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BAA is too powerful?

BAA, the Spanish owned company which runs the three biggest airports in the UK, might soon see itself split up and forced to sell its assets. If the competition commission find their acquisitions not to be in the publics’ best interests in August, they’ll be split and sold.

Manchester airports group (MAG) said that if they were forced to sell they would be interested in buying Gatwick airport as they think they can improve the performance and lower prices.

Personally I’ve never liked BAA’s market dominance in the UK, so hopefully the competition committee will split the firm up. However, maybe handing it to the second biggest wouldn’t be so smart.

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  • Is inheritance tax too high?

    In short, it is, but let me convince you first:

    • Value of house - £875,000

    • Two allowances - £624,000

    • Amount chargeable to tax at 40% - £251,000

    • Tax due at 40% - £100,400

    This 40% tax rate is of such a rate that parents will often transfer their homes well before death (if the home is transferred over 7 years from death it will no longer be taxable) and causes entrepreneurs to simply move the money abroad. I see the government’s angle, they don’t want people to be feeding off of their parents, but isn’t that the point in building a better life from scratch? Why should it be taken away because the government wants to buy a £1m fountain on a roundabout (that recently happened near me).

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  • The benefits of monopolies

    A monopoly is, technically, 100% of the market share; however, getting to that stage is impossible so the legal term of a monopoly is now 25% of the market share. At 25% the competition commission takes a look at the business and at 40% they start to see if it’s in the best interests of the public to split the firm. But monopolies have their advantages.

    When a business has a monopoly, the firm benefits from economies of scale: Higher technological positioning (they’re able to buy the newest equipment), bulk buying (which usually brings down the cost to customers) as well as a multitude of other things.

    The argument against monopolies is that they can exploit the market and remove fair play by using extreme barriers to entry, look at Microsoft as an example.

    In my opinion the legal term of a monopoly needs to be 40% because at 25% there’s still a 75% market against them who are very competitive (look at the supermarkets market share).

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  • The company could give no guarantee that customers would get the theoretical maximum 24Mbps speed promised by ADSL2+.

    BT said ADSL2+ would reach a “potential footprint of 10 million homes and businesses by the spring of 2009″. “BT appear to have reverted to the sloth of the Home Highway period, rather than building upon their more recent successes in extending DSL’s UK availability so widely,” said Mr Fogg. Writing on his blog: “If this is BT’s 21st century network then those fibre to the home networks are for the 22nd century.” Some ISPs in the UK, such as Sky and O2, have already begun to offer ADSL2+ in the UK by deploying their own technology in exchanges.

    Jupiter analyst Ian Fogg said the roll-out was “tardy” and available to “a tiny fraction” of UK households. I agree. I’m still stuck with 1mb broadband, when they will update my speed?!

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  • Blu ray’s hopes didn’t go far

    Any hopes Blu-ray had of some kind of giant sales increase due to the end of the format war with HD proved otherwise. One possibility that could be reached is that despite the format war being over and a winner being ‘crowned’, people still aren’t ready to ditch the traditional DVD in favour of the next-generation Blu-ray, why? Because they’re too damn expensive, maybe when the economy stabilises and the prices go down there might be a real increase in sales.

    At least now the focus in terms of promotion and advertising the light can be placed upon one format, which might resonate better with the general public and slowly begin to sway them towards the new format. For me, the price needs to be halved before I’m swayed and I’m sure many people agree.

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  • Adobe won’t be left behind

    The company unveiled that top industry leaders, such as LG Electronics, Sony Ericsson, Toshiba, Motorola, Verizon Wireless and others are supporting the Open Screen Project, together with BBC, MTV Networks and NBC Universal.

    Adobe will also be removing restrictions on the use of files in SWF and FLV format and will also publish detailed information about the inner workings of its Flash player and streaming Flash technologies (the Adobe Flash Cast protocol).

    The Open Screen Project is meant to improve Internet experiences on television, personal computers, mobile devices and computer electronics, whilst removing licensing fees previously associated with mobile versions of Flash. Adobe has taken an aggressive step to ensure its Flash and AIR technologies are not left behind when it comes to mobile platforms.

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