48.50 to $39.50 |
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Storm Wave with Crest and Long Face Fast to Peak, Concentrates & Reverberation end. |
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MONOPOLY PRICE LINE |
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500 MHz 450 MHz |
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550 MHz 533 MHz 500 MHz 450 MHz |
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600 MHz 550 MHz 533 MHz 500 MHz 450 MHz |
Foremost, consumer monopoly price premium of $300,900,000 and $764,517,480 in Intel Inside charge back values are recorded. Charge back values represent matching halves of the Intel and PC Dealer tie passed through to Media Sales Agents. In this estimate at 3% each on Intel total production revenue’s of $12,741,958,000. The specific percentage pass through value is defined contractually within the Intel Inside contract agreement between Intel, Dealers and Media Sales Agents. An evolutionary series of guidelines concerning tied charge back I’ve encouraged FTC to discovery for a decade now.
Katmai analysis is not a proof, but a pointer to two consumer losses totaling $1,065,417,480 for FTC Docket 9341 discovery. Findings from this analyst are passed on by FTC to Intel, for Intel rebuttal. So what has FTC learned from Intel’s document production in rebuttal?
Consumer Recovery Time frame
$3.785 billion consumer monopoly price recovery is calculated on Intel product runs occurring between January 1, 1999 and July 2004. The analysis is undergoing a third evolution of refinement.
For FTC Docket 9341 review period, additionally, six years of Intel production estimates are currently missing from this specific analysis. Both the existing and remaining
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production and price data require FTC and or DOJ discovery from Intel for validation as a monopoly proof. RICO; specifically cross enterprise, cross profession network driven markets rigging is proven regardless. Proven on structure and directly witnessed conduct.
Industrial Subset 3
Industrial subset is estimated principally on Micro Design Resource estimates of Intel product short runs; estimated quarterly quantities at Intel stated price in period, cross referred against Intel average total cost, average fixed cost, variable cost determined on Intel financials. Finally, the marginal cost estimate to produce a single microprocessor from economic analysis cross checked with variable cost from Intel financials.
Classic economics analysis is used because classic era rules appear to offer the foundation of Intel’s economic technology until Pentium M 2005 product segmentation phase. In decomposing Intel systems structure academic theory of the 1930s through 1970s is insightful. This key for decomposing Intel systems theory appears established using similar texts that Messrs. Moore, Grove, Barrett and other executives might have been taught, as the syllabus of FTC primary and secondary case research documents[2]. Although practiced on a slightly more sophisticated level then solely running the neighborhood breakfast shop or determining the customer demand for egg dishes. Intel system mechanics appear to be designed by engineers and system theorists.
Economic Calculations
Five primary calculations are used in Intel economic analysis decomposing a cost based quantitative mathematical model relied on by inside traders for playing the Intel stock price. Price multiplied by quantities to determine quarterly revenue and change in revenue. Change in price and quantities to determine price elasticity. For a cost based model, change in revenue (suspect as change in total cost), divided by change in total quantity for estimating marginal cost average. The result can correlate with variable cost cross check from financials. Change in revenue (suspect as cost) divided by change in quantity suspect at Marginal Revenue approximation. Actually an indicator of Intel product stocks acceleration, the calculation can be compared against the cross check MR = P*(1-1/Elasticity).
One of the At and < Fixed Cost Examples -
Below find example of Pentium 3 Celeron Mobile Value priced at and below fixed cost. On revenue of $3,132,065,000 estimates industrial monopolization of $2,780,853,050 where price is less than Average Fixed Cost of $136; and $351,211,950 industrial monopolization where price is at or less than Average Variable Cost of $117 and suspect below Marginal
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Cost at production end of run. Intel Inside tied charge back consumer recovery value associated with this Intel mobile short run is $187,923,900.
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Camp Marketing Consultancy |
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Celeron Pentium III Mobile Value Copper mine 128 L2 450 MHz to 933 MHz @ 0.18 micron, 106 mm sq 1q 2000 – 4q 2002 MDR Estimate Quantity by Speed Analyst Average Weighted Price on Intel Price & Speed Split
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$25 |
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50 |
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75 |
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100 |
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125 |
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150 |
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175 |
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200 |
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225 |
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250 |
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275 |
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$300 |
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AFC = $136 |
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ATC = $253 |
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Mfg Cost @ $52 - $35 |
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550 500 450 |
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600 550 500 450 |
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650 600 550 500 |
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700 650 600 550 500 |
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750 733 700 650 600
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800 750 733 700 650 600 |
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866 850 800 750 733 700 650
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900 866 850 800 750 700 733 700
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933 900 866 850 800 750 700 733 700
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PIII-S Tualatin |
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Mike Bruzzone, Camp Marketing Consultancy Revised Check 6/20/2010 |
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AWP = $121 AVC = $117 |
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M |
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Quantities, by quarter, 12 quarters in 9341 Time Frame |
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$119 |
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$126 |
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$132 |
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$119 |
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$96 |
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É |
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▲TR per Quarter or MR |
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Qty |
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TR |
Calculated primarily on average product price, industrial monopolization is currently estimated at $43.827 billion for the period January 1, 1999 through June 2004. That is one half of the time period under review in Docket 9341. Industrial recovery values principally include Intel product price, near and below average fixed cost, with a variable cost check. Approximately 28%, or $9.781 billion of the total sum, has been estimated on classic economics, economic calculations and financials too be priced less then the marginal cost for Intel to produce that single unit of production. With evolution of the economic calculation to average weighted price on product speed grade splits, industrial monopoly recoverable is expected to be slightly less then stated here. Coincidently this average price, verse average weighted price trade off, may cause some consumer recovery values to rise.
Accounting vs. Economics
This analyst takes the accounting view that Intel marginal cost to produce one unit is the Average Total Cost of that unit. An industrial economist might argue that marginal cost is no less then Average Fixed Cost per unit. Some have proposed marginal cost as the
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Manufacturing cost for one unit which this analyst rejects; although economic analysis suggests. Where Intel price is at or less than marginal cost defined here as fixed cost, or variable cost, that portion of the production run is subject to Areeda Turner review.
However, Intel intent to monopolize appears proved on 9th Circuit Court filter regardless. Showing monopolization; economically & structurally, occurring across consecutive Intel microprocessor production short runs. This analyst has assessed 23 production short runs.
Quantitative Model confirms RICO proof of Intel Insider stock trading.
In analyzing the economics of Intel production short runs for FTC, this analyst has been decomposing the components of an Intel insider stock trading tool. Recomposed components of the tool yield a rudimentary Intel economics simulation.
The tool requires one quasi public, and one public signal, that when filtered together enable the inside trader to estimate changes in Intel’s revenue and margin out into the future. And can specifically be used to estimate Intel profit margin ahead into future time; for playing the stock price, INTC.
Input to perform the necessary economics calculations to play the stock are supplied by the quasi public signal from Micro Design Resource; which are Intel quarterly microprocessor quantities estimated two years into future time. The public signal is Intel change in price notices which are widely publicized in business, finance and trade news sources; including New York Times, PC Week, CNET, Register and other hard copy and web publications. Who knew they were more then simply Intel price announcements?
Intel change in price notices have traditionally been released to the public audience, trade and Intel supply channels 90 days ahead of the actual price changes taking affect. This lag effect gives the Intel Inside Stock trader a 90 day window for recalculating change in Intel revenues and profit margins for playing the stock. And can be accomplished simply
with two inputs; price change calculated against Micro Design Resource quantities estimated into future time.
Typically the inside trader could project Intel revenue and margin value 3 months ahead on Intel advance notice of changes in microprocessor prices. Periodically, public notice of Intel price change has been shorter then 3 months. And multiple price changes have occurred within some Intel quarterly production periods under analysis.
Mr. Gwennap who is principle analyst and proprietor of Micro Design Resource (MDR), raised concerns on his perceived misuse of MDR Intel production estimates, by the investment banking community, to this analyst in 2001. Mr. Gwennap provided the Intel production estimates on which this analyst has decomposed the Quanda against Intel 1,000 piece stated price. Resulting in a tool for retrospectively playing Intel Corporation stock price and for calculating monopoly costs and consumer harms based on change in quarterly revenue and margin potential.
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Several questions exist concerning future time Micro Design Resource estimate of Intel microprocessor quantities on wafer dice estimates. First are they purely an MDR estimate of Intel production capability? Second, might estimates be Intel’s actual production forecast passed to MDR for industry publication? Third, if purely MDR estimates were quantities confirmed by Intel end of quarter, as quarterly PC shipments are confirmed by PC Companies to PC industry analysts? Fourth, how accurate are the MDR estimates? Fifth, and the wild card, are estimates fictitious designed by late 1990’s MDR owner, the Bill Ziff Davis Publishing Company, purely to lead and pump the stock price?
Micro Design Resource estimates of Intel production are widely accepted as accurate. Given the best price projection and economic tools Intel Inside traders can calculate change in Intel revenue and margin, by microprocessor product line, and from the outcome play the stock on quarterly financial outcomes up to two years into the future. I have no doubt all major trading houses knew of the Quanda, including Robertson Stephens, and were running this software simulation on Intel Xeon servers performing similar exchange calculations and financial simulations.
Noteworthy the Quanda is also how Media Sales Agents calculated their future revenue flows from Intel Network. Retrospectively, the Quanda enables the Media Sales Agent to calculate their Intel Inside charge back flows from Intel Combine up to two years into the future. On this cash flow projection media based their Intel product production plan; the amount of Intel dedicated page space, Dealer PC product reviews and sales coverage.
The Quanda can also be used to estimate advance PC company revenues and margins; specifically Intel Dealers; Dell, Gateway, others by extending the simulations inputs to two additional public signals. Those signals are sales space invested by Ziff Davis, IDG and other publications on PC product coverage and review pages.
Media Sales Agents push computer brand models known to carry the highest value Intel Inside charge backs. Media focuses on skimming these Intel and Dealer values through their focused PC review coverage. Intel product allocation to Dealers can be estimated by the specific weight of PC Company brand models that Media Agents push onto consumers in real time.
Two metrics can be used for determining which Dealer’s computer brand models Media Sales Agents are pushing onto consumers for their Intel ‘tied charge’ kick back. The best metric here shown in PC World analysis, below, is purely the page space allocated to any one Dealer’s PC brand model product reviews. With this method there is no subjectivity associated with Editorial Accolade, the sole determinants being Media Sales Agent cost of page space and kick back revenues on this investment in Intel Dealership.
The second metric is more subjective, harder to prove as a stand alone indicator, potentially much more evil from the standpoint of an affront to journalism. That is when the Media Sales Agent begins skewing Editor’s Choice and similar Product Awards to
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Dealer’s brand models. This tactic is relied upon for accelerated sales and major capture of the Intel tied charge back. Note that Media Sales Agents compete with one another for total kick back values associated from anyone Intel production short run. For the purpose of this analysis that charge back value is always 3% (times 2; one half representing Intel kick back, the other is Dealer half representing charge back trigger) calculated against Intel total revenues from anyone production short run.
Method 1 on Media Agent Space Dedicated to Dealer Sales
Following exhibit shows ‘poker.com’ style statistical analysis for publisher computer brand review support revealing Intel dealer channels. That analysis looks upward in the value chain through the monetary exchange lens of media sales agents, through Intel microprocessor broker and computer dealers, directly into Intel.
Statistical Analysis of Intel intra platform product routing by Dealer computer brand model in International Data Group’s PC World Top PC Sales Racket follows.
Note: Post rebated fee year 2008 level market high = 233%; market average = 166%.
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Intel PC Dealer |
3/2005 - 12/2008 |
1999-2/2005 |
1987-1998 |
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A |
113.00% |
265.00% |
0.00% |
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B |
170.00% |
111.00% |
136.00% |
|
C |
187.00% |
60.30% |
0.00% |
|
D |
28.00% |
0.00% |
0.00% |
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Compaq |
65.00% |
364.00% |
379.00% |
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F |
195.00% |
96.50% |
53.10% |
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Dell |
504.00% |
1163.00% |
2071.50% |
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H |
170.00% |
91.70% |
0.00% |
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Gateway |
178.00% |
765.00% |
1024.00% |
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HP |
626.00% |
412.00% |
113.80% |
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IBM |
170.00% |
386.00% |
257.00% |
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Lenovo |
382.00% |
0.00% |
0.00% |
|
M |
203.00% |
345.00% |
220.00% |
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Micron |
108.00% |
393.00% |
918.00% |
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O |
187.00% |
292.00% |
98.60% |
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P |
0.00% |
200.00% |
386.00% |
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Q |
113.00% |
118.00% |
0.00% |
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Toshiba |
195.00% |
234.00% |
493.00% |
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S |
113.00% |
7.20% |
0.00% |
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Others |
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Statistical analysis reveals some Intel dealers and publishing agents are cheating their organic probabilities. That is by placing more of certain Intel Inside branded PCs for sale given their known high level of commission values waiting media release from dealer
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rebate fee pools accumulating for Intel Insider charge back. The Media Agent’s sales reward is paid for moving computer brand models to consumer from stocks and discharging their effect on the supply system in exchange for the charge back value.
Through this function Media Sales Agent register Intel product movement from Dealer stocks reporting back to Intel for their ‘metered’ sales reward; the commission.
Method 2 on Media Agent Percentage of Total Editor’s Choice Awards
Statistical Analysis of Editor’s Choice skew on intra platform product routing by Dealer computer brand model, April 1987 through August 2008, in the Bill Ziff Davis Cartel, PC Magazine, PC Sales Racket:
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Descriptive Statistics Relative Frequency of Winning Editors Choice Across 252 Issues Among 63 Total Winners
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|
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Mean |
0.02941547 |
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Standard Error |
0.007338245 |
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Median |
0.003968254 |
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Mode |
0.003968254 |
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Standard Deviation |
0.058245512 |
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Sample Variance |
0.00339254 |
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Kurtosis |
17.3494465 |
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Skewness |
3.840748914 |
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Range |
0.349206349 |
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Minimum (1) |
0.003968254 |
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Maximum (Dell) |
0.353174603 |
|
Sum |
1.853174603 |
|
Unique Editors Choice Winners in 252 Issues |
63 |
|
Frequency Editors Choice Wins 252 Issues Among 63 Winners PC MAGAZINE 1987 - 2008 |
|
|
|
Classic Probability |
Frequency Win 252 Issues, 63 Winners |
|
|
Dell w/89 = 19% |
0.353174603 |
1200.64% |
|
HP w/61 = 13% |
0.242063492 |
822.91% |
|
IBM w35 = 7% |
0.138888889 |
472.16% |
|
Toshiba w/28 = 6% ( incomplete notebook sample) |
0.111111111 |
377.73% |
|
Velocity w/23 = 5% |
0.091269841 |
310.28% |
|
Apple w/22 = 4.7% |
0.087301587 |
296.79% |
|
Gateway w/21 = 4.5% |
0.083333333 |
283.30% |
|
Falcon w/18 = 3.8% |
0.071428571 |
242.83% |
Please consider PC Dealer Analysis using Method 1; for PC Magazine; PC Company comparison solely on product review space, allocated to 48 companies across 104 issues. Frequency of product review space placement mean average is 0.02083. Time Period is February 2000 through August 2008.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
|
|
|
|
|
|
|
|
Space Allocation over mean average of 0.02083 |
Weight |
Placements |
% Total |
% AMD Stated |
|
|
Dell |
3.3846 |
16,246.08% |
352 |
15.93% |
3.13% |
|
HP |
3.1442 |
15,092.16% |
327 |
14.80% |
16.21% |
|
Gateway |
2.1057 |
10,107.36% |
219 |
9.91% |
5.02% |
|
Sony |
1.4807 |
7,107.36% |
154 |
6.97% |
0.00% |
|
Apple |
1.4038 |
6,738.24% |
146 |
6.61% |
0.00% |
|
Toshiba |
1.3557 |
6,507.36% |
141 |
6.38% |
0.00% |
|
Lenovo/IBM |
1.2019 |
6,461.28% |
125 |
5.65% |
4.80% |
|
Fujitsu |
0.7403 |
3,553.44% |
77 |
3.49% |
0.00% |
|
Velocity |
0.6923 |
3,323.04% |
72 |
3.26% |
27.78% |
|
Falcon |
0.6442 |
3,092.16% |
67 |
3.03% |
22.39% |
|
eMachines |
0.5192 |
2,492.16% |
54 |
2.44% |
46.30% |
|
Acer |
0.4711 |
2,261.28% |
49 |
2.22% |
12.24% |
|
Alienware |
0.3653 |
1,753.44% |
38 |
1.72% |
15.79% |
|
Polywell |
0.3365 |
1,615.20% |
35 |
1.58% |
42.86% |
|
Asus |
0.3269 |
1,569.12% |
34 |
1.54% |
0.00% |
|
Voodoo |
0.2403 |
1,153.44% |
25 |
1.13% |
60.00% |
Above, comparing skew on Editors Choice to space allocation reveals Intel Dealing Group, tied by the charge back, to PC Magazine Media Sales Agent channel.
Findings from Decomposition of Intel Economics
Decomposing components of the Intel economics simulation has revealed a number of hidden aspects concerning Intel’s business, the PC Dealing Combination and Media Cartels who are and have been Intel’s primary business partners.
First, Intel’s primary business is not the microprocessor or compute platform business. Intel’s primary business is selling product routes that PC Companies bid on and
Media Sales Agent’s determine their future case flows on. Obviously this form of racketeering restrains inter brand computer and PC platform, and x86 microprocessor price competition, and is a per se illegal under the Sherman Act, Clayton Act, Title 48 pursuant to GSA procurement including the 1986 anti kick back Act.
The power of Intel to fix the price of the product which it manufacturers with a tied charge back, which broker dealers and agents scramble to benefit from, and to whom all have been and are actual or potential competitors is a powerful inducement to abandon competition. Active and vigorous competition then tends to be impaired, not from any preference of the end buyer for an Intel microprocessor based computer, but from the preference of Intel broker dealers and agents to accrue the benefits of a tied rebate matched by that broker dealer, and charged back to Intel, for payment to media agents on every future computer sale.
This analyst believes on the weight of findings, FTC Docket 9341 First Amended Complaint will add forms of Intel price fixing to government current claims. Precariously,
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
some individuals within FTC might also now being threatened by Intel Network; to bury the case and its anticipated affirmative outcomes. When Intel Network has a history of
hooligans sent in to remind competitors how to compete, and for this Docket 9341 case, the post FTC employment and Bar potentials of either competing, or not competing with Intel Network.
Second, the Quanda is relied upon by Intel PC Dealers to determine which Intel microprocessor product routes to bid on given Intel searching for highest price taker. Savvy procurement can use the Quanda to simulate the optimum microprocessor routes to
jockey purchases given their revenue, margin potential and Intel retrospective sales rewards including the sales system tying charge back value.
Third, horizontal competitors operating under a Cournet economic assumption rely on the Quanda for determining their Nash equilibrium; which isn’t under Intel methods of selling at and less then Average Fixed Cost. Nor does an oligopoly welfare space exist in many Intel microprocessor production short runs.
Fourth, Intel media sales agents including the Bill Ziff Davis Cartel used the model to calculate their revenue and sales commissions from Intel and PC Dealers; retrospectively, up to two years in advance. Media knows values misrepresented in Intel and Dealer financials as Intel Inside marketing expense are 100% recoverable by them; as a sales commission for pushing computers onto consumers for the Intel Inside tied kickback. As they did very successfully for 15 years until the model disintegrated under Intel production constraints and a distribution channel reconfiguration. Approximately 2005/6 Intel Inside tied charge back morphs into the first Dollar discount scheme[3]. First dollar discount values also need to be calculated.
The $22.657 billion Intel Insides tied charge back value from January 1, 1999 through program end in 2006/7 remains fully recoverable by FTC. Intel Inside tied charge back is addressed within Docket 9341 claims, discounts & rebates, for whom this analyst is the FTC documented original source.
By FTC record this analyst is also believed original source concerning some Intel benchmark rigging claims addressed in Docket 9341. Where this analyst was previously responsible for designing patches that worked around some rigged benchmark’s in efforts with PC User Groups across the country; as a Cyrix, NexGen, AMD and IDT Centaur employee or consultant. This includes Docket 9288 field reports concerning Intel run time benchmark rig and PC User group work around.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
FTC in Intel Settlement Talks; before July 22?
Please be advised this analyst is opposed to Intel closed door settlement with FTC on or before July 22; transparency being at issue. Commissioners and discovery team know RICO, Sherman Act Section 1 and Section 2 per se violations are documented. This analyst encourages the September hearing proceed accordingly for full disclosure, full remedies, consumer recovery which is a core value of the FTC’s charter.
Advantageously and for hearing efficiency, all Section 2 Rule of Reason claims lacking specific per se condemnation precedent, can be reviewed between the Section 1 and RICO proofs, without fear of FTC 9341 overall case loss. Including waste of Federal financial and manpower resource, further, that FCA has already been won on weight of evidence and is itself capable of recovering a portion, if not all, FTC 9341 litigation costs.
This analyst believes it important that every American know how to spot competition espionage occurring in the work place in real time, how to report in real time, how to resolve in real time and not over 18 year’s time as in my case. In this continuing case of Intel monopoly analysis, meant for FTC and DOJ discovery, leadership, error correction, law augments, inter Nation competition policy evolution, Intel Network, system and structural improvement, RICO and competition remedies and consumer recoveries.
In addition financial recovery of the economic damages for all targets harmed and pushed under by Intel Network, including in the Docket 9288 case obstruction are required under Intel’s DOJ antitrust compliance obligations. That is for Intel and Network executive amnesty and or immunity from maximum antitrust and RICO damages. This would seem to include those associated with FTC Docket 9341.
I’d presume Intel is participating in reversing the frame and fraud associated with Docket 9288 obstruction. Alternatively in the face of a known obstruction in the administration of justice which includes witness tampering, fraudulent construction and white wash, the Docket 9341 clock could be reset to June 11, 1991. June 11, 1991 is the inception of the Intel Insider scheme enabling a complete Intel monopoly consumer recovery.
Pursuant to Docket 9341, I am concerned that $72 billion dollars in monopolization have been calculated. And that the worldwide consumer recoverable from Intel tied charge back, and monopoly price of up to $42 billion, will be left un-recovered or left on the negotiating table in any FTC closed door Docket 9341 settlement.
Our knowing this fact of the consumer recoverable, legitimately, consumers are due their return from Intel and Network members. The history of Intel class actions suggests any privately litigated consumer class action will be blown or settled on disproportionate values too harms. This attorney opinion is supported by historical evaluation, including attorneys who would take the FCA, if not for their knowledge of the history of Intel market rigging, the various corporate political, time trap and litigation hurdles.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
Intel Network adverse litigation for year’s has been sand bagged, blown, thrown and settled on minor causes with slim remedies and minor financial recovery in relation to harms. Here our countries history of private antitrust litigation ends until attorneys who would risk toughest corporate, political, legal and judicial hurdles resolves itself. FTC and DOJ can restart that tradition of private antitrust litigation with full Intel Network disclosures, monopoly encompassing remedies and recoveries, where world wide consumer recoveries are due consumers including the Federal government.
Bursting boilers and the Federal Power, Garrison Dam Disaster and the Federal Power, Bar Pilots and the Federal Power, Finance & Securities Disaster and Federal Power, broken oil well valves and the Federal Power, broken regulatory & the Federal Power; fixing broken Intel and the Federal Power, transparently, offers the potential for one of Intel’s greatest legacies. A cornerstone on which willing members of Bar and Bench, and corporate entities, will see and take action regulation seriously. Lacking Bar and Bench free from corporate political network control, I fear broken regulatory will remain. A functional regulatory, Bar & Bench, are required first lines of monopoly and rackets error detection and correction.
Pursuant to FCA, I will be requesting Congress and/or President Obama please assign a Federal attorney for qui tam representation. A case to whom I am recognized Relator and hold the U.S. Attorney recovery reward letter, having been steward for many years before
and following my official Relator status. No legitimate private attorney will take the case in the face of the market rig.
Fifth, finance and investment bankers use Quanda model, with price projection tools, to model Intel revenue and margins; like media retrospectively, to play the stock up to two years in advance.
Sixth, Intel inside individual stock traders can do the same thing as I’ve demonstrated to FTC and U.S. DOJ.
Seventh, the Intel Quanda on mass weight of use, retrospectively, extended Intel’s x86 and PC market rigs to the NASDAQ; including in relation to other exchanges. Think about it, Intel Insider ability too play the stock of Intel and PC Dealers up to two years in advance is an extreme catalyst to rig not only individual stock prices, but the NASDAQ index itself. The Quanda was used to rig markets; Intel had DOJ 1st report responsibility.
Eight, combination and cartel proofs exist throughout Intel economic and system structural proofs. Structural proofs are easily deciphered from their component patterns and prove intent to monopolize per se. No other conduct proofs are required.
Nine, U.S. Department of Justice and Federal Trade Commission are well aware of the Section 1 per se condemnations, Section 2 per se intent, RICO, Quanda and its reliance by Intel Network as one of their many market rigging tools.
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
|
RICO PROOFS |
|
Sherman Act 1 & 2 per se Condemnations |
|
All Other Section 2 Evaluation |
|
Section 5 Umbrella under which per se violations are currently masked |
Ten, for FTC there is no risk of Docket 9341 case loss where all Section 2 Rule of Reason claims concerning access to Intel component taper, Intel benchmark rigging, false statements to Federal procurement by Intel, Dealers and Agents concealing fraudulent and monopoly costs assessed on the Federal Government computer payment claims. All can be heard within the bracket; Section 1 structure, Section 2 intent and RICO proofs. Please consider one of multiple proofs below:
In the RICO proof below, find partial classic Intel Xeon Tanner and Xeon Copper mine economic analysis. Playing signaling revealed by the Quanda, savvy PC Dealers were informed to stick with the quasi static equilibrium and back eddy offered by Xeon Tanner, and to avoid being washed over the falls that is Xeon Cascades.
|
Camp Marketing Consultancy |
|
$250 |
|
500 |
|
1000 |
|
1250 |
|
1500 |
|
1750 |
|
Mike Bruzzone, Camp Marketing Consultancy FTC 5/18/2010 |
|
750 |
|
2000 |
|
2250 |
|
2500 |
|
2750 |
|
3000 |
|
3250 |
|
$3500 |
|
AFC = $145 |
|
ATC = $271 |
|
Mfg Cost = $114* |
|
$2283 |
|
$585 |
|
$1915 |
|
$1764 |
|
$1444 |
|
|
|
500 2MB 500 1MB 550 512 500 512 |
|
500 2MB 500 1MB 733 256 667 256 600 256 550 512 |
|
500 2MB 500 1MB 933 256 866 256 850 256 800 256 733 256 667 256 650 256 600 256 550 512 550 256 |
|
500 2MB 700 2MB 700 1MB 1 GHZ 512 933 256 866 256 800 256 733 256
|
|
$1053 |
|
900 2MB 700 2MB 700 1MB 1 GHZ 512 933 256 |
|
$1377 |
|
900 2MB 700 2MB 700 1MB |
|
$1526 |
|
900 2MB 700 2MB 700 1MB 1 GHZ 512 |
|
$2201 |
|
500 2MB 500 1MB 500 512 |
|
500 2MB 500 1MB 550 512 500 512 |
|
$747 |
|
500 2MB 500 1MB 866 256 850 256 800 256 733 256 667 256 650 256 600 256 550 512 550 256 |
|
TANNER |
|
I |
|
P |
|
P3 700 MHz X 2 MB 4 & 8 Way 6/1/2000 |
|
P3 700 MHz X 1 MB 4 & 8 Way 6/1/2000 |
|
P3 900 MHz X 2 MB 4 & 8 Way 12/18/2000 |
|
AP T&C w/large Cache Versions |
|
P3 1 GHz X 256K 2 & 4 Way 9/2000 |
|
P3 733 MHz X 256K 2 & 4 Way 10/10/1999 |
|
P3 866 MHz X 256K 2 & 4 Way 1/2000 |
|
P3 667 MHz X 256K 2 & 4 Way 10/10/1999 |
|
P3 600 MHz X 256K 2 & 4 Way 10/10/1999 |
|
P3 850 MHz X 256K 2 & 4 Way 1/2000 |
|
P3 800 MHz X 256K 2 & 4 Way 1/2000 |
|
P3 733 MHz X 256K 2 & 4 Way 1/2000 |
|
P3 933 MHz X 256K 2 & 4 Way 5/28/2000 |
|
P3 750 MHz X 256K 2 & 4 Way 1/2000 |
|
LOTS of SLUDGE |
|
AMD Response is Opteron Code Names: Sledge hammer & Claw hammer
RICO PROOF INTENT TO MONOPOLIZE POINTER |
|
*Note: MDR stated Mfg Cost well understated for this eon variant. |
|
C |
|
Intel Xeon Infra marginal Production Katmai .25 & Copper mine .18 micron Xeon variant No wonder Intel code name Tanner No wonder Intel code name Cascades |
|
Quantities |
|
by quarter, 10 quarters, 9341 Time Frame, q1 99 – q3 01 |
|
P R I C E |
SEC, U.S. Senate, Congressional Committees, State Attorney Generals, U.S. Attorneys
Cascades is the Intel desktop microprocessor Copper mine 256, repackaged as a high performance Xeon server product at monopoly price premium and for dumping onto AMD. Xeon Cascades was not a high performance product and by June 2000 main board suppliers serving the broker system market, had rejected it, causing Intel to cancel its retail boxed version of the Cascade product line. Cascade’s was then left to sell through Intel primary Dealer channels.
Please note that AMD Opteron code names; Sledge Hammer and Claw Hammer, follow in response to Intel Network notice of Tanner signaling and pending Cascade predatory product dumping. Dumping is relied on by Intel a lot. Strategically to stop current competitive product flows in channels or to make it unprofitable for competitors to enter that product category.
In Conclusion
Intel Network case matters are about insuring innovation production short run to short run. Preserving ability to innovate based on examples that demonstrate Intel methods of creative destruction can be very destructive economically, structurally, holistically and socially. Intel Network RICO is proven. Section 1 and Section 2 case proofs wait to be discovered by FTC or sit delivered at FTC and DOJ waiting hearing stage.
I look forward to open Intel hearings for a transparency that will educate every American on forms of domestic economic terrorism caused by illegal monopolization, combinations, cartels, frauds, theft, deceit and the cover ups that have stymied these Intel Network case matters from their complete remedies and resolutions for over a decade.
Freedom to compete in an open environment free from the undermining effects of chaotic forces is our future. A difficult task where our successful completion can become one of democratic capitalism’s greatest triumphs.
Respectfully Submitted
Mike Bruzzone
Camp Marketing
FBI Original Source of Intel Network RICO; 1996
FTC Invited field reporter Docket 9288, 1998-2000
CDOJ and NYDOJ first to report; 1998
CDOJ lettered to work report; Intel Section 1 Framework; 2000 –
SEC Notice; 2007
U.S. Attorney NCD recognized FCA Relator; 2008
FTC voluntary analyst Docket 9341; under Labor Code 3363.5; 2009
October 9, 2008
To: Chairman Kovacic, Commissioners Jones Harbour, Leibowitz, Rosch
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
cc: State Attorney Generals, United States Senate, Congressional Committees
Fm: Mike Bruzzone
6000 Park Avenue
Richmond, California, USA 94805
Re: Math Correction; Recoverable Intel Inside fee per computer is $13.35
Frameworks & filters supporting Intel Corp. case movement to hearing stage.
Chairman Kovacic & Commissioner Harbour, Leibowitz, Rosch:
This correspondence notifies the National Association of Attorney Generals of the math error I made this last May calculating the Intel Inside fee recoverable for consumers. Due to the trans-position of a single decimal place my thesis public summary placed the Intel Inside accrual for Intel x86 microprocessor based ‘intra platform’ desktop computers at $0.70 to $0.97 each. Note that amount is not correct. Correct amounts are displayed be-low and between 1993 and 2006 average $13.35 per Intel microprocessor (MPU) routed by and between Intel contractually enabled horizontal dealing combinations in inter state commerce and inter nation trade.
|
Intel Inside Rebated-Fee Accruals
|
|
|
|
|
|||
|
Year |
Annual Coop $ |
▲ Coop Yr /Yr |
% ▲ Coop |
Annual Sales Rev |
Coop % Rev** |
MPU Shipments Yr |
$Coop/MPU |
|
1993 |
$325,000,000 |
|
|
$8,872,000,000 |
0.0366 |
33,680,000 |
$9.65 |
|
1994 |
$459,000,000 |
$134,000,000 |
29.19% |
$11,521,000,000 |
0.0398 |
44,700,000 |
$10.27 |
|
1995 |
$654,000,000 |
$195,000,000 |
29.82% |
$16,202,000,000 |
0.0404 |
54,870,000 |
$11.92 |
|
1996 |
$974,000,000 |
$320,000,000 |
32.85% |
$20,847,000,000 |
0.0467 |
70,790,000 |
$13.76 |
|
1997 |
$1,200,000,000 |
$226,000,000 |
18.83% |
$25,070,000,000 |
0.0479 |
85,330,000 |
$14.06 |
|
1998 |
$1,300,000,000 |
$100,000,000 |
7.69% |
$26,273,000,000 |
0.0495 |
90,960,000 |
$14.29 |
|
1999 |
$1,700,000,000 |
$400,000,000 |
23.53% |
$29,389,000,000 |
0.0578 |
115,800,000 |
$14.68 |
|
2000 |
$2,000,000,000 |
$300,000,000 |
15.00% |
$33,726,000,000 |
0.0593 |
139,500,000 |
$14.34 |
|
2001 |
$1,600,000,000 |
-$400,000,000 |
-25.00% |
$26,539,000,000 |
0.0603 |
154,300,000 |
$10.37 |
|
2002 |
$1,700,000,000 |
$100,000,000 |
5.88% |
$26,764,000,000 |
0.0635 |
167,500,000 |
$10.15 |
|
2003 |
$1,800,000,000 |
$100,000,000 |
5.56% |
$30,141,000,000 |
0.0597 |
170,000,000 |
$10.59 |
|
2004 |
$2,100,000,000 |
$300,000,000 |
14.29% |
$34,209,000,000 |
0.0614 |
175,000,000 |
$12.00 |
|
2005 |
$2,600,000,000 |
$500,000,000 |
19.23% |
$38,826,000,000 |
0.0670 |
177,000,000 |
$14.69 |
|
2006 |
$2,300,000,000 |
-$300,000,000 |
-13.04% |
$35,382,000,000 |
0.0650 |
180,000,000 |
$12.78 |
|
2007 |
|
|
|
|
|
185,000,000 |
|
|
2008 |
|
|
|
|
|
190,000,000 |
|
|
2009 |
|
|
|
|
|
|
|
|
Total |
$20,712,000,000 |
|
|
$363,761,000,000 |
0.0581 |
2,034,430,000 |
$13.35*** |
** Note intent to monopolize as percentage increase over time.
* Adds 2007 Annual Coop to original October 2, 2008 NAAG submission
*** Note: Add microprocessor broker dealer matching contribution recovery value = $26.70 per Intel PC
*** Note: Add microprocessor broker dealer matching contribution recovery value = $25.50 per Intel PC
United States Senate, Congressional Committee Members pg 2
Estimation for State wide consumer recovery multiplies $12.25 for each Intel micropro-cessor sold within a computers central processing unit, within your State, beginning 1993 through to today. To estimate a maximum recovery divide by 2, or one half of all systems sold within your State. To estimate a minimum recovery divide by 4, or ¼ of all systems sold within your State. To refine State recovery utilize the Intel annual rebated-fee accru-als table located above.
This method establishes a consumer recovery range for the Intel Inside transport fee tied to a single Intel microprocessor embedded into the consumer sales price of a single com-puter’s central processing unit (CPU). One microprocessor per CPU equals $12.25; two microprocessors per CPU is $24.50; four microprocessors per CPU = $49.00 and so on. Note that this division should really account for the number of Intel x86 microprocessors (MPU) sold in your State, as some Intel computers contain more than one MPU per CPU. Simple division by the number of Intel based computers (CPU) sold within your State, re-gardless of the number of Intel microprocessors (MPU) they contain, is meant to simplify the consumer recovery estimation.
This Intel Inside commission fee pays PC and other media to sell specific Intel Dealer PC brand models that are tied to the majority of Intel’s commercial microprocessor transport fund. This fund is accrued by Intel intra platform Computer Dealers purchasing Intel x86 microprocessors in excess of their associated computer brand model’s end user sales de-mand; solely to strip & mass the transport incentive. Stripping fees accrued from overage creates the weighted attractor which both ties and enlists the media to sell specific Intel Dealer computer brand models, from which the majority of the transport fund was obtain-ed, regardless of whether or not any specific computer contains the Intel microprocessor rebate from which the fee was massed. That is because, frequently, any specific comput-er’s microprocessor transport charge was in fact skimmed from another Intel microproces-sor purchased by that computer Dealer as overage and resold to another microprocessor broker or PC system integrator sans the fee. This act of Intel intra platform PC Dealers over purchasing to mass the media transport incentive from the total available funds from anyone Intel microprocessor production run is meant to artificially weight and build Dealer transport pools, administered and paid out by Intel, between Intel Computer Dealers tied and routed through their Media Sales Channel counterparts. In this three step distribution structure juxtaposing dealing combinations, Intel Computer Dealers represent a bridge channel entry point and Intel Media Sales outlets represent the channel exit point.
Not all media commission fees massed from anyone Intel microprocessor production run pass through with computer brand model sales associated with that MPU production run. A lag effect occurs as media clears fee pools secured in excess of anyone Computer Deal-er’s end system sales. As an example microprocessor fees stripped from Pentium III over-age in excess of associated dealer PIII computer sales may not be cleared by media until
their Pentium 4 sales push, which now focuses on that same PC Dealer’s Pentium 4 brand models based on the effect from prior products. This lag effect is continuous across Pen-
tium, Pentium II, Pentium III, Pentium 4, Core Duo; & Quad Core system sales? That is
United States Senate, Congressional Committee Members pg 3
why the Intel Inside scheme limits computers containing competitive microprocessors;
substitutes & replacements in real time and in future time. Whether AMD, NexGen, Cyrix, National, IDT/Centaur, Rise, Transmeta, VIA, and in x86 Windows platform replacment market DEC, MIPS, Motorola, and in the enterprise replacement platform markets Sun, IBM and Hewlett Packard. Limiting structure this way restrains competitive innovation’s ability to grow in size in both the hardware platform and operating system markets.
Structurally, establishing the consumer recovery range dividing by 2 and 4, breaks out computers which sold through with the rebate as a traditional cooperative advertising al-lowance, verse all other systems, sold through by media based on the skewed weight of fee pools secured from overage as a transport incentive. Prior correspondences describe this system structure which is the Intel Inside rebate-fee scheme juxtaposing horizontal dealing combinations; based on explicit contract in the service of Intel Corporation. In essence a market allocation scheme in which media throttles specific computer brand model sales to accelerate the clearing of skewed and weighted Dealer fee pools. Strategically this include-es media organizing themselves as domestic cartel’s of coordinated sister publications with interlocking executive directorate, to broaden their skim for the fee.
Using this method for determining consumer recovery; based on Intel financials, produc-tion estimates, knowledge of the Intel Inside fee metric, computer dealer annual sales vis Intel output, this analyst has estimated consumer recovery of the hidden media transport commission fee at between $5 billion & $11 billion worldwide. At topic currently is the nation who will take judicial leadership in recovery & distribution of consumer recovery.
Analysis for movement to hearing stage:
Following, multiple filters and frameworks are explored for moving the Intel case matters to hearing stage. Filters include review of three prior for moving a Sherman Act true pos- itive to hearing; Easterbrook, Calvani filters & monopoly share. In this correspondence the analyst will expand on monopoly share using 9th Circuit filter considering Intel in input and output markets. Examination will conclude with MCI test, no economic sense & profit sacrifice test, Areeda-Turner below cost price test on Pentium III shrink data set, predator price test, elasticity example, efficient components price & general universal test.
Intel Rebate-Fee Scheme is Section 1 Contract, Combination, Conspiracy to Restrain:
First and foremost Intel competition violations are Sherman Act Section 1 per se condem-nations of law. Subsequently no other tests are required as Intel anticompetitive conduct, systems, structure and environmental factors; such as the transport fee scheme, existence of multiple horizontal dealing combinations and cartels, can be assessed through Section 1 rule of reason on existing case precedence. Over nine competition cases support that the Intel Inside commission fee is, and always has been, illegal.
Section 1 multilateral industry analysis does in fact prove Section 2 unilateral claims. For example, Intel intent to monopolize can be seen in percent increase of the Intel Inside re-
United States Senate, Congressional Committee Members pg 4
bated-fees accrued to horizontal Dealers between 1993 & 2006. Note that increases in the
Intel Inside master fund are on the books monies. There are in addition off the book’s al-legations.
Noteworthy is that this Intel investigation began in 1992 with conduct sightings including knowledge of the Intel Inside scheme; by 1995 seen through repeating pattern in the work
field, in 1996 moved to FBI report and assessment of why the intent, in 1996, 1997, 1998 attracted opposition which built through 2005, in 1999 identified structural attributes first by case precedence, confirmed by systems structures and validated by industrial manage-ment and economics. Since 1999 this case brief has been constantly refined by this anal-yst. I anticipate exponential discoveries from this foundation analysis given government investigative and analytic resource’s much greater than my own.
Section 2 analysis:
Inherently, then, assessment of the Intel case matters through Section 2 methods is dup-licative if not after the fact. However it seemed like a fun exercise and supports this an-alyst’s work identifying what I have described as a matrix combination. An x:y matrix of interconnected cells; a racket, in which Intel x86 intra platform computers are routed ver-tically in inter state commerce and inter nation trade. With the vertical route formations formed by first establishing the cross tying of horizontal dealing combinations. In other words multilateral conduct is required to lead the many unilateral routing effects. These effects between Intel enabled multilateral channel entry and exit points, made it possible to sandwich together 27 adjacent laterals of x86 computer industry, channel and market structure to form the matrix combination. A matrix of cells which limit, guard and accel-erate Intel values moving down channels within the horizontal field effects of many ver-tical bridges established by multilateral entry and exit points. In this sandwich formation security dealers, for one, are caught in the middle of the juxtaposing combination’s trans-port effects.
Frameworks & Filters for movement to hearing stage:
Note the following lenses weighing forward movement to hearing include this analyst’s evolutionary refinements.
Calvani Filter:
1) Is the restraint inherently suspect yes
restrict competition yes
raises price by percent of fee
decreases output increases throughput of
Intel output tied to fee
2) Is there a plausible efficiency justification;
enhanced competition no
reducing cost no
stimulates Intel surplus sell thru w/charge yes
United States Senate, Congressional Committee Members pg 5
Easterbrook Filter:
1) Does defendant hold market power 81.47% x86 CPU market share.
majority of the value stream
2) Does defendant have an incentive; yes
to behave in an anticompetitive way yes
are sanctions necessary to correct yes
conduct remedies yes
structure remedies yes
environment remedies yes
criminal remedies yes
remedies understood in advance of hearing yes
potential methods of over sight regulation yes
3) Competitors use different;
production methods yes and no
distribution methods yes and no
4) Output reduced by challenged parties through time
5) Sales of challenged parties restrained yes
6) Identity of plaintiff; rival the same horizontal competitors
vertical rivals
Inputs Market Power:
1) PC x86 microprocessors Intel 81.47% x86 mkt share
2) industry vertical components taper Intel x86 CPU, embedded memories, chip set, graphics processor, main board, storage sub systems.
3) horizontal dealing combination lateral of MPU resellers
4) supply schedule bottleneck yes
has Intel provided justification for bottleneck no
5) likeness to see (supply schedule) leap frog competition no
likeness to see platform innovation leads demonstrated leadership
by Intel competitors & rivals
6) IP theft of competitive innovations by Intel yes
7) Intel durable monopoly power in inputs market yes
United States Senate, Congressional Committee Members pg 6
Outputs Market Power:
1) PC x86 microprocessors Intel 81.47% x86 mkt share
majority Dealer share
2) vertical distribution routes yes
3) horizontal dealing combinations lateral of PC Dealers trans- porting product tied through 2nd lateral of media sales outlets.
4) bottleneck in commercial channels of distribution yes
has Intel provided justification for bottleneck no
5) Intel durable monopoly power in outputs market yes
Ninth Circuit Filter:
1) relevant market monopoly share yes; 81.47% x86 mkt share
2) significant barriers to entry yes
4) limiting behavior in the relevant market(s) yes
3) barriers preventing competitors from
increasing short run production capacity yes
5) entrant/competitor production capacity to take
business away from incumbent monopolist no
6) entrant/competitor ability to take business
away from incumbent monopolist short run
to short run for long run gain not demonstrated
dysfunctional oligopoly
MCI Test:
1) Intel as a monopolist
Market share 81.47% x86 MPU mkt share
Durable monopolist inputs/output markets yes
Abusive monopolist 9th Circuit Court filter yes
2a) Can others duplicate essential facilities:
input market component taper AMD has near duplicated
output market transport bridge no; Section 1 illegal
United States Senate, Congressional Committee Members pg 7
MCI Test:
2b)Co-op program possible w/legal pass thru yes
for horizontal competitors 18.53% insufficient capacity
competitors defray Intel fee cost w/lower CPU price yes, has been done
competitor parity rebating Intel fee in low CPU price no; lowers competitor total revenue, reduces natural trickle down revenue levels to channels, lacks MPU tie to media layer.
3) Monopolist Combine denies access Network access for Intel
CPUs charged with MPU transport effect before all other natural values.
4) Is the facility available to competitors
component taper within inputs market yes, possibly
distribution bridge within outputs market no
5) Intel engineering reasons for essential facilities;
input market platform component taper platform definition
platform leadership
bundling @ price < rival cost
output market Dealer transport bridge no engineering justification
for these horizontal buttresses
No Economics Sense Test:
Fee as input efficiency justification -
As a banking strategy charging Intel microprocessors with the transport effect causes Intel surplus production to be transferred by Dealers, through channels & into brokerage, forming a bank of Intel microprocessor surplus for resell in excess of what Dealers could have sold through to consumers in their associated computer brand models. Through this distribution arrangement Intel allocated Dealers filter to pool the Intel Inside media trans-port fee for them selves before passing microprocessor overage to others sans the media transport fee incentive. Intel leveled this playing field in 1997, however, the adjustment never made up for massive pools established by primary Intel allocated dealers. This ad-justment adds Intel tertiary computer resellers to the Intel Inside scheme, despite their in-direct status and lack of purchase power. The adjustment coincidently raised barriers for
Intel’s horizontal x86 competitors in a distribution segment that had been traditionally free from Intel’s non-organic ‘extra economic’ restraints.
United States Senate, Congressional Committee Members pg 8
For Intel charging microprocessors with the transport effect in a dominant position causes Intel production to be sold through allocated Computer Dealers by media first & all other x86 microprocessor production to be sold through Dealers second. This leveled model in-creased that effective switching hurdle. An x86 microprocessor competitive parity posi-tion is not available or possible given the illegal nature and extent of the charged effect.
By Intel charging microprocessors with the transport effect media throttles Intel micro-processors to release the charge more quickly. Thus publishers limit page support of x86 microprocessor competitor products to that diminutive player’s restrained market share.
By charging microprocessors with the transport effect, Intel encourages media to displace diminutive Dealer market share and to gravitate their computer sales revenue to Computer Dealers whose product brand models represent ever larger growing transport fee pools.
This transfer act was central to Intel Network’s market allocation scheme misappropriating 2nd tier computer company sales revenues towards first tier, and then whittling down this horizontal combination to its key Dealing agents. There is little that is natural about how x86 computer company market shares played out between 1993 & 2001 and then on out through 2006. Before 2006 market share winners were primarily defined by Intel plus media imposed structure. That is gaming of structure by corporate + media combination.
Fee as output efficiency justification -
None; in light of natural end market demanders for Intel’s well regarded microprocessors no transport fee was required for these products to naturally find their way into consumer market end computer sales. Untying fees from Intel deadweight brings into balance Intel allocative and productive efficiency maximizing total economic welfare. So doing would have preserved the x86 microprocessor industry oligopoly welfare spaces for competition on the merits in the interest of Nation, society, consumers and democratic capitalism.
Does the dominant firm’s conduct have an
actual tendency to eliminate or reduce competition? yes
Does the conduct provide an economic benefit to the
dominant firm only because of the tendency? yes; move Intel deadweight
Are costs imposed on the dominant firms competitors
by doing so? yes
Are dominant firms profits sacrificed? yes; percent of transport fee
Profit Sacrifice Test:
Outputs market - The Intel Inside fee and cost to administer the scheme place an illegal cost on Intel stockholders exceeding $21 billion subsequently decreasing profit.
United States Senate, Congressional Committee Members pg 9