Broadband connectivity competition policy

ftc-repport-copy.jpgAt the end of June 2007, in response to a recent debate relating to Internet access issues, the Federal Trade Commission (“FTC”) presented a report to summarize the Task Force’s learning on broadband Internet connectivity in general, and network neutrality in particular, as developed from the Workshop, meetings between the Task Force and various interested parties, and the FTC staff’s independent research.

The North American report, that without a doubt will have influence at the telecommunications national regulatory organizations of the region through CITEL, shows the joint of policies necessary to guarantee that it exists true competition and reasonable prices.

In Latin America the neutrality and segregation of the network are the subjects that would have to integrate as the pending agenda of the telecommunications national regulatory organizations. Instead of that, many of them seems to be in a “wait and see” position, studying the appropriation of the “convergence” and the “triple play” as the commercial strategy of the dominant corporations to reserve the market.

They suffer the asymmetric pressure of the corporative lobby, in absence of representative organizations of users and complementary antitrust national policies.

In Brazil and Chile, the countries with more dynamic markets and with a greater real competition, we can observe, as a result of a strong and mandatory regulation, the promotion of the segregation of the network and the development of “virtual operators”(OMV) who buy the use of infrastructure in equality of conditions and wholesale cost that the dominant corporations.

Coincidently in these two countries we can see developed associations of users and national commissions of Internet. This seems to be at the origin of articulated national policies of long term, which are reflected in low prices.

This North American report, as the reality of the most dynamic countries in LAC region, makes us notice the necessity of an independent set of integrated policies, like those of antitrust, and a strong monitoring and police capacity in order to complement the purely regulatory ones.

The detailed reading of the report of the FCC allows us to think that if we wish a greater integration of pro poor policies maybe a more complex analysis it will be necessary. Perhaps it is possible to integrate some kind of direct subsidy and a cost with reasonable
policy of prices fixed by the regulatory authority as it is already being made in the market of the movable telephony in Europe.

The Task Force held a two-day public workshop on broadband connectivity competition policy in February 2007 (“Workshop”) to bring together consumer advocates and experts from business, government, academia, and the technology sector to explore competition and consumer protection issues relating to broadband Internet access.(4)

Originally, the Internet developed out of efforts by researchers at American universities and the U.S. Department of Defense Research Projects Agency (“DARPA”)(5) in the 1960s and 1970s to create and test interconnected computer networks that would communicate via data packet switching rather than traditional circuits. Today, the Internet – which enables applications such as e-mail and browsers that search the World Wide Web (the “Web”) – connects many millions of end users (and more than one hundred million Web sites worldwide) to content, applications, and each other. End users include the initial government and academic centers, corporate entities across all sectors of the economy, and individuals and associations. Individual end users (and networks of end users) arrange for Internet access via a “last mile” connection to an Internet service provider (“ISP”),(6) which provides, in turn, routing and connections from the ISP’s own network to the Internet. Content and applications providers offer their products and services to end users via network operators, which enable connectivity and transport into the middle, or “core,” of the Internet. Before the turn of the century, most computer users connected to the Internet using “narrowband,” dial-up telephone connections and modems to transmit data over the telephone system’s traditional copper wirelines.

Much faster “broadband” connections recently have been deployed using various technologies, including coaxial cable wirelines, upgraded copper digital subscriber lines (“DSL”), and to a lesser extent fiberoptic wirelines, wireless, satellite, and broadband over powerlines (“BPL”).

Traditionally, data traffic has traversed the Internet on a “first-in-first-out” and “best-efforts” basis. This protocol for data transmission was established principally as a result of DARPA’s original priority, which was to develop an effective technique for communications among existing interconnected networks, and which placed network survivability – or the potential for robust network operation in the face of disruption or infrastructure destruction – as the top goal in designing the overall architecture of this network of networks. Since the Internet’s earliest days, however, computer scientists have recognized that network resources are scarce and that traffic congestion can lead to reduced performance. Although different data transmission protocols and the viability of usage-based pricing mechanisms were explored throughout the 1980s and 1990s, the debate over broadband connectivity policy did not reach critical mass until recently.

Technical, business, legal, and regulatory developments all appear to have contributed to the acceleration of the discussion. Regulatory jurisdiction over broadband services generally is subject to the shared jurisdiction of the FCC, the FTC, and the Department of Justice (“DOJ”).7 FCC jurisdiction comes chiefly from the Communications Act of 1934, as amended (“Communications Act”).(8) FTC jurisdiction over broadband arises chiefly under its statutory mandate to prevent “unfair methods of competition” and “unfair or deceptive acts or practices in or affecting commerce” under the FTC Act.9 The FTC’s authority to enforce the federal antitrust laws generally is shared with DOJ’s Antitrust Division. The FCC, FTC, and DOJ have exercised their existing authority in various ways. All three agencies have scrutinized proposed mergers in Internet-related markets and have negotiated significant conditions on certain mergers allowed to go forward.(10) In addition, the FTC has enforced the consumer protection laws, bringing a variety of cases against Internet service providers that have engaged in allegedly deceptive marketing and billing practices.(11)

Certain judicial and regulatory decisions in recent years have clarified the scope of broadband regulation in two fundamental regards. First, since about 2000, the FCC has undertaken a substantial and systematic deregulation of broadband services and facilities, concluding that cable, wireline, powerline, and wireless broadband Internet access services are “information services” that are not subject to common carrier requirements.(12)

The first of these decisions was sustained by the Supreme Court in National Cable & Telecommunications Association v. Brand X Internet Services.(13)

Second, these decisions have served to reinforce and expand FTC jurisdiction over broadband Internet access services. That jurisdiction had once been regarded as limited to the extent that the FTC’s general enforcement authority under the FTC Act did not extend to entities that were “common carriers” under the Communications Act. The regulatory and judicial decisions at issue, however, confirmed that the larger categories of broadband Internet access services, as information services, are not exempt from FTC enforcement of the FTC Act.
In recent years, changes in both user demand and technology have prompted some broadband providers openly to consider prioritizing certain data traffic to improve network management and provide premium services. The demand for bandwidth has increased dramatically, as a growing number of users seek access to increasingly datarich Internet content, such as streaming video, which often requires considerable bandwidth or has particular quality-of-service requirements. That demand has promptedconcern about present and future congestion and about the need for further infrastructure investment and development. At the same time, technological developments have made feasible differentiation in delivery of data of various types, or from various sources, based on payment to or affiliation with a network operator.
In response, various interested parties, including some content and applications providers and commentators, have expressed concern about network operators’ use of these technologies in an environment that is not subject to common carrier regulations.

Some of these providers and commentators, therefore, have proposed that the transmission of data on the Internet be subject to some type of “net neutrality” regulation that forbids or places restraints on some types of data or price discrimination by network operators. Opponents of net neutrality regulation assert that it is not just unnecessary, but potentially harmful, and that allowing network operators to innovate freely across technical and business contexts, and to differentiate their networks, will lead to enhanced service offerings for both end users and content and applications providers. Before turning to the policy discussion that follows, it is worth clarifying that this Report reflects the views of the staff of an agency that enforces the federal antitrust and consumer protection laws. The statutory mission of the FTC is to protect both competition and consumers by safeguarding and encouraging the proper operation of the free market. In carrying out that mission, the FTC primarily is focused on maximizing consumer welfare, as that term is defined in an economic sense in modern antitrust and consumer protection jurisprudence. We recognize that preserving the diversity of views expressed on the Internet is one of the animating principles of many of the most ardent proponents of network neutrality. In this Report, however, we do not attempt to balance consumer welfare (as we use it, in the economic sense) and free expression.(14)
Instead, the Report focuses on the consumer welfare implications of enacting some form of net neutrality regulation. Further, although the goal of increasing competition in broadband Internet access is fundamental to the FTC staff’s interest and may be widely shared, how best to achieve that goal is a point of sharp disagreement. What the FTC can offer in this debate is an explanation of which behavior the antitrust and consumer protection laws already proscribe and a framework for analyzing which conduct may foster or impede competition in particular circumstances.

The Report is organized as follows. Chapter I provides technical information on the functioning of the Internet, and Chapter II provides background information on the legal and regulatory developments that have fueled the debate over net neutrality regulation.

The purpose of these Chapters is to inform the subsequent policy discussion.

Chapter III identifies and briefly describes the various arguments for and against net neutrality regulation that have been put forth to date.

Chapter IV analyzes potential conduct by ISPs and other network operators, including vertical integration into content and applications and discrimination against non-affiliated providers of content and applications.

Chapter V analyzes the potential use of data prioritization technologies by network operators.

Chapter VI considers the current and future state of competition in the area of broadband Internet access.

Chapter VII explores the application of the antitrust laws to certain potential conduct and business arrangements involving ISPs and other network operators.

Chapter VIII addresses consumer protection issues relating to broadband Internet access.

Chapter IX identifies regulatory, legislative, and other proposals for broadband Internet access that have been put forth to date. Finally, Chapter X identifies guiding principles for policy makers to consider prior to enacting any new laws or regulations in this area.

The Contours of the Debate

Proponents of network neutrality regulation include, among others, some content and applications providers, non-facilities-based ISPs, and various commentators. They generally argue that “non-neutral” practices will cause significant and wide-ranging harms and that the existing jurisdiction of the FCC, FTC, and DOJ, coupled with Congressional oversight, are insufficient to prevent or remedy those harms.
Proponents suggest that, with deregulation of broadband services, providers of certain broadband Internet services have the legal ability, as well as economic incentives, to act as gatekeepers of content and applications on their networks.

Principally, these advocates express concern about the following issues: (1) blockage, degradation, and prioritization of content and applications; (2) vertical integration by ISPs and other network operators into content and applications; (3) effects on innovation at the “edges” of the network (that is, by content and applications providers); (4) lack of competition in “last-mile” broadband Internet access markets; (5) remaining legal and regulatory uncertainty in the area of Internet access; and (6) the diminution of political and other expression on the Internet. Not all proponents of net neutrality regulation oppose all forms of prioritization, however.

For example, some believe that prioritization should be permitted if access to the priority service is open to all content and applications providers on equal terms; that is, without regard to the identity of the content or application provider.

Opponents of network neutrality regulation include, among others, some facilities-based wireline and wireless network operators and other commentators. They maintain that net neutrality regulation will impede investment in the facilities necessary to upgrade Internet access and may hamper technical innovation. They also argue that the sorts of blocking conduct described by net neutrality proponents are mainly hypothetical thus far and are unlikely to be widespread and thus are insufficient to justify a new, ex ante regulatory regime.

Principally, opponents of net neutrality regulation argue that: (1) neutrality regulations would set in stone the status quo, precluding further technical and businessmodel innovation; (2) effective network management practices require some data prioritization and may require certain content, applications, or attached devices to be blocked altogether; (3) new content and applications are likely to require prioritization and other forms of network intelligence; (4) allowing network operators to innovate freely and differentiate their networks permits competition that is likely to promote enhanced service offerings; (5) prohibiting price differentiation would reduce incentives for network investment generally and may prevent pricing and service models more advantageous to marginal consumers; (6) vertical integration by network operators into content and applications and certain bundling practices may benefit consumers; and (7) there is insufficient evidence of either the likelihood or severity of potential harms to justify an entirely new regulatory regime, especially given that competition is robust and intensifying and the market generally is characterized by rapid technological change. Competing Concerns about Integration and Differentiation
Proponents of net neutrality regulation have raised various concerns about the effects of data or price differentiation in broadband markets.15 Certain of these concerns are tied to vertical integration (broadly construed), as broadband Internet access providers have begun to offer online content and applications in addition to their primary access services. Other concerns are independent of such integration. In particular, proponents are concerned that vertical integration by Internet access providers into content and applications markets could prompt them to block, degrade, or charge higher prices to competing content or applications. New information technologies, such as deep packet inspection, may allow network operators to identify the source and content of much of the data traffic they handle. Hence, a broadband provider with significant market power in a given access market, which has an interest in content or applications generally, could have an incentive to block or degrade competing content or applications.
Independent of market power considerations, some net neutrality proponents have raised concerns about the so-called “terminating access monopoly problem,” which could result from broadband Internet access providers charging content or applications providers terminating fees for delivery to end users over the last mile. Some proponents also have expressed concern that if broadband providers are allowed to sign exclusive deals with content or applications providers, end users may be unable to access much of the content they desire, thus “balkanizing” the Internet.

On the other hand, because vertical integration may offer efficiencies that are procompetitive and pro-consumer, not all vertical integration is problematic. More particularly, opponents of net neutrality regulation maintain that some degree of vertical integration by Internet access providers into content and applications may facilitate investment in infrastructure, investment in content or applications, optimization of fit between content and delivery systems, and pricing benefits for consumers. They assert that such vertical integration also may facilitate entry and thereby increase competition in broadband Internet access markets. Further, the incentives of broadband providers may cut both ways: for example, despite potentially having an incentive to favor affiliated content and applications, access providers have argued that they have an interest in providing access to a wide range of content and applications, which are essential complements to the services they sell.

As is the case with data discrimination, it is impossible to determine in the abstract whether allowing content and applications providers (or even end users) to pay broadband providers for prioritized data transmission will be beneficial or harmful to consumer welfare.16 Such prioritization may provide benefits, such as increased investment and innovation in networks and improved quality of certain content and applications that require higher-quality data transmission, as net neutrality opponents claim.

Network neutrality proponents have raised concerns, however, regarding potential adverse effects of data prioritization, including, among others: (1) a diminution in innovation by content and applications providers – particularly those unable to pay for prioritization; (2) the intentional or passive degradation of non prioritized data delivery; and (3) increased transaction costs resulting from negotiations between broadband providers and content and applications providers over prioritization.

The balance between competing incentives on the part of broadband providers to engage in, and the potential benefits and harms from, discrimination and differentiation in the broadband area raise complex empirical questions and may call for substantial additional study of the market generally, of local markets, or of particular transactions.

Again, further evidence of particular conduct would be useful for assessing both the likelihood and severity of any potential harm from such conduct.

Present and Future Broadband Competition(17)

Proponents and opponents of net neutrality regulation have fundamentally different views on the present (and likely future) state of competition in the broadband industry. Proponents argue either that a national market for broadband Internet access is, in effect, a cable-telephone duopoly or that there are significant failures of competition in many local markets. Opponents characterize the market as highly competitive.
Broadband Internet access generally is a relatively new industry characterized by high levels of demand growth from consumers, high market shares held by incumbent cable and telephone providers, and many new entrants trying to capture some share of the market.FTC staff did not conduct independent empirical research regarding competition in local broadband Internet access markets for the purposes of this Report. We note that opponents of net neutrality regulation have pointed to evidence on a national scale that (1) access speeds are increasing, (2) prices (particularly speed-adjusted or qualityadjusted prices) are falling, and (3) new entrants, including wireless and other competitors, are poised to challenge the incumbent cable and telephone companies. We note, too, that statistical research conducted by the FCC has tended to confirm these general trends.(18)
For example, broadband deployment and penetration have increased dramatically since 2000. The FCC estimated that by 2006, broadband DSL service was available to 79 percent of the households that were served by a telephone company, and cable modem service was available to 93 percent of the households to which cable companies could provide cable television service.(19)

Jurisdiction and the Application of Antitrust Law

The competitive issues raised in the debate over network neutrality regulation are not new to antitrust law, which is well-equipped to analyze potential conduct and business arrangements involving broadband Internet access. The antitrust laws are grounded in the principle that competition serves to protect consumer welfare. In conducting an antitrust analysis, then, the ultimate issue would be whether broadband providers engage in unilateral or joint conduct that is likely to harm competition and consumers in a relevant market.
Many proponents of net neutrality regulation are concerned that broadband Internet access suppliers have market power in the last-mile access market and that they will leverage that power into adjacent content and applications markets in a way that will harm competition in those markets and, ultimately, consumers. Such leveraging may take the form of exclusive dealing arrangements, refusals to deal, vertical integration, or certain unilateral conduct. All of these types of conduct can be anticompetitive and harmful to consumers under certain conditions. They also, however, can be procompetitive, capable of improving efficiency and consumer welfare, which involves, among other things, the prices that consumers pay, the quality of goods and services offered, and the choices that are available in the marketplace. Accordingly, such conduct would be analyzed under the antitrust laws to determine the net effect of such conduct on consumer welfare.

There nonetheless remains significant disagreement with respect to the adequacy of existing agency oversight. Some proponents of net neutrality regulation have argued that existing laws, regulations, and agency oversight are inadequate to safeguard competition in broadband Internet access markets. Those opposed to net neutrality regulation, however, have argued that current competition law is adequate, that careful rule-of-reason application of the law is critical to the preservation of competition, and that additional regulations likely would be over-intrusive and, on balance, a burden to vibrant competition in broadband markets.

Consumer Protection Issues

Effective consumer protection in the broadband marketplace is essential to robust competition in that market – regardless of the outcome of the current broadband connectivity debate. The FTC has been active in enforcing relevant consumer protection law, bringing a variety of cases against ISPs that have engaged in allegedly deceptive marketing and billing practices. The Workshop highlighted various consumer protection concerns. Several Workshop participants argued that such concerns were best addressed under FTC jurisdiction, given the FTC’s statutory mandate, its interest and experience in consumer protection issues generally, and its interest and experience in consumer protection aspects of various Internet services in particular.

Internet access implicates two broad areas of consumer protection: (1) clear and conspicuous disclosure of material terms of Internet access services; and (2) security and privacy issues created by broadband Internet access services. Current federal consumer protection law can address both sets of concerns, although consumer protection issues in the broadband marketplace may present unique technical and jurisdictional challenges, both to consumers and law enforcement agencies. Commentators within and without the Workshop have suggested that federal law enforcement fruitfully could be augmented by industry self-regulation and expanded federal guidance on pertinent issues.

Suggested Guiding Principles

The FTC’s Internet Access Task Force has conducted a broad examination of the technical, legal, and economic issues underpinning the debate surrounding broadband connectivity competition policy. Based on this examination, as well as our experience with the operation of myriad markets throughout the economy, we identify guiding principles that policy makers should consider in evaluating options in the area of broadband Internet access.(20)

We have provided an explanation of the conduct that the antitrust and consumer protection laws already proscribe and a framework for analyzing which conduct may foster or impede competition in particular circumstances. In evaluating whether new proscriptions are necessary, we advise proceeding with caution before enacting broad, ex ante restrictions in an unsettled, dynamic environment.

There is evidence that the broadband Internet access industry is moving in the direction of more, not less, competition, including fast growth, declining prices for higher-quality service, and the current market-leading technology (i.e., cable modem) losing share to the more recently deregulated major alternative (i.e., DSL). We nonetheless recognize that not every local broadband market in the United States may enjoy vigorous competition.(21) This Report does not reflect a case-by-case analysis of the state of competition in each of the localities that may represent relevant antitrust markets.

There also appears to be substantial agreement on the part of both proponents and opponents of net neutrality regulation that greater competition in the area of broadband Internet access would benefit consumers. Thus, to the extent that policy makers are not
content to wait for the market to increase competition, they should consider pursuing various ways of increasing competition in the provision of broadband Internet access.

Based on what we have learned through our examination of broadband connectivity issues and our experience with antitrust and consumer protection issues more generally, they recommend that policy makers proceed with caution in evaluating proposals to enact regulation in the area of broadband Internet access. The primary reason for caution is simply that we do not know what the net effects of potential conduct by broadband providers will be on all consumers, including, among other things, the prices that consumers may pay for Internet access, the quality of Internet access and other services that will be offered, and the choices of content and applications that may be available to consumers in the marketplace.
With respect to data discrimination, broadband providers have conflicting incentives relating to blockage of and discrimination against data from non-affiliated providers of content and applications.(22)

In the abstract, it is impossible to know which of these incentives would prove stronger for each broadband provider. Further, even assuming such discrimination were to take place, it is unknown whether the net effect on consumer welfare would be adverse.

Likewise, it is not possible to know in the abstract whether allowing content and applications providers to pay broadband providers for prioritized data transmission will be beneficial or harmful to consumers.(23)

Several open questions that likely will be answered by either the operation of the current marketplace or technological developments provide additional reasons for caution. These questions include, among others:
1 How much demand will there be from content and applications providers for data prioritization?;
2 Will effective data prioritization, throughout the many networks comprising the Internet, be feasible?;
3Would allowing broadband providers to practice data prioritization necessarily result in the degradation of non-prioritized data delivery?; 4 When will the capacity limitations of the networks comprising the Internet result in unmanageable or unacceptable levels of congestion?; and
5 If that point is reached, what will be the most efficient response thereto: data prioritization, capacity increases, a combination of these, or some as yet unknown technological innovation?

The eventual answers to these questions may give policy makers key information about the net effects on consumer welfare arising from the conduct and business arrangements that network neutrality regulation would prohibit or limit.
Policy makers also should carefully consider the potentially adverse and unintended effects of regulation in the area of broadband Internet access before enacting any such regulation. Industry-wide regulatory schemes – particularly those imposing general, one-size-fits-all restraints on business conduct – may well have adverse effects
on consumer welfare, despite the good intentions of their proponents. Even if regulation does not have adverse effects on consumer welfare in the short term, it may nonetheless be welfare-reducing in the long term, particularly in terms of product and service innovation.

Further, such regulatory schemes inevitably will have unintended consequences, some of which may not be known until far into the future. Once a regulatory regime is in place, moreover, it may be difficult or impossible to undo its effects.
Two aspects of the broadband Internet access industry heighten the concerns raised by regulation generally. First, the broadband industry is relatively young and dynamic, and, as noted above, there are indications that it is moving in the direction of more competition. Second, to date we are unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers. Policy makers should be wary of enacting regulation solely to prevent prospective harm to consumer welfare, particularly given the indeterminate effects that potential conduct by broadband providers may have on such welfare.
The federal antitrust agencies, the FTC and the DOJ, and the FCC share jurisdiction over broadband Internet access, with each playing an important role in protecting competition and consumers in this area. Further, as a byproduct of the ongoing debate over network neutrality regulation, the agencies have a heightened awareness of the potential consumer harms from certain conduct by, and business arrangements involving, broadband providers. Perhaps equally important, many consumers are now aware of such issues. Consumers – particularly online consumers – have a powerful collective voice. In the area of broadband Internet access, they have revealed a strong preference for the current open access to Internet content and applications.
The FTC has been involved in the Internet access area for over a decade and will continue to be involved in the evolving area of broadband access. The FTC Act is sufficiently flexible to allow the FTC to enforce the antitrust and consumer protection laws in most industries, including those involving new and ever-changing technologies.
The fundamental principles of antitrust and consumer protection law and economics that they have applied for years are as relevant to the broadband industry as they are to other industries in our economy.

The FTC will continue to devote substantial resources to maintaining competition and protecting consumers in the area of broadband Internet access, using a variety of tools. The FTC will continue to enforce the antitrust and consumer protection laws in evaluating conduct and business arrangements involving broadband access.

Further, the
FTC’s Broadband Connectivity Competition Policy Workshop and this Report exemplify some of the diverse resources the agency may bring to bear on Internet access issues, in addition to specific law enforcement actions. The Workshop and Report reflect the agency’s interest in and commitment to developing competition and consumer protection policy. Finally, the agency will continue to expend considerable efforts at consumer education, industry guidance, and competition advocacy in the important area of Internet access.

References:

1 As discussed in more detail in Chapter I of this Report, the term “Internet” is commonly used to refer to the decentralized, interconnected network of computer networks that allows computers to communicate with each other. Individual networks are owned and administered by a variety of organizations, such as private companies, universities, research labs, government agencies, and municipalities.
2 The terms “net neutrality” and “network neutrality” have been used to identify various policy concerns and prescriptions raised by diverse parties to the larger social discussion of broadband Internet connectivity. Typically, such terms are identified with positions that recommend, at least, some legal or regulatory restrictions on broadband Internet access services that include non-discrimination requirements above and beyond any that may be implied by existing antitrust law or Federal Communications Commission (“FCC”) regulations. Particular concerns and positions are explored in some detail throughout the Report, but the terms “net neutrality” and “network neutrality” are used here, interchangeably, to refer to this larger family of views. Unless otherwise clarified, our terminological choice is not meant to endorse any particular policy position.
3 See Deborah Platt Majoras, Chairman, FTC, Luncheon Address, The Progress & Freedom Foundation’s Aspen Summit, The Federal Trade Commission in the Online World: Promoting Competition and Protecting Consumers (Aug. 21, 2006), available at http://ftc.gov/speeches/majoras/060821pffaspenfinal.pdf.
4 The agenda, transcript, public comments, and other information relating to the Workshop are available on the FTC’s Web site at http://www.ftc.gov/opp/workshops/broadband/index.shtm. In addition, Appendix 1 to this Report provides the identity and affiliation of the Workshop participants. Throughout this Report, citations to “Public Comments” refer to comments submitted to the FTC in response to its request for public comments on the topics addressed at the Workshop. In addition, citations to “Tr.” refer to the Workshop transcript, which is comprised of two volumes. Volume I corresponds to the proceedings on February 13, 2007; Volume II corresponds to the proceedings on February 14, 2007. Speakers are identified by last name. Finally, citations to “Participant Presentations” refer to presentations, including slide presentations and commentary, provided by Workshop participants.

5 Appendix 2 to this Report provides a glossary of acronyms that are frequently used herein.
6 In this Report, we also refer to broadband ISPs as “broadband providers” and “access providers.”
7 See infra Chapters II and IX.A for discussion of various jurisdictional issues.
8 47 U.S.C. §§ 151 et seq.

9 15 U.S.C. §§ 41 et seq.
10 See, e.g., Am. Online, Inc. & Time Warner, Inc., FTC Dkt. No. C-3989 (Dec. 17, 2000) (complaint), available at http://www.ftc.gov/os/2000/12/aolcomplaint.pdf

See infra Chapters II and IX for discussion of FCC, FTC, and DOJ scrutiny of mergers in the area of broadband Internet access.
11 See, e.g., Am. Online, Inc. & CompuServe Interactive Servs., Inc., FTC Dkt. No. C-4105 (Jan. 28, 2004) (decision and order), available at http://www.ftc.gov/os/caselist/0023000/040203aolcsdo.pdf; Juno Online Servs., Inc., FTC Dkt. No. C-4016 (June 29, 2001) (decision and order), available at
http://www.ftc.gov/os/2001/06/junodo.pdf
12 Particular rulemaking and other administrative decisions along these lines are discussed in more detail in Chapters II and IX, infra. 13 545 U.S. 967 (2005).

14 See, e.g., Mercatus Center, Public Comment 27, at 10 (“If the desired outcome is that anyone willing to pay the monthly price for Internet access can communicate with others at some minimum speed, then a policy that promotes ‘neutral’ treatment of everyone on the network may be appropriate. But if the desired outcome is to have as many people as possible connected to the Internet so they can speak if they so choose, then a different policy, aimed at reducing the consumer’s total cost of Internet access as well as usage, may be most effective, even if it does not mandate ‘neutrality.’”); Feld, Tr. II at 75 (“It is a question about balancing. . . . I can say that something does introduce a certain amount of economic inefficiency and it is still extraordinarily valuable for the contribution that it gives to us as a society, as a democracy . . . I would argue that is something we should be willing to consider.”).
15 See infra Chapters IV and V for more detailed discussion of data differentiation and price differentiation, respectively.
16 See infra Chapter V.
17 Broadband competition issues are discussed throughout this Report, particularly in Chapters VI and VII.
18 See, e.g., FCC, HIGH-SPEED SERVICES FOR INTERNET ACCESS: STATUS AS OF JUNE 30, 2006 (2007) [hereinafter FCC, HIGH-SPEED SERVICES], available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-270128A1.doc
Although some have questioned whether the methodology used in compiling this data allows the FCC to provide a reliable analysis of competition in particular markets, the FCC data does provide an overall picture of the significant growth in broadband penetration over the past few years.
19 See, e.g., id. at 2-4, 5 tbl.1, 6 tbl.2, 7 tbl.3, 19 tbl.14.
21 See infra Chapter VI.B.
22 See infra Chapter IV.
23 See infra Chapter V.

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