Regulation as a Manageable Cost Center: The Example of Network Neutrality and the AT&T Acquistion of Time Warner

[Commentary] Moving in for the kill, incumbent carriers have stretched their home team advantage.  With millions in lobbying, campaign contributions and sponsored research, along with a like-minded Federal Communications Commission majority, the unpleasantness of the prior 8 year Obama stretch largely will evaporate very quickly. Money well spent. Rather than frame regulatory debates in terms of midlevel issues of economic theory and political philosophy, think lower tier: cold hard cash money. Follow the money. Regulation impedes businesses like AT&T and Verizon from achieving even greater profitability, unless of course a captive regulator can be persuaded to tilt the competitive playing field by disadvantaging one or more competitors. Incumbents have convinced decision makers that when regulation prevents profit maximizing behavior, there better be a damn good reason.  Notions of equity and level competitive playing fields will not suffice even though the advocates for deregulation do not have to meet a similar burden when claiming existing rules “stifle innovation” and “kill jobs.” The incumbent camp waxes poetic how regulation has preempted billions in investment, hurt employment and reduced innovation. But how can they prove this?  Answer: they don’t have to.

[Rob Frieden serves as Pioneers Chair and Professor of Telecommunications and Law at Penn State University.]