Type I vs Type II errors: Antitrust lessons for communications policy

[Commentary] Around the world, sector-specific regulation of communications markets is being phased out. This shift away from sector-specific regulation seems most appropriate in markets that are defined by dynamic innovation and some measurable degree of competition -- the reason for this being that the cost of making a Type I error are higher (stopping or slowing procompetitive innovation), but the cost of making a Type II error is lower (because these errors can often be mitigated by natural market forces or standard antitrust law) in competitive markets. In the view of the particular European governments discussed in this post by Roslyn Layton, Internet consumers are best protected when government minimizes Type I errors even if this means Type II errors might increase in the short-run. The view that Type I and Type II errors should be considered by regulators has been echoed by Federal Communications Commission Chairman Tom Wheeler.

This claim raises two questions:

1. To what extent is FCC jurisdiction limited and
2. Would Title II really assist consumers?

[Boliek is an associate professor of law at Pepperdine University School of Law]