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For Big Tech Companies, Romance Is In The Air

Maybe it's the end of Lent and the coming of spring, but despite the gloomy economic prospects there's definitely a spirit of reconciliation and conflict-resolution in the air of the U.S. tech industry.

Today Internet P2P service BitTorrent and Comcast who have been engaged in a bitter fight over net neutrality and "traffic-shaping" on Comcast's pipes, reached an agreement to make "a collaborative effort" along with "the broader Internet and ISP community" to work out their differences. Comcast, the second-largest U.S. Internet service provider with more than 13 million broadband subscribers, will adopt new bandwidth allocation techniques later this year that will be "protocol agnostic." The talks, which are ongoing, could lead to a rapprochement between file-sharing software makers and their users, on the one hand, and the major Internet service providers on the other.

Federal regulators earlier this week approved the merger of XM Satellite Radio and chief rival Sirius Satellite Radio, a $4.6 billion union that once looked like it would never pass muster with the Justice Department's antitrust lawyers. As Wall Street cheered, sending the share price of both companies sharply higher, the FCC got ready to weigh in next. With the Justice Department signed off it's unlikely that FCC Chairman Kevin Martin will continue to block the deal.

The on-again off-again romance of Clearwire and Sprint Nextel and their WiMax network projects is apparently on again, this time with the backing of big cable companies Comcast and Time Warner.

Intellectual property lawyers have caught make-up fever, too: late last month eBay finally settled the 2001 patent lawsuit filed against it by MercExchange, which claimed it filed patents in the late 1990s that cover eBay's "Buy It Now" feature. The MercExchange/eBay spat was one of the longest-running and most contentious IP battles in Silicon Valley.

Heck, even Microsoft and Apple are burying the hatchet: Not only will the new software-development kit for the iPhone include support for Microsoft's Exchange Server, but Microsoft plans to offer software customized for the iPhone. Tom Gibbons, corporate VP of Microsoft's Specialized Devices and Applications Group, told Fortune that MS developers are considering a variety of possibilities that include offering Office functionality on the popular smartphone.

To be sure, not all of these get-togethers are as joyous as they might sound. Microsoft, of course, has no choice: it's been developing software for Apple products for years through its Mac Business Group in the Valley. EBay settled the MercExchange suit only after exhausting its legal avenues to avoid a $30 million court judgment. And the Comcast-BitTorrent arrangement doesn't signal the end of traffic management by the cable company: Comcast will simply shift from slowing specific applications to limiting speeds to users that consume high amounts bandwidth. While that's a form of congestion pricing that is hard to quarrel with, it's still a punish-the-customer method of dealing with capacity constraints.

By next year at this time, if plans succeed to increase Comcast's capacity and to optimize file-sharing software like BitTorrent to use existing bandwidth more efficiently, those constraints should have nearly disappeared. That would make today's news moot.

Still, it's nice to see big tech companies getting along for the good of the customer and to grow overall businesses, rather than slugging it out, for a change. Now if only someone could get Obama and Clinton to sit down together ...

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