Court Rules It's Fine If FCC Wants To Deem Just One Available ISP As 'Competition'

from the nothing-to-see-here dept

So we’ve long discussed how the FCC (often under both parties) has a long and troubled history of ignoring the obvious competition problems in the United States broadband market. From the FCC’s $300 million broadband map that avoids mentioning prices and hallucinates competition and speeds, to the agency’s long-standing (and absurd) belief that just one connection in a census tract means the entire area is “served,” the government has gone to great lengths to help deep-pocketed telecom campaign contributors mask the width and depth of a problem that’s painfully obvious to U.S. consumers.

Under the Ajit Pai FCC, this rose-colored glasses approach to data has only, unsurprisingly, intensified. The Pai FCC has been engaged in all manner of efforts to lower the definition of broadband in order to make it appear that residential broadband is more uniformly deployed than in actually is. That effort has been equally present in the even less competitive broadband business and special access market, where just a few ISPs hold regional monopolies over the high-speed lines connecting everything from cellular towers to your local ATM.

When Ajit Pai came to power at the FCC, he immediately got to work scrapping previous FCC efforts to make this market more competitive. That included modifying the very definition of “competition.” Under the revised Pai FCC language, countless markets were suddenly deemed “competitive” if businesses had access to just one broadband provider. In response, impacted competitors and consumer groups filed an amicus curiae brief (pdf) urging the US Court of Appeals for the Eighth Circuit to vacate the FCC’s rule changes.

That effort hasn’t gone particularly well. This week, the court upheld the FCC’s decision to declare a market “competitive” if there’s just one ISP available to service it. From the ruling (pdf):

“We recognize that the relevant data presents radically different pictures of the competitiveness of the market depending on the economic theory applied and the weight given to conflicting pieces of evidence. But the FCC may rationally choose which evidence to believe among conflicting evidence in its proceedings, especially when predicting what will happen in the markets under its jurisdiction. Thus, we deny the petitions for review as to the Competitive Market Test because the FCC’s resolution of competing evidence was not arbitrary and capricious.”

That’s not to say what the FCC is doing is good, just that it’s within the FCC’s authority to pick and choose between available sets of facts when crafting policy.

The fact remains that the Ajit Pai FCC has been happily fiddling with available data to try and downplay the competitive problems in the sector, in stark contrast to Pai’s routinely hollow rhetoric about how closing the digital divide and helping sad, rural farmers is his top priority. After all, if you can twist the data until it shows U.S. residential broadband and business broadband markets are super competitive, it’s slightly easier to justify your decision to refuse to do anything to actually fix it. Either way, it’s a favor incumbent BDS monopolies like Verizon, AT&T and CenturyLink surely appreciate.

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Comments on “Court Rules It's Fine If FCC Wants To Deem Just One Available ISP As 'Competition'”

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39 Comments
Anonymous Coward says:

Re: Re:

Yet the people who vote for the GOP still believe they are being actively and passionately represented by their congressman.

They refuse to think they voted for a person who will actively go against his promises. That their congressperson could be dirty, or be beholden to someone other than the people they serve. The liars are always part of the other team. “They are dirty. they are thieves. They are the ones who are evil. Everything wrong with the world is because of them. My guy is the hero.” They say.

That One Guy (profile) says:

Humpty Dumpty approves

“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

The definition of ‘competition’ would generally include a number of companies in the area that is higher than one, but I guess the court is willing to let the FCC change definitions to suit their whims and wants, even if those definitions are in stark contrast to what everyone else understands the word to mean.

Anonymous Anonymous Coward (profile) says:

Out of curiosity I tried looking up ‘competition’ in a legal dictionary where I found multiple entries. Included in those entries was a reference to How To Calculate The Herfindahl Hirschman Index which in part states:

Government regulators consider the HHI’s scale of 0 to 10,000 basis points (0.00 to 1.00%). Every nation has its own threshold, the United States uses 0.25 (2,500 points) while the European Union uses 0.142 (1,420 points). Any firm with a market share above this threshold would be considered to be anti-competitive or monopolistic.

When firms submit merger or acquisition proposals to the United States or European Union government regulators, this index can be used to determine if the resulting combination would have too high of a concentration of market share power. These regulatory authorities can objectively reject anti-competitive combinations by referring to the HHI.

Nations have permitted state-sponsored monopolies, such as the Dutch East India Company or Ma Bell to develop unproven technologies. When that market becomes mature, increased competition permits diversification, innovation and lower prices. The HHI can be used to assist with this economic transition.

It does not say that this index is required. The fact, however, that such an index is used, and is ignored by both the FCC and this court says a lot.

The FCC ignores an objective standard that has been well established, even though it has been ignored at times, it runs afoul of ]the FCC’s mandate](https://www.fcc.gov/about/overview):

Strategic Goal #1

Promoting Economic Growth and National Leadership.

Promote the expansion of competitive telecommunications networks, which are a vital component of technological innovation and economic growth and help to ensure that the U.S. remains a leader in providing its citizens opportunities for economic and educational development.

How does the FCC intend to fulfill it’s self claimed purpose when competition is defined as one?

And the court saying that the FCC can pick and choose its own criteria when defining competition totally ignores the history of both the definitions normally used in defining competition, but the disasters that were created when that definitions was ignored.

Not being a lawyer, I have not investigated related case law. I wouldn’t know how.

That One Guy (profile) says:

Re: Re:

How does the FCC intend to fulfill it’s self claimed purpose when competition is defined as one?

You just answered your own question, by defining the problem out of existence. If you define ‘competition’ as ‘one or more’ then if any company is able to theoretically serve an area that means a ‘competitive telecommunication network’ is available in that area, nicely meeting the goal.

It’s the same way lowering the definition of ‘broadband’ allows them to claim that the broadband market is competitive, because look, there’s lots of options for people to choose from(if they live in the right area). That the speeds are laughable and wouldn’t even come close to what other countries would consider ‘broadband’ is just brushed under the rug.

Anonymous Anonymous Coward (profile) says:

Re: Re: Re:

But there is that pesky word ‘expansion’ in their ‘Strategic Goal’. Seems a conflict to promote expansion but limit expansion to only one. Not that I expect anything but Pai talking out of both sides of his mouth AND his ass all at the same time. Quite the convoluted trick. I wonder if he took lessons or is giving them?

That One Guy (profile) says:

Re: Re: Re: Re:

Again, easy enough if you get to define the words. ‘Before the company moved in there wasn’t any network, never-mind a competitive one. After they moved in there is, therefore the ‘competitive telecommunications network’ has ‘expanded’ into new areas.’

It would be grossly dishonest of course, but this is Pai we’re talking about and that seems to be his primary language(followed by english), so it would be consistent.

cattress (profile) says:

Re: Re: Re:2 Re:

Well I’m not sure how young you are, but the government attempted to break up Ma Bell, dividing it into 7 regional companies. But like drops of mercury, they slithered back together. The problem was that they assigned a company to a region of customers, which were effectively 7 monopolies. And in the 80’s localities were given the power franchise monopolies to cable companies, which made mergers of small companies into companies of scale all but guaranteed.

Truth is, the government doesn’t do a very good job central planning. They pick winners and losers, artificially alter market forces, which take away incentives and consequences for companies to serve consumers. The only incentive for businesses under the heavy hand of government have is to gain more government control. That said, I am in full favor of net neutrality as it is a mitigating force on the government’s “winners”. We’ll never know if telecommunications would have evolved as quickly and widespread as it did without government intervention, or conversely even faster and more robust; but the situation is what it is today and that is the reality that as a champion of free markets I believe we must proceed from.

That One Guy (profile) says:

Re: Re: Re:3 Re:

We’ll never know if telecommunications would have evolved as quickly and widespread as it did without government intervention, or conversely even faster and more robust; but the situation is what it is today and that is the reality that as a champion of free markets I believe we must proceed from.

Based upon comments I’ve read from those in other countries it would seem that at least in those places stronger government intervention actually lead to better service and lower prices, such that a problem with the US’s telecommunications isn’t that the government stepped in, but that it didn’t/hasn’t stepped in enough in some ways(making illegal and cracking down on zero-rating for example) and too much in others(making it effectively impossible for competition to get a foothold in the market).

Uriel-238 (profile) says:

Re: Re: Re: Sherman Anti-Trust Act

That old fossil? Who cares about that anymore?

We’ve been in a mergers are good! Greed is good! kick since the Reagan years. The whole corporations are peopler than people thing really got going during the Clinton administration.

We really want a capitalistic feudal system where everybody has to suck off the Spacing Guild’s dick before getting to travel anywhere.

Anonymous Coward says:

and the chance of this heap of shit decision moving from the obviously bought and paid for Appeals court to the Supreme Court is varying between the extremely slim and none at all, i assume! how the fuck can anyone with even the intelligence of an idiot fail to acknowledge that there has to be at least 2 similar things to be competitive? and to also let Pai chose which data he thinks is best to let him carry on lying, deceiving and cheating the American people, in favor of the likes of Verizon, Comcast etc is downright disgraceful!!

Anonymous Coward says:

Hmmmm
So now our esteemed “leaders” want to claim that 1 > 1

I’m not surprised, these idiots once thought they could write a law that sets the value of pi to something they liked – idiots

“A Bill for an act introducing a new mathematical truth and offered as a contribution to education to be used only by the State of Indiana free of cost by paying any royalties whatever on the same, provided it is accepted and adopted by the official action of the Legislature of 1897”.

Anonymous Coward says:

This headline is misleading. The court ruling was that the FCC has the right to determine which of competing sources of truth it can consider, not that one institution defines competition.

The petitioners submitted arguments as to how expensive it is to expand broadband coverage within half a mile of an existing endpoint, and other lobbying groups submitted arguments that it was substantially cheaper than the petitioner’s claimed. The Court ruling was that the FCC has the authority to choose / determine which of these sources is more authoritative / accurate / correct / whatever.

The conclusion of the FCC was that the other groups (showing a cheaper rollout) was sufficient to demonstrate that an area could be easily served if competition is nearby, and the court merely confirmed the FCC’s right to come to that conclusion.

The fact that the current FCC has. O interest in actual competition nor the consumer wasn’t what the courts were evaluating.

Anonymous Coward says:

Re: Misleading Headline

This is another case of the legal system showing its warts like it or not.

Only an incompetent fool would look at this case and frame it as a complaint with regard to the FCC’s AUTHORITY or JURISDICTION.

The complaint was over a blatant bad faith abuse of legislative language by a source of administrative law. Like it or not, one has to still MAKE SENSE when making or ruling on something. That means that even though you may have the formal AUTHORITY to say the sky is green now, actually doing so is and should be treated as grounds for dismissal or censure by the courts.

I GET what Pai is trying to do. If there is ONE and only ONE provider in an area, yes, it is served. The first major hurdle had been overcome. Ground has been broken. My problem is with calling that “competitive”.

I understand why the Court is generally reluctant to second guess administrative law sources; to them is delegated the onerous task of becoming the Subject Matter Experts of their jurisdiction. However, the Courts should ALSO be on the lookout for poor behavior of this type. We ALL know what competition is, and classifying an area served by a competitive market of one isn’t it.

ECA (profile) says:

Lets fix some data...

“The FCC voted last year to eliminate price caps imposed on some business broadband providers such as AT&T and Verizon. The FCC decision eliminated caps in any given county if 50 percent of potential customers “are within a half mile of a location served by a competitive provider.”

1. Installation of High speed access tends to be Expensive.. for REASONS(like unions and NOT enough work, so employees getting hourly wages Cut back on the work ethic)
2. the MAPS SUCK and are inaccurate.. Completely..
3. LETS find an email address for a Judge and start sending him DATA..and ask him to FIX IT..

Location..GPS if you wish
Speeds
Do a few phone calls and TELL him the ISP’ you can get..
(do not include cellphone access)
Then ask him to FIX THE MAPS.. Or see if he can get you better access..

IF we dont PUSH for them to get us BETTER. they wont do it.

Sayonara Felicia-San (profile) says:

At what point do we stop pretending?

…that these are legitimate court rulings, and instead start calling it what it actually is….corruption.

Now I am perfectly capable of believing that a large percentage of these judges making absurd rulings on technology issues are simply senile and/or incompetent.

However, at some point, it’s time to realize that this isn’t an actual legitimate legal ruling, and is instead just a corrupt judge. In a society which wasn’t sick, like our own, a ruling like this would trigger a corruption probe, followed by jail.

Just stop pretending! Face facts!

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