Waxman: Justice Says Antitrust Laws Provide Little Help In Policing Net Neutrality - Broadcasting & Cable

Waxman: Justice Says Antitrust Laws Provide Little Help In Policing Net Neutrality

Does not stop cable and phone companies from blocking web sites
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According to Rep. Henry Waxman (D-Calif.), he has been told
by the Department of Justice that antitrust enforcement is not the best
way to enforce network neutrality, as some Republicans, including FCC
Commissioner Robert McDowell have argued.

At a network neutrality hearing Wednesday in the House
Communications Subcommittee, Waxman said his staffers had talked to Justice
Department officials, and had been told that although antitrust laws would be
"useful" if a cable company or phone company exercised market
power to stop a competitor from entering the market, "antitrust law
doesn't stop [them] from blocking Web sites or applications that don't pay
for access."

He said DOJ told him that favoring web sites that pay
"high fees" and degrading those that don't "is perfectly legal under
the antitrust laws," as long as the companies are not in direct
competition with the Web sites being degraded."

One of the key concerns about discrimination is cable
operators favoring their owned online services over competing Web sites,
which would appear to be under antitrust purview. But at the hearing none of
the three industry witnesses spoke up when Waxman asked if anyone
disagreed with that assessment, while two pro net neutrality reg witnesses
said they strongly agreed that antitrust regs were of little help.
One said they were good for merger reviews and that was about it, while
another said "antitrust is really no remedy at all for consumers or
producers."

In his dissent from the net neutrality regs, one of
Commissioner Robert McDowell's arguments for the regs being unnecessary
was that antitrust and consumer protection laws already covered the issue.
"Both the Department of Justice and the Federal Trade Commission are well
equipped to cure any market ills."

Specifically, he pointed to the Sherman Act's prohibition on
conduct that would "lead to monopolization, which he said in the context of broadband
service would cover "(1) Exclusive dealing - for example, the only way a
consumer could obtain streaming video is from a broadband provider's preferred
partner site; (2) Refusals to deal (the other side of the exclusive dealing coin)
- i.e., if a cable company were to assert that the only way a content delivery
network could interconnect with it to stream unaffiliated video content to its
customers would be to pay $1 million/port/month, such action could constitute a
"constructive" refusal to deal if any other content delivery network could
deliver any other traffic for a $1,000/port/month price; and (3) Raising
rivals' costs - achieving essentially the same results using different
techniques."

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