AT&T Didn't Violate Antitrust Laws In Wholesale DSL Pricing

from the really? dept

Well, this is certainly interesting. Just as the US government seems to be hinting at the possibility of declaring Google a monopoly, the Supreme Court has overturned a lower court ruling on whether or not AT&T violated antitrust laws in pricing its wholesale DSL lines at a price above its retail rates (i.e., other DSL providers could resell AT&T DSL lines, but they would have to price them significantly higher than AT&T or lose money). The Supreme Court has now said that it’s not an antitrust violation to have priced line sharing in this manner.

I can certainly see the arguments for both sides in this ruling. In theory, AT&T should have the right to price its offerings wherever it wants. But, that ignores that AT&T does have a monopoly in terms of government granted rights-of-way and subsidies, such that no other provider can realistically compete without similar government benefits. This isn’t because AT&T grew into a monopoly, but because the government granted them those rights and subsidies. In the end, though, as much as I think we should encourage competition via line sharing, I think the Supreme Court made the right decision, in realizing that this isn’t an antitrust issue, but a regulatory issue. When the gov’t granted AT&T rights of way and subsidies, it could have (and probably should have) extracted certain requirements concerning line sharing. In not doing so, it implicitly allowed AT&T to price such line sharing at whatever ridiculous rates AT&T wanted. The solution isn’t via an antitrust lawsuit as it is in making sure that granting such rights of way and subsidies comes with reasonable line sharing rules.

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Companies: at&t

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Comments on “AT&T Didn't Violate Antitrust Laws In Wholesale DSL Pricing”

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Michael (profile) says:

Natural Monopoly / Public Infrastructure

Roads, pipes, power and data lines. All of them are ‘network’ or grid technologies. It is inherently obvious that the publics interest is best served by having one, at most two (a good backup), infrastructures of each type of delivery technology. Said infrastructure should be owned by the public, and access to that first connection a community cost (at some level the public agrees on).

Alternate providers could improve service, or offer additional products on top of said network.

This would be much like the way on the air and Satellite TV work. Both are radio wave based services, and both use allocations of the ‘media’ from the government, but one is ‘free’ while the other is an upgrade.

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