The FTC Says It's Totally Cool With Anti-Competitive Internet Fast Lanes

from the with-friends-like-these dept

As we’ve noted for a while, the FCC’s attack on net neutrality did much more than just kill net neutrality. It also gutted much of the FCC’s authority over broadband providers entirely, making it harder than ever for the agency to police the behavior of historically anti-competitive giants like Comcast NBC Universal and AT&T Time Warner. What authority the government now has to oversee one of the more broken sectors in American industry got shoveled instead to the FTC, an agency critics say lacks the authority or resources to police broadband. That’s the entire reason ISP lobbyists pushed for the plan.

Yet throughout the repeal, broadband providers and FCC head Ajit Pai stated that people didn’t need to worry because if ISPs did anything wrong, the FTC and antitrust enforcement would stand as a last line of defense. But any expectations that modern, eroded antitrust authority would protect consumers and competitors were quickly ruined by the recent AT&T and Time Warner legal face plant, widely mocked as one of the more clueless rulings in tech policy history.

And last week, Trump FTC boss Joseph Simons made it abundantly clear that the FTC isn’t likely going to be helping much either. Again throughout the repeal efforts, folks like FCC Commissioner Brendan Carr penned editorials like this one, insisting that post net neutrality, agencies like the FTC would be quick to crack down on anti-competitive ISP actions like “paid prioritization,” which lets a company buy an competitive advantage from an ISP:

“Reversing the FCC?s Title II decision will return the FTC to its role as a steady cop on the beat and empower it to take enforcement action against any ISP that engages in unfair or deceptive practices,? Carr wrote. ?Federal antitrust laws will apply.? Carr added that if ISPs ?reached agreements to act in a non-neutral manner by unfairly blocking, throttling, or discriminating against traffic, those agreements would be per se unlawful.”

Again, the argument being made is that you didn’t need net neutrality or strong FCC oversight of ISPs, because antitrust and the FTC would thwart any anti-competitive shenanigans. But in a speech at the National Press Club last week, FTC boss Simons clearly stated that blocking, throttling, or paid prioritization would not be per se antitrust violations. He also said he sees such anticompetitive arrangements the same way as he sees… happy hour:

“Paid prioritization is a type of price discrimination, which is ubiquitous in the economy. For example, think about when you walk into grocery store. Some customers get lower prices because they cut out coupons. Others might get a seniors discount. Others might get 2% off with their credit card. Yet others get discounts because they have a loyalty card with that supermarket. Those of us who go to the afternoon movie matinees will generally pay less, and those of us willing to show up at a restaurant before 6 pm might get the benefit of a lower priced menu. And of course, let?s not forget Happy Hour discounts.”

Except none of these examples are remotely the same thing as paid prioritization. Under paid prioritization, ESPN could buy a network latency and speed advantage over an up and coming streaming sports outfit, ensuring that ESPN traffic reached users more quickly and more efficiently. Given the lack of competition in broadband, neither users or impacted companies have a way (choice) to route around that behavior. Nobody has ever argued against discounts, in broadband, they’ve argued against incumbent ISPs erecting arbitrary tolls and tilting the playing field, something a truly objective FTC would actually care about.

Of course I’ve been noting how this is the telecom industry’s plan all along, something that has been overlooked during the myopic focus on net neutrality alone. The telecom lobby convinced the FCC to effectively self-immolate, driving any remaining authority to an FTC that lacks either the willpower or authority to actually do the job. As a result, oversight and accountability is going to fall into the cracks, which was the industry’s entire goal all along.

For now ISPs are trying (though occasionally failing) to avoid anti-competitive behavior so they don’t add any ammunition to the giant lawsuit against the FTC, a ruling for which should arrive any day now. But if that lawsuit goes the industry’s way, you can expect significantly more anti-competitive behavior moving forward, given they know (by design) that the government has been effectively defanged. And while that’s great news if you’re an AT&T or Comcast executive, that’s not going to be good news if you’re a consumer or one of countless small and mid-sized businesses that rely on some degree of internet neutrality to compete.

Filed Under: , , , , ,

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “The FTC Says It's Totally Cool With Anti-Competitive Internet Fast Lanes”

Subscribe: RSS Leave a comment
Anonymous Coward says:

Re: Re: Just doing their job

The FTC’s job is not to determine how broadband should work, it’s chiefly to prevent false advertising. They’re right that paid prioritization can’t automatically be called antitrust because we don’t like it. It might be, like if ESPN owned the ISP that was giving it priority. Some ISP complaints do come from false advertising—hidden fees etc.—and we’ll see whether they do their job at that.

Anonymous Coward says:

Re: Re: Re:2 Just doing their job

If anyone could pay for prioritization, with the same deal (no special prices for ISP-related entities), it wouldn’t be anticompetitive, just anti-customer. The FTC doesn’t have the power to go after companies for offering shitty products, as long as you know upfront they’re shitty.

Anonymous Coward says:

Re: Re:

I’m sorry, I didn’t realize internet access was free in the US. In that case I must have been paying $70 a month to my ISP for nothing for the last few years then.

Thank you so much for clearing this up for me. I will stop payments immediately and I expect to continue to be able to access the internet, based on your assertions.

TripMN says:

Re: Re: Re: Re:

Three times, really.

1) Once by the taxpayers who paid billions in subsidies to the telecoms
2) Once by the clients who pay monopoly driven high prices for the access
3) Once by the businesses like Netflix who have to pay the ISPs to run their businesses on the ISPs lines or see great degradation to service

Anonymous Coward says:

Re: Re: Re:2 Re:

Well actually, it’s more like four or five times. Since not only do companies have to pay for their internet access, but in some cases they also have to pay for peering agreements as well. And all major network operators pay for peering agreements to other major network operators.

clemahieu (profile) says:


It’s utterly confusing how these articles supporting government control of the internet keep getting written.

Based on the evidence, every single time they’ve intervened they undermine and ruin the internet’s functionality. DMCA, SOPA, PIPA, cookie notifications, GDPR, right to be forgotten, article 13.

For all the hypothetical damage companies could do, that’s never happened since the internet was created, it’s dwarfed the actual, very large amount of damage governments have done the very few times they’ve actually intervened.

You will never control the regulators that write laws about the internet. They will always, and have always used it as a means to control information. I urge you to change your mind on government intervention on the internet.

Vel the Enigmatic says:

Re: Confusing

Here’s the thing you (apparently) don’t understand. The "free market" can’t be trusted to govern themselves. This has been proven, over and over and over and over again since even before the creation of the internet.

We are seeing competition in the market dwindle as the broadband space largely becomes a duopoly with the two biggest guys in the industry continuously merging with each other, which increases their debts, and in turn, they turn the costs onto us, making things more expensive. That’s before all the nonsense of them pushing shit below the line to charge one rate while advertising another, and terrible customer service.

Clearly the government needs to intervene.

Stephen T. Stone (profile) says:


It’s utterly confusing how these articles supporting government control of the internet keep getting written.

I find the idea that the free market — which, in a capitalist society, always trends towards monopolies — can solve the Internet’s problems by being given free rein over the Internet is far more confusing…and laughable, to say the least.

Anonymous Coward says:

Re: Re: Re: Confusing

Better yet, it’s the same fucking idiots who would strangle their own dicks and jack off furiously if somebody mentioned "control the Internet please, big daddy government, because fuck Google".

Richard Bennett’s been doing some major damage control. I hope for his sake he’s wearing the extra thick protective kneepads and a crash helmet.

Anonymous Coward says:

Re: Confusing

Please do explain how "you can’t restrict what users do on the internet" (net neutrality) is the same as "users can’t upload or link to anything on the internet without a license, and if you don’t have that license you get fined hundreds of thousands of dollars and thrown jail" (all the legislation you mentioned).

The way I see it, those are two VERY different things. Government regulation is not always bad. Or should we get rid of the laws that say murder is illegal? I mean, it’s government regulation, right? So it must be bad.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »