Category Archives: Antitrust

Chess End-Game for the Duopoly?

This is rich:
“Now is not the time, nor is this the appropriate proceeding, to engage in a debate about the need for net neutrality obligations,” two TWC lawyers warned the FCC on Monday. The discussion should stay strictly focused on broadband deployment, the company insists. “Debates in this proceeding about new net neutrality regulations would only divert attention from these important goals, delaying the distribution of funds while generating considerable contention when the Commission should instead be fostering a spirit of collaboration.”
Matthew Lasar, writing in ars technica, makes a familiar point:
And one of them, Comcast, definitely thinks that the agency was way out of line to invoke this statement when sanctioning the company for P2P throttling last year, and has filed legal papers against the FCC in federal court. Expect arguments that the Commission never really properly established the declaration as a set of rules when the trial starts.
Well, yeah, I’d expect to hear arguments like that, because the duopoly’s paid shills have been making them ever since the FCC made that toothless declaration of principles.

Yet it seems the Obama administration has taken the initiative to do what the FCC never did:

But the American Recovery and Reinvestment Act of 2009 has hard-wired the FCC’s pronouncement into law, at least when it comes to stimulus grantees. The legislation requires of grant recipients “at a minimum, adherence to the principles contained in the Commission’s broadband policy statement.” Plus the government must publish, in consultation with the Commission, “the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded.”
Still, why is Time Warner picking now to be so intransigent? And why is NCTA claiming FCC can’t interpret those principles, because
“Imposing new and untested nondiscrimination or interconnection requirements as a condition of stimulus funding risks injecting contentiousness, uncertainty, and delay into a process that should focus on creating new jobs and new broadband connections as quickly as possible,”
While NCTA and TW are of course themselves injecting contentiousness, uncertainty, and delay into the process.

Hm, so if the current duopoly won’t accept these principles, the stimulus money may have to go to other companies. Which could mean the end of the duopoly.

The duopoly is playing chess with death.

Sterling: Samizdat Quality Quality Oligarch Press

bruce-sterling.jpg Bruce Sterling,, who has studied and practiced paper and online media his en tire career, and who also traveled to the USSR and then to Russia, says Prof. Clemons hasn’t imagined the worst:
(((Well, no — the “worst” would be that the publishers keep grinding out product, only it’s evil propaganda entirely subsidized by ultrawealthy moguls who have made themselves the only public source of news and culture. In other words, the commercial press collapses and it’s replaced by a classically fascist press. (Likely run on bailout money.) THAT’s the worst — with the possible exception of a furious proletarian upheaval that forces everyone to read grimy, poorly-printed copies of PRAVDA.)))
It would be easy to see a path from where we are now (half of U.S. media is owned by only five companies that actively suppress stories they don’t want to hear and promote stupid ones they do want) to Bruce’s scenario.

Lessig’s Herculean Holiday Present: Reboot the FCC

1990.05.0243.jpeg Here’s a good test for the new U.S. Executive: to recognize that steady pragmatism means radical change, starting with the FCC:
The solution here is not tinkering. You can’t fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: “minimal intervention to maximize innovation.” The iEPA’s core purpose would be to protect innovation from its two historical enemies—excessive government favors, and excessive private monopoly power.

—Reboot the FCC, We’ll stifle the Skypes and YouTubes of the future if we don’t demolish the regulators that oversee our digital pipelines. By Lawrence Lessig, Newsweek Web Exclusive, 23 Dec 2008

Lessig gets the connection with his old topic of intellectual property and copyright. Those are monopolies granted by the federal government, and they have been abused by the monopoly holders just like the holders of communication monopolies: Continue reading →

Banana Republic, DC: Telecom Lobbying Revolving Door

800px-Banana_republic.svg.png Greenwald notes that AT&T spends more in three months for lobbying than EFF’s entire budget for a year. Then he spells out how the lobbying revolving door works, and concludes:
The “two sides” referenced there means the House Democratic leadership and the telecoms. Congressional leaders are “negotiating” with the telecoms — the defendants in pending lawsuits — regarding the best way for immunizing them from liability for their lawbreaking, no doubt with the help of the former Democratic members and staffers now being paid by the telecoms to speak to their former bosses and colleagues about what they should do. To describe the process is to illustrate its oozing, banana-republic-like corruption, but that’s generally how our laws are written.

None of this is particularly new, but it’s still remarkable to be able to document it in such grotesque detail and see how transparent it all is. In one sense, it’s just extraordinary how seamlessly and relentlessly the wheels of this dirty process churn. But in another sense, it’s perhaps even more remarkable — given the forces lined up behind telecom amnesty — that those who have been working against it, with far fewer resources and relying largely on a series of disruptive tactics and ongoing efforts to mobilize citizen anger, have been able to stop it so far.

— How telecoms are attempting to buy amnesty from Congress, Glenn Greenwald, Salon.com, Saturday May 24, 2008 06:48 EDT

Remember, AT&T and the other telcos and cablecos are the same companies that want to nuke net neutrality in the name of competition and progress; two other flags they behind, just like the banana republic flag of national security.

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Positive Externalities: What Yoo Ignores

frischmann.jpg It turns out Prof. Chris Yoo has been rebutted by legal scholars before:
Our article directly replies to a series of articles published by Professor Christopher Yoo on this topic. Yoo’s scholarship has been very influential in shaping one side of the debate. Yoo has mounted a sophisticated economic attack on network neutrality, drawing from economic theories pertaining to congestion, club goods, public goods, vertical integration, industrial organization, and other economic subdisciplines. Yet he draws selectively.

For example, his discussion of congestion and club goods is partial in that he ignores the set of congestible club goods that are most comparable to the Internet – public infrastructure. Yoo focuses on the negative externalities generated by users (i.e., congestion) but barely considers the positive externalities generated by users (he simply assumes that they are best internalized by network owners). Yoo appeals to vertical integration theory to support his trumpeting of ‘network diversity’ as the clarion call for the Internet, but he myopically focuses on the teaching of the Chicago School of economics and fails to consider adequately the extensive post-Chicago School literature. And so on.

In our article, we explain the critical flaws in Yoo’s arguments and present a series of important arguments that he and most other opponents of network neutrality regulation ignore.

— Network Neutrality and the Economics of an Information Superhighway: A Reply to Professor Yoo, BRETT M. FRISCHMANN, Loyola University of Chicago – Law School; Fordham University – School of Law, BARBARA VAN SCHEWICK, Stanford Law School, Jurimetrics, Vol. 47, 2007, Stanford Public Law Working Paper No. 1014691, Stanford Law and Economics Olin Working Paper No. 351

Hm, “positive externalities generated by users” as in participation and ad hoc content creation.

The authors also address David P. Reed’s point that competition is not the holy grail of networking:

By focusing only on the market for last-mile broadband networks, Yoo not only neglects the importance of unfettered application-level innovation for realizing economic growth and the role of a nondiscriminatory access regime in fostering the production of a wide range of public and nonmarket goods. His argument also neglects other ways to solve the problem of broadband deployment that would not impede competition and innovation in complementary markets.

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Fair Trade: Fixing Antitrust for the Internet

zoe_lofgren.jpg So suppose for the moment that net neutrality is an antitrust issue. Does this bill fix antitrust law enough to deal with it?
Federal lawmakers have introduced yet another network neutrality bill, but this time with a focus on fair trade issues.

This week, U.S. Rep. John Conyers, who chairs the House Judiciary Committee, has introduced legislation that addresses the issue by labeling it an antitrust matter. Conyers’ H.R. 5994 would ban discriminatory network management practices by amending the Clayton Act.

The bill, labeled the Internet Freedom and Nondiscrimination Act, would require carriers to promote competition and allow people to use any device they want to on the carriers’ networks. The bill makes exceptions for emergencies, criminal investigations, parental controls, marketing, and improvements to quality of service.

Under the Detroit Democrat’s proposed legislation, ISPs could give preference to certain types of data, but they must give the preference regardless of the data source. It would ban ISPs from discriminating based on content, applications, or services.

— Lawmakers Eye Net Neutrality As Anti-Trust Issue, The Internet Freedom and Nondiscrimination Act would require carriers to promot e competition and allow people to use any device they want to on the carriers’ networks. By K.C. Jones, InformationWeek, May 9, 2008 05:42 PM

And does this fix the problems Google and Ebay complain about?

Meanwhile, a cosponsor sums it up:

U.S. Rep. Zoe Lofgren, D-Calif., has co-sponsored the legislation.

“Recent events have shown that net neutrality is more than a hypothetical concern. We need a meaningful remedy to prevent those who control the infrastructure of the Internet from controlling the content on the Internet,” Lofgren said. “This legislation will help guarantee that the innovative spirit of the Internet is not trampled.”

-jsq