10 questions for those questioning if competition policy works

October 5, 2009

Both the FCC and FTC Chairmen appear to be suggesting that the current fifteen-year competition policy experiment in law to promote competition and reduce regulation in communications will ultimately fail — requiring new preemptive common-carrier-like nondiscrimination regulation of ISPs to preserve a free and open Internet.
 
  • In his September 21st speech, FCC Chairman Julius Genachowski’s first reason justifying the need for preemptive new FCC net neutrality regulations was limited ISP competition:
    • One reason has to do with limited competition among service providers. As American consumers make the shift from dial-up to broadband, their choice of providers has narrowed substantially. I don’t intend that remark as a policy conclusion or criticism — it is simply a fact about today’s marketplace that we must acknowledge and incorporate into our policymaking.”
  • FTC Chairman Jon Leibowitz, in a 10-4-09 letter to the editor of the Washington Post in response to the Post’s editorial, “The FCC’s Heavy Hand,” said:
    • If robust competition existed among broadband providers, they could have incentives to offer all the content and applications their customers want, regardless of whether it orginated with a competitor. But that competition does not exist now. Most consumers have a choice of only one or two broadband providers, and consumers have not yet substituted wireless service for broadband access provided by cable or telephone companies to any great extent. In the absence of vigorous competition, some rules may be necessary.”
  • 10 important questions for those questioning if competition policy works:

    1. Is current bipartisan U.S. communications competition policy succeeding or failing and on what measures?
    2. Is preserving the status quo of Internet openness more important than preserving the status quo competitive dynamics of: falling prices, increased consumer value/choice, and more network investment/deployment, network speed/capacity, user mobility, and smart network innovation?
    3. If it was good policy when Clinton Adminstration FCC Chairman Kennard declined to apply open access/nondiscrimination requirements on cable modems in 1999 before any material broadband competition had developed, why would it not still be good policy when ~40m Americans get cable broadband service, ~30m get DSL service, ~73m get mobile high speed service, ~3m get fiber broadband, and ~1m get satellite broadband service?
    4. If the most facilities-based broadband competition in the world is not enough broadband competition, how much would be and why?
    5. Are American consumers better or worse off since the FCC ruled broadband an unregulated information service in 2005?
    6. If wireless is not yet considered an Internet access competitor to cable/DSL/fiber, what’s the competitive justification for applying Internet access net neutrality rules to wireless?
    7. If more Americans access the Internet over wireless broadband than any other access technology, why is wireless broadband not yet considered a competitor to other Internet access technologies?
    8. Is it easier to assert that wireline broadband and wireless broadband are each not competitive if one also asserts that wireline and wireless broadband providers don’t compete?
    9. If the FCC/FTC Chairmen now believe that the current competition can’t ensure openness, only regulation can, is there anything that regulation cannot ensure that only competition can?
    10. What evidence or experience indicates that regulation can outperform competition in serving consumers’ full and increasing diversity of demands?
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