Internet Access and Competition Policy

The Department of Justice weighed in on the net neutrality debate and filed ex parte comments with the FCC, In re: Broadband Industry Practices, suggesting that the FCC “should be highly skeptical of calls to substitute special economic regulation of the Internet for free and open competition enforced by the antitrust laws.” The filing argues in favor of avoiding regulation and letting the market sort things out.
Letting the market sort out broadband internet access might be less than optimal public policy, if the market for broadband access is not competitive.
When broadband providers have market power in a local market, it creates the possibility for those providers to discriminate against content creators.
In a recent ISP Planet reports, Top 21 U.S. ISPs by Subscriber: Q2 2007, the top 5 providers nationally (SBC, Comcast, AOL, Verizon, Roadrunnner) accounted for 56.5 percent of the total market.
But on a local basis, each local market may be even less competitive. A Consumer Reports survey found that in many markets, there is no competition for broadband service, “The consumer broadband market has been a seller’s market, often limited to a single provider. Our survey underscored the lack of choice: Of readers who used any type of broadband service, 22 percent said they had chosen their type because it was the only broadband option available.”
Unlike in other contexts, in telecommunications, does deregulation not encourage competition? Is local broadband service more competitive than sources for organic food?
More links:
Frank Pasquale, Concurring Opinions, Questionable Advice On Net Neutrality: “The DOJ Antitrust Division’s just-released public comment on net neutrality (available here) has been getting a lot of press. Unfortunately, it appears that the shoddy analysis that Jack Goldsmith saw in the DOJ’s torture memos may also be infecting its approach to net neutrality.”
Brett Frischmann and Barbara Van Schewick, Network Neutrality and the Economics of an Information Superhighway: A Reply to Professor Yoo: “Network neutrality has received a great deal of attention recently, not just from legal academics and telecommunications experts, but from our elected representatives, the relevant agencies and the press. Our representatives have held multiple hearings on network neutrality and are actively considering whether to include a provision aimed at preserving network neutrality in pending telecommunications reform legislation. The Federal Communications Commission and the Federal Trade Commission are also considering the issue. The press has been drawn to the debate by declarations that the fate of the Internet as we know it is at stake.”
And some coverage of net neutrality issues at the Future of Music Policy Summit:
News.com, Senator: Net neutrality push ain’t over yet “Some people say, well, but it’s a competitive marketplace, if one of the big interests tries to charge for its pipes..the customer will go elsewhere, it’s a competitive world,” Dorgan said. “Well, I’ll tell you what, you’re studying different economics than I am if you think this is competitive
FMC Summit Policy blog: Leveling the Playing Field: how does broadband policy affect musicians?