Competition/Antitrust

The Federal Communications Commission’s nearly decade-old program, Measuring Broadband America, is the US government’s gauge of whether home internet-service providers are holding up their end of the bargain when they promise users certain speeds. Companies wield tremendous influence over the study and often employ tactics to boost their scores, according to interviews with more than two dozen industry executives, engineers and government officials.

My theme today – what is going unnoticed. Simply put, we should pay more attention to the lack of competition in the provision of fixed broadband to homes and small businesses. As a general matter, we can expect people with only one choice to pay monopoly prices, and people with only two to pay the higher prices typically charged by duopolies. People with three or more choices typically pay less. Clearly, people who can barely afford to pay a competitive price, say, low-income Americans, are particularly vulnerable to artificially high prices.

5G isn’t just an upgraded version of 4G. 5G’s performance characteristics and how it is built blur the distinctions between wired and wireless industries. 5G will enable more choice as previously siloed industries compete, which we know will decrease prices and improve quality. In performing a competition analysis, it would be a mistake to look backwards at the wireless industry as it is constituted today. The lesson for competition authorities should be this: Technology is now creating and disrupting on shorter and shorter cycles.

In 2013, 17 percent of consumers in both China and the US had access to a fiber internet connection. Fast forward to 2019, China’s penetration has jumped to 86 percent while the US is only at 25 percent. While America continues to suffer from an immense digital divide, China’s government has made incredible progress building out a state-sponsored super network of fiber optic connections. Despite the constant posturing and discussion about the importance of fiber, the US has not been effective at deploying a nationwide fiber optical network. Why is this?

The Federal Communications Commission's Orwellian-named “Restoring Internet Freedom” order all-but obliterated the FCC’s authority to hold broadband internet access providers accountable for any number of bad behaviors.

The Great One, Wayne Gretzky, warned us against this status quo bias. The secret to his legendary success on the ice was to “skate to where the puck is going, not where it has been.” The Gretzky Test is popular in sports and in business now, and I think competition authorities—and especially those of us in tech and telecom regulation—should hold ourselves to it, too. The Federal Communications Commission has not always met that test. For too long, too many at the FCC sought to preserve the status quo, thinking that doing so could only benefit the Americans we serve. The FCC was wrong.

In recent weeks, members of the U.S. Congress have announced a number of broadband-related bills that aim to ensure that local communities have a better chance of delivering high-speed Internet to their residents. But would these acts, if passed, lead to meaningful results? Government Technology spoke to a number of leaders and experts about the implications of three particular pieces of legislation. Their differing opinions highlight the great complexity of the broadband issue.

The telecommunications industry lost and consumers won in a Connecticut Superior Court decision that gives cities and towns the right to use existing utility infrastructure within their borders to create municipal networks that deliver cheap, fast internet service to homes and businesses.

The largest cable and telephone providers in the US – representing about 96% of the market – acquired about 605,000 net additional broadband Internet subscribers in 3Q 2019, compared to a pro forma gain of about 600,000 subscribers in 3Q 2018. These top broadband providers now account for about 100.6 million subscribers, with top cable companies having 67.1 million broadband subscribers, and top telephone companies having 33.5 million subscribers. Findings for the quarter include:

Makan Delrahim, the Justice Department’s top antitrust enforcer, warned tech giants that amassing vast quantities of consumers’ data could create competition concerns in the eyes of federal regulators, marking the US government’s latest shot across the bow at Silicon Valley.