Is the "Agency" deal not as straight-forward as we thought?

"IT" being the so-called "Agency" arrangement that Apple is striking with most publishers - and that most publishers are asking (demanding?) Amazon agree to. The New York Times' Motoko Rich has me confused.

Maybe e-book prices won’t be rising so much after all.

Always inspires confidence, doesn't it, when a 'news' article starts with the word "maybe". I'm just saying...

Publishers indicated that e-book editions of most newly released adult general fiction and nonfiction would sell in a range from $12.99 to $14.99, under a complicated formula that pegs e-book prices to the list prices of comparable print editions. Publishers liked Apple’s deal because it resulted in a marked increase above Amazon’s $9.99 price for most new releases.

How complicated is the format? Publishers set the price, keeps 70% of the gross. Apple allows them to set the price, keeps 30% of the gross.

But according to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites. So, for example, a book that started at $14.99 would drop to $12.99 or less once it hit the best-seller lists.

This is where I get confused. Apple wants what flexibility? I thought the deal was - publisher's set the price.  The hope was, they'd set the price competitively - now we're hearing that Apple has the right to force discounts on best selling titles? Does Amazon get this same provision, or might we actually see iBooks priced CHEAPER than their Kindle counterparts for the hottest titles?

And what of the discounts - do they come out of the 30% Apple keeps, or are they negotiating the right to force discounts below $14.99 for any title on the best selling list?

If I were Apple, and could get ONE price concession, it'd be a guarantee that upon release of a paperback, the price of the eBook drops by 50% automatically. Ever notice those $9.99 Kindle books tend to stay $9.99 even once the $8 paperback hits the market?