By Betsy Brady, AT&T Assistant Vice President of Federal Relations
Next month, the Federal Trade Commission (FTC) will kick off its planned Hearings on Competition and Consumer Protection in the 21st Century. The timing is auspicious. Now that the FTC once again oversees the entire internet ecosystem, including broadband internet service providers (ISPs), it should pursue two overarching objectives.
The Commission should use its authority to 1) create a level playing field by harmonizing the competition and consumer protection frameworks for all participants in the internet marketplace, and 2) drive regulatory consistency and predictability to benefit competition and consumers through more investment and innovation.
Let’s briefly unpack these objectives. With the rise of competition and convergence, there is no longer any empirical justification for ISP-only rules concerning privacy, “nondiscrimination,” or any other topic of regulatory concern. To the contrary, ISP-specific regulatory burdens would harm consumers by weakening much-needed competition in markets now dominated by a handful of online giants.
For many years, Federal Communications Commission (FCC)-focused interest groups have sought to justify such asymmetric regulation on the premise that ISPs have greater visibility into online user behavior than so called “edge” providers. That premise stands reality on its head. First, the now-pervasive use of encryption blinds ISPs but not the operators of browsers, operating systems and social networks to most of a given user’s online activities. Those “edge” providers also typically have continuous visibility into a user’s activities, whereas any given user typically shifts from one ISP to another (home, cellular, office) during the course of a day.
It is well documented that investment and innovation thrive best when the regulatory rules of the road are specific and known so strategic decisions can be made accordingly. Investment and innovation, and ultimately consumers, suffer when regulators ignore the realities of the marketplace and maintain inconsistent and vague rules, or impose unexpected new restrictions.
It is also essential that any rules that will impact the internet or internet services not be articulated via a patchwork of unique state-by-state regulations like we currently see emerging. We therefore encourage the FTC to work with Congress to enact federal legislation that reinforces the Commission’s leadership role in this area and ensures any privacy rules are national in nature and consistently applied to all internet companies.
Finally, I want to briefly turn to the issues posed by the FTC regarding antitrust and merger analysis. The Commission should remain a champion of consumer interests. For several decades now, American antitrust law has benefited from sound economic analysis of consumer welfare. The focus on consumer welfare is a key reason why America has such a vibrant and innovative economy today – and why the world’s technology leaders are headquartered in the United States. The Commission should thus reject proposals to revert to the more nebulous antitrust doctrine of the mid-twentieth century, which sought to protect competitors at the expense of innovation and consumers.
Criticism of the consumer welfare standard should be seen for what it is: a well-intentioned but analytically unsound movement that, if applied, would harm consumers and threaten America’s status as the world leader in innovation. Relatedly, any updated vertical merger guidelines should reflect the broad economic consensus that vertical mergers are usually procompetitive.
In our comments filed today, we expand on these objectives and on the various other issues posed by the Commission’s June 20 Notice. We look forward to working with the FTC as the hearings unfold and the Commission starts the work of formulating a set of rules for the digital road appropriate for the 21st Century.