Jon Sallet

Home broadband subscription rates continue to lag in rural areas, holding back local economies and access to telemedicine. The deployment of broadband networks to rural areas echoes the challenges earlier generations had ensuring that electrical networks and telephone service reached everyone. The solutions those earlier generations employed provide us lessons for today’s broadband challenges. Through the 1930s, many power companies ignored rural areas of the nation even when the federal government offered loans to serve these sparsely populated areas.

A white paper written by Jonathan Sallet on behalf of Benton Foundation & EducationSuperHighway offering tangible steps that the Federal Communications Commission should take to instruct the Universal Service Administrative Company on how best to speed the approval of E-Rate projects that meet the legal requirements of the Telecommunications Act. The issues may seem arcane, bureaucratic, and/or legalistic. But they are important for two interlocking reasons.

Each of these themes runs through the topic of these remarks: how the law, as I have seen it develop at the Antitrust Division and the Federal Communications Commission, has and can create and protect economic opportunity in the marketplace of broadband Internet access services provided to individual consumers. I’d like to structure this discussion around four primary themes:

First, competition is the best driver of innovation and consumer benefits in the Internet ecosystem; that ecosystem in which broadband connectivity is a critical component. Thus it is important to understand the state of competition, especially in those high speed connections that provide today the platform for so many complementary services provided by what we now call “the edge.”

Second, both antitrust law and public policy must rest upon a sound understanding of the incentives and abilities of broadband providers to artificially shape competition not only in the markets for residential Internet access but also in complementary markets across the Internet ecosystem. Here it is valuable to reflect upon the decades-long conclusion that telecommunications networks hold gatekeeper power that can be used to threaten competition.

Third, government should protect competition from artificial constraint that injures consumers and, especially in dynamic markets, threatens the future of innovation. The shared, overlapping jurisdiction of the FCC and the division focuses on the review of telecommunications mergers. Such reviews should be carried out always with a clear- eyed vision of the impact of market conditions on consumers today and innovation tomorrow.

Finally, the FCC has determined that an Open Internet advances economic and social goals so important that they must be preserved in the face of both obvious and subtle threats; threats that have long-been identified as well as those that are nascent or novel.

Three points about the Federal Communications Commission’s review of transactions are important to understand:

First, the nature of the substantive review that Congress has instructed the FCC to apply. Second, the process that the FCC has instituted, consistent with that statutory standard, to provide an open and fair means of reviewing transactions. Third, the manner in which the complementary approaches of the Commission and the antitrust agencies work harmoniously to serve the public interest in a sector that has traditionally been the subject of careful governmental scrutiny.

I believe that the Federal Communications Commission's actions should be informed by competition principles. These principles look to the impact of practices on consumers and the public interest, not just on competitors. But, the "public interest" standard is not limited to purely economic outcomes. It necessarily encompasses the "broad aims of the Communications Act," which include, among other things, a deeply rooted preference for preserving and enhancing competition in relevant markets, accelerating private-sector deployment of advanced services, ensuring a diversity of information sources and services to the public, and generally managing spectrum in the public interest.