Broadband

by Karl Bode


Filed Under:
broadband, competition, fcc



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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  • icon
    Ninja (profile), 31 Aug 2018 @ 6:30am

    That honest govt ads page could do some nice work here. the GOP isn't even trying to disguise their contempt towards the people anymore.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Aug 2018 @ 9:08am

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Sep 2018 @ 2:56pm

        Re: Re:

        I think some of them are well aware of the situation and they think the end justifies the means. Win at all cost.

        reply to this | link to this | view in chronology ]

  • icon
    Jinxed (profile), 31 Aug 2018 @ 6:36am

    Mario Puzo: "I'll make him an offer he can't refuse."

    ISPs: "We'll make you an offer you can't get cheaper anywhere else."

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 31 Aug 2018 @ 7:19am

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Aug 2018 @ 7:24am

      Re: Humpty Dumpty approves

      Especially when policy making is based on it.

      reply to this | link to this | view in chronology ]

    • icon
      Seegras (profile), 31 Aug 2018 @ 8:57am

      Re: Humpty Dumpty approves

      That's been going on for decades. According to the USPTO, "algorithm" in a patent is something totally different than what it means in mathematics or computer science; and thus patentable. It's Indiana Pi-legislation all over.

      reply to this | link to this | view in chronology ]

  • icon
    Anonymous Anonymous Coward (profile), 31 Aug 2018 @ 7:36am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 31 Aug 2018 @ 8:10am

      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.

      reply to this | link to this | view in chronology ]

      • icon
        Anonymous Anonymous Coward (profile), 31 Aug 2018 @ 8:26am

        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?

        reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 31 Aug 2018 @ 8:41am

          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.

          reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 31 Aug 2018 @ 8:08am

    So what you're saying is, a US Circuit Court of Appeals just made an official ruling legitimizing "alternative facts"?

    I weep for the future of our nation...

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Aug 2018 @ 8:55am

      Re:

      The fact that you think this is somehow new is the real problem.

      Victors write history and those in power get to decide what facts are, not you.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Aug 2018 @ 9:18am

      Re:

      It does say the FCC has to be rational. Also: courts determine legality, not legitimacy.

      reply to this | link to this | view in chronology ]

    • identicon
      LucyGucy, 31 Aug 2018 @ 9:59am

      Re:

      Negative. They endorsed corporate monopolies full stop. If you look into the background of the judges you'll find they all come from the same differing corpos.

      reply to this | link to this | view in chronology ]

      • icon
        Bergman (profile), 31 Aug 2018 @ 1:54pm

        Re: Re:

        This. I'm curious though, is the judge in question aware he may have just effectively struck down the Sherman Anti-Trust Act?

        After all, if a single company in a market that gets 100% of the customers and actively discourages competitors isn't anti-competitive, then nothing is.

        reply to this | link to this | view in chronology ]

        • icon
          ShadowNinja (profile), 31 Aug 2018 @ 2:16pm

          Re: Re: Re:

          That's the thing though, when was the last time the government actually broke up a monopoly or near monopoly?

          The only business I can remember them ever going after in my lifetime for having too much of a monopoly is Microsoft in the OS market. And they didn't even break Microsoft up for it.

          reply to this | link to this | view in chronology ]

          • icon
            cattress (profile), 1 Sep 2018 @ 12:56am

            Re: Re: Re: 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.

            reply to this | link to this | view in chronology ]

            • icon
              That One Guy (profile), 1 Sep 2018 @ 9:24am

              Re: Re: Re: Re: 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).

              reply to this | link to this | view in chronology ]

        • icon
          Uriel-238 (profile), 31 Aug 2018 @ 3:54pm

          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.

          reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    John Smith, 31 Aug 2018 @ 8:26am

    How does big business buy off politicians?

    What are Trump's two main weaknesses?

    Which country controls those weaknesses?

    The FCC is more untouchable than Eliot Ness.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Aug 2018 @ 8:30am

    Yep...

    nothin' to see here
    lobbyist--er Politicians at work
    please move along

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Aug 2018 @ 8:32am

    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!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Aug 2018 @ 8:49am

    sing along

    secret Aji[n]t Pai[d]
    secret Aji[n]t Pai[d]
    He's givin' you the finger and taken away your net

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 31 Aug 2018 @ 10:01am

      Re: sing along

      secret Ati[n]t Pai[d]
      secret Ati[n]t Pai[d]
      He's drinkin' out the big cup, and swallowing all the rules

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Aug 2018 @ 11:41am

    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".

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Aug 2018 @ 11:46am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      Thad (profile), 31 Aug 2018 @ 12:29pm

      Re:

      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,

      And that a source whose definition of "competition" includes areas that have only one provider falls within that right.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Sep 2018 @ 8:37am

      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.

      reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 31 Aug 2018 @ 1:02pm

    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.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 31 Aug 2018 @ 2:39pm

    Who needs reality, when we have cushy investments & internet service reserved for those with the power to actually make us service the market.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 1 Sep 2018 @ 12:19pm

    Pai is engaged in bribery and corruption, pure and simple.

    the guy is a criminal, he just hasn't been convicted...

    YET.

    reply to this | link to this | view in chronology ]

  • icon
    Sayonara Felicia-San (profile), 7 Sep 2018 @ 2:45pm

    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!

    reply to this | link to this | view in chronology ]


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