Internet access and monopoly power

FTC Commission Jon Leibowitz briefly touched on the competition law aspects of network neutrality and last-mile access in a speech at the FTC “Protecting Consumers in the Next Tech-ade” Hearing earlier this month: The Changing Internet: Hips Don’t Lie

Some of the most important issues regarding Net Neutrality involve transparency and disclosure. Will carriers block, slow, or interfere with applications or services? If so, will consumers be told all of this before they sign up? To my mind, failure to disclose these limitations would be “unfair or deceptive” in violation of the FTC Act.
Net Neutrality also invokes complicated competition issues. The last mile of the Internet is its least competitive. Nearly all homes in the US – upwards of 98 percent – that receive broadband get it either from their cable or telephone company. Up until now, the relative neutrality of the Internet has meant that competition and innovation elsewhere in cyberspace has not been affected by the market power of the telephone and cable companies. But if these companies are able to discriminate, treating some bits better than others, there is a danger that their market power in the last mile can interfere with the growth, character, and development of the Internet.
To be sure, there is another side to the debate. The ability of providers to charge more for time sensitive applications and content that takes up more broadband may encourage them to make necessary investments. That’s a goal that all of us should support.

Taking a step back from the framework of competition law or even telecommunications law, Susan Crawford is thinking about the big picture of communications policy: Searching for a principle “At the moment, federal telecommunications policy seems to have no coherent set of goals. We have complex and separate regulatory structures covering telephony (wired and wireless), broadcasting, cable television and satellites. Although there is no express delegation by Congress to the FCC to regulate the internet, the FCC sometimes imposes heavy-handed rules (E911 and CALEA for VoIP) and sometimes claims that its chief goal is to be deregulatory.”

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