competition

Tech Knowledge Statement: Trump Victory A New Hope For FCC

Posted by | Broadband Internet, Regulatory State | No Comments

Haymarket, VA, November 9, 2016 – Fred Campbell, director of Tech Knowledge, issued the following statement regarding the election of Donald Trump as the next President of the United States:

“Trump’s victory offers new hope that the Federal Communications Commission will renew its faith in the dynamism of private enterprise and the competitive spirit. The agency’s pre-Obama policy of relying primarily on competitive market forces to drive investment and innovation in communications networks and services enabled the dynamic internet economy that we know and love. The Obama Administration’s love for top-down government mandates threatened to destroy that economy, but it’s not too late. The Trump Administration has a prime opportunity to level the playing field at the FCC and work with Congress on legislation that will benefit all Americans.”

Tech Knowledge promotes market-oriented technology policies on behalf of the public interest. Additional information about Tech Knowledge can be found on our website, techknowledge.center.

How The Obama Administration Is Rewriting Competition Law At The FCC

Posted by | Antitrust, Broadband Internet, Internet Analogies, Net Neutrality Series 2.0 | No Comments

In his first presidential campaign, then-Senator Obama said “antitrust is the American way to make capitalism work for consumers,” because, “unlike some forms of government regulation, it ensures that firms can reap the rewards of doing a better job” and “insists that customers … are the judges of what best serves their needs.” Obama vowed to “reinvigorate antitrust enforcement” and work with other jurisdictions to “curb the growth of international cartels” so that “all Americans benefit from a growing and healthy competitive free-market economy.”

Regrettably, the Obama presidency’s competition policies have not matched his campaign rhetoric. According to Daniel Crane, a law professor at the University of Michigan, Obama has not reinvigorated antitrust enforcement: “With only a few exceptions, current enforcement looks much like enforcement under the Bush Administration.”

Obama has instead shown a strong preference for relying on other forms of government competition regulation — the kind that prevents firms from reaping the rewards of their investments in American infrastructure and limits what customers can demand — while complaining about the antitrust enforcement efforts of other jurisdictions that might affect U.S corporate interests. In the process, the Obama Administration has slowly been rewriting U.S. competition law in unprecedented ways.

This process has been especially apparent in communications regulation at the Federal Communications Commission (FCC). Though it was once seen as a “sleepy backwater,” the FCC has radically transformed its approach to competition law during the Obama Administration. The FCC’s new approach to competitive analyses runs the risks of spillover to interpretation of antitrust laws and speculation regarding the limits of government intervention in business transactions throughout the economy. Read More

Tech Knowledge Comments on FCC Privacy Proceeding

Posted by | Broadband Internet, Freedom of Speech, Privacy | No Comments

Yesterday Tech Knowledge filed the following comments at the Federal Communications Commission in its proceeding on the application of section 222 to broadband internet access service. The complete comments as filed can be downloaded in PDF format HERE. (Note, the HTLM version of the comments printed below does not contain the footnotes provided in the PDF version available at the link above and filed at the FCC.)

Introduction

Unlike the “telecommunications” traffic carried by the plain old telephone network, internet traffic is valued by advertisers. The data generated by internet traffic is so valuable that at least half of the internet’s economic value is based on the collection of individual user data (primarily for advertising) and most commercial content on the Internet relies on advertising to some extent. “Advertising lessens the cost that each user must pay to receive the benefits of the Internet, and expands the size of the system that society can afford to have.” To put this in perspective, the market for digital advertising ($59.6 billion) is now three times larger than the market for broadcast television advertising ($18.6 billion), and digital advertising is still growing at double-digit rates (20.4% in 2015) while broadcast television advertising is stagnant or declining. Just as watching ads is part of the price consumers pay for free broadcast television, providing access to user data is part of the price consumers pay for the internet as we know it today. Whatever benefits consumers might derive from more stringent regulation of internet data practices will necessarily involve a tradeoff in terms of higher costs — like the premium consumers pay for video services that do not sell advertising (e.g., HBO Now at $14.99 per month).

The FCC’s decision to regulate the usage of internet data for marketing purposes thus raises a central question: When and under what circumstances are the costs imposed on consumers by particular ex ante prohibitions on internet marketing (including costs to market competition) fully offset by the benefits consumers would derive from preventing such use of their data in those circumstances? Read More

Why The FCC’s ‘Unlock The Box’ Plan Is Doomed To Fail

Posted by | Video | No Comments

Yesterday Tech Knowledge filed ex parte letters in the FCC’s ‘Unlock The Box’ proceeding that summarize the legal infirmities of the agency’s proposal to regulate set-top boxes. The letters conclude the FCC’s plan is doomed to fail in a legal challenge because:

  • The FCC plan would require MVPDs to offer their video services for resale by third-parties on a common carriage basis in violation of sections 542(c) and 153(11) of the Communications Act, which expressly prohibit the FCC from regulating MVPDs as common carriers.
  • The FCC plan would violate MVPDs’ First Amendment rights by restricting their editorial discretion in a manner that cannot be justified under intermediate or strict scrutiny.
  • The video interface between consumers and MVPD programming is itself core speech that is entitled to strict First Amendment scrutiny; and even if the video interface were not considered core speech in and of itself, an MVPD’s interface would still be entitled to First Amendment protection due to its close nexus to an MVPD’s exercise of editorial discretion with respect to its underlying video programming.
  • The FCC’s competitive justification for abridging MVPDs’ First Amendment rights is insufficient to demonstrate harm justifying the elimination of editorial discretion by a particular class of the press because the FCC has already found the market for MVPD services (which necessarily encompasses navigation devices) effectively competitive. The First Amendment requires the FCC to “explain[] why, in the pursuit of diversity, the independence of competing vertically integrated MVPDs is inferior to the independence of unaffiliated [navigation device companies].” Time Warner Entm’t Co., L.P. v. F.C.C., 240 F.3d 1126, 1139 (D.C. Cir. 2001).
  • The plan also burdens far more speech than necessary to remedy whatever competitive issues might exist with respect to navigation devices, because there are readily-available alternatives that would eliminate any need for a separate navigation device (or separate navigation software) without abrogating MVPDs’ editorial discretion (e.g., the app-based proposal).
  • Shifting control over the video interface from MVPDs to Internet software companies would threaten the free flow of information and ideas by concentrating control over the video interface in the hands of a few, giant Internet software companies. Internet software companies would have the same incentives as MVPDs to influence consumer behavior in the video marketplace but would have far greater ability to do so than MVPDs, because the largest Internet software companies (1) have greater scale and ability to reach consumers than MVPDs, but (2) would not be subject to the FCC’s regulatory constraints on MVPD market structure or public interest obligations (e.g., political advertising disclosures).

Tech Knowledge Comments on FCC Proposal to Force MVPDs to Offer Unbundled Wholesale Services

Posted by | Broadband Internet, Freedom of Speech, Satellite, Video | No Comments

Today Tech Knowledge filed the following comments at the Federal Communications Commission that address an FCC proposal to force MVPDs to offer unbundled wholesale services in the guise of creating competition in the artificial market for set-top boxes (a proposal dubbed Unlock the Box by FCC Chairman Tom Wheeler). The complete comments as filed can be downloaded in PDF format HERE. (Note, the HTLM version of the comments printed below does not contain the footnotes provided in the PDF version available at the link above and filed at the FCC.)

Executive Summary

The Wholesale Proposal Is an Impermissible Common Carriage Requirement

The FCC’s proposed regulations (the “Wholesale Proposal”) would do more than merely create competition in a market for the “equipment” used to access MVPD services that is artificially separated from the underlying MVPD services themselves; the proposed rules would effectively require MVPDs to provide unbundled, nondiscriminatory access to video programming “information flows” that are an essential part of otherwise fully integrated MVPD services. The avowed purpose of the Wholesale Proposal is to enable third parties to combine MVPD’s unbundled programming with “ancillary features” to provide entirely new, “differentiated” services in competition with MVPDs’ underlying services — the same justification that has traditionally been used to impose resale and other wholesale obligations on common carriers under Title II. The FCC cannot accomplish this result in the guise of promoting competition in an artificially created market for “equipment,” because mandatory wholesale requirements are fundamentally common carriage, and the Communications Act prohibits the FCC from treating MVPDs as common carriers. Read More

Georgetown Analysis Shows FCC Special Access Regulation Intended To Give CLECs Even Higher Profits

Posted by | Broadband Internet, Regulatory State | No Comments

The FCC is examining whether AT&T, Verizon, CenturyLink and other incumbent telephone companies have market power in the market for business data services (also known as “special access”). To hear their competitors like Level 3 and Windstream tell it, incumbent telcos have “locked up” the business broadband market and exercise “overwhelming control … to dictate terms and conditions” in that market. According to a recent study by Anna-Maria Kovacs at Georgetown University, however, these competitors’ services “are far more profitable” than services provided by incumbent telephone companies.

If incumbent telcos could actually exercise market power, they could unilaterally increase their profitability by either (1) charging monopoly prices (i.e., prices that are higher than would occur in a competitive market) or (2) lowering the quality of their services (e.g., by forgoing maintenance or investment in new network capabilities). These results of market power — artificially high prices or lower quality services — are what competition laws are intended to avoid.

Yet the evidence presented in the Georgetown report and the recent, sworn testimony of FCC Chairman Tom Wheeler show that the way incumbent telcos are behaving in the broadband marketplace is the exact opposite of how firms with market power are expected to behave. Read More

Shining The Spotlight On The FCC: How Rules Impact Consumers And Industries

Posted by | Broadband Internet, Regulatory State | No Comments

The American Action Forum has posted a video of last week’s event examining current regulatory issues at the FCC. The event was keynoted by FCC Commissioner Mike O’Rielly, who was followed by a panel discussion moderated by Rob Pegoraro (Yahoo Tech) with panelists Fred Campbell (Tech Knowledge), Meredith Rose (Public Knowledge), and Will Rinehart (American Action Forum). You can watch the video HERE.

Tech Knowledge Statement On Netflix Throttling Admission

Posted by | Broadband Internet, Statement, Video | No Comments

Haymarket, VA, March 25, 2016 – Fred Campbell, director of Tech Knowledge, issued the following statement regarding Netflix’s admission that its been secretly throttling its wireless video traffic on a discriminatory basis:

“When I first raised concerns about Netflix’s cynical manipulation of Internet traffic flows in this analysis, I thought the FCC would ask Netflix some questions like these. Instead, it was a Canadian regulator who used language from my initial analysis (in this hearing) to ask Netflix whether it was throttling traffic to aid its net neutrality lobbying efforts, and Netflix’s director of global public policy who said, ‘The allegations that we slowed our traffic or otherwise [are] responsible for degrading users’ service are categorically untrue.’

Yesterday, however, staff at the Wall Street Journal reported that Netflix now admits that it has been secretly throttling its video traffic for more than five years in a manner that is patently discriminatory.

Make no mistake, the importance of this revelation for U.S. Internet policy goes well beyond Netflix and the all-too-common practice of corporate hypocrisy in Washington. Policymakers in the U.S. have systematically excluded Netflix and all other “over-the-top” companies from Internet, privacy, and video regulations that would otherwise apply based on the presumption that over-the-top companies lack the incentive or ability to engage in discriminatory or anticompetitive behavior that could harm consumers or competition. Netflix just proved that presumption is dead wrong.

The public policies that govern communications systems should be purposeful, not haphazard. They should be applied in a way that’s even-handed, not in a way that treats one set of industry participants better than another. They should be based on credible, reliable data, not anecdotal evidence offered by large corporations seeking government favors. And when there are credible allegations that a company has secretly engaged in practices that have been deemed harmful to consumers and competition, policymakers should investigate those allegations in good faith, not ignore them.

Now that Netflix has finally admitted the truth, Congress, the FCC, and the FTC should fully investigate Netflix’s secret and discriminatory throttling practices.”

Tech Knowledge promotes market-oriented technology policies on behalf of the public interest. Additional information about Tech Knowledge can be found on our website, techknowledge.center.

The FBI, FCC, And You: Whose Data Is It Anyway?

Posted by | Broadband Internet, Privacy | No Comments

Federal Communications Commission (FCC) Chairman Tom Wheeler is proposing discriminatory Internet marketing rules — rules that restrict the marketing efforts of Verizon FIOS and other Internet service providers (ISPs) only while giving Google and other big data companies in Silicon Valley an anticompetitive advantage in online advertising. Wheeler claims discriminatory marketing restrictions are intended to protect the privacy of “your data,” including “the websites that a customer visits, how often they visit them, and the amount of time they spend on each website.”

It appears Wheeler didn’t get the memo from the Federal Bureau of Investigation (FBI) and other law enforcement agencies about the law governing privacy and ownership of communications addressing and routing volumes. According to a line of federal court cases dating back to the nineteenth century, users of communications networks don’t have a “justifiable,” “reasonable,” or even a “legitimate expectation of privacy” in that type of data. In fact, it’s not “your” data.

Consumers may have an expectation of privacy in the content of their communications, but that expectation doesn’t reasonably extend to the addresses or volumes of their communications. The federal courts have held that consumers don’t have a legitimate expectation of privacy in the addresses they write on sealed letters and packages sent through the U.S. mail or their weight, the numbers they dial on their telephones or the number of calls they make, or the to/from addresses of their email messages and IP addresses of the websites they visit or the volume of the data transmitted. The Supreme Court has held that an expectation that this type of information should be private “is not one that society is prepared to recognize as ‘reasonable.’” Read More

Event: Special Access Re-Regulation at TIA Spring Policy Summit 2016

Posted by | Broadband Internet, Regulatory State | No Comments

The FCC appears poised to extend antiquated special access regulations using the pretext that additional asymmetric regulation of new broadband investment would enhance competition.

Join Tech Knowledge and IIA on March 9 in Washington, DC for for a timely discussion about the state of competition in the market for business communications services and the FCC’s pending special access proceedings at the Telecommunications Industry Association’s Spring Policy Summit 2016.

An eminent panel of experts from both sides of the aisle will discuss the issues at stake in the special access debate, including:

  • Bruce Mehlman, Co-Chairman of the Internet Innovation Alliance and former Assistant Secretary of Commerce for Technology Policy
  • Fred Campbell, Director, Tech Knowledge and former FCC Wireless Bureau Chief
  • Hal Singer, Senior Fellow, Progressive Policy Institute and adjunct professor at Georgetown University’s McDonough School of Business
  • Patrick Brogan, Vice President – Industry Analysis, USTelecom
  • Berge Ayvazian, Principle Consultant, Wireless 20/20

Register: Click HERE.

Where: Hotel Monaco 700 F Street, NW, Washington, DC 20004

When: Wednesday, March 9, 2016, from 1:15 to 2:05 pm