Cisco could face action over router monopoly

Cisco could find itself facing similar antitrust action to Microsoft if it continues to dominate the router market, claims influential analyst Robin Bloor.

Cisco could find itself facing similar antitrust action to Microsoft if it continues to dominate the router market, claims influential analyst Robin Bloor.

His comments come days after Cisco chief strategy officer Mike Volpi refuted suggestions that Cisco could face governmental action over its 81 per cent ownership of world router sales.

Bloor, founder and head of Bloor Research, said: "There's no denying that Cisco has a de facto monopoly in the router market. The question is whether it is using this monopoly in a predatory and unfair manner. There is plenty of anecdotal evidence that it has made connectivity with its routers very difficult for companies like 3Com."

However, according to Bloor, a test case is most likely to emerge not in the traditional router market, but if Cisco succeeds in dominating the generation of optical network router hardware.

"The game is over for the current generation of technology, and Cisco has won. It is in the emerging fibre market where it competes with companies like Nortel and Lucent that it could face complaints," said Bloor.

He believes that Cisco is well positioned to fight off any such challenge. "Microsoft's downfall was its arrogant stance. Like Intel a few years ago, if challenged Cisco would probably come to a sensible arrangement, [i.e.] not take on the US government," he said.

"Cisco is pragmatic and sensible, and holds its strong position partly by virtue of excellence," he added.

Volpi has said publicly that Cisco does not have too many concerns about antitrust law. "The networking business and the communications business are based on standard protocols, which means our devices talk to other devices via a standard communications language. And if one day our products don't work as well as our competitors', we can get thrown out of there," he said.