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: broadband, fcc, ftc, net neutrality, title ii, zero rating


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  • icon
    DannyB (profile), 2 Apr 2019 @ 6:39am

    Just doing their job

    It is the job of the FCC to regulate big telecom.

    It is the job of Pai, and indeed all Trump appointees, to prevent the department(s) they oversee (eg, the FCC) from doing its/their job.

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

    • icon
      DannyB (profile), 2 Apr 2019 @ 6:40am

      Re: Just doing their job

      So any surprise the FTC is also not doing its job.

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

      • identicon
        Anonymous Coward, 2 Apr 2019 @ 7:27am

        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.

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

        • identicon
          Anonymous Coward, 2 Apr 2019 @ 8:20am

          Re: Re: Re: Just doing their job

          "paid prioritization can't automatically be called antitrust "

          Well then - let's just call it anti competitive behavior.

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

          • identicon
            Anonymous Coward, 2 Apr 2019 @ 8:48am

            Re: Re: Re: Re: 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.

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

            • identicon
              Anonymous Coward, 2 Apr 2019 @ 4:30pm

              Re: Re: Re: Re: Re: Just doing their job

              Are any of them offering what you describe?

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

              • identicon
                Anonymous Coward, 2 Apr 2019 @ 9:19pm

                Re: Re: Re: Re: Re: Re: Just doing their job

                They're not very public about that, so I don't know. Certainly we've seen some ISPs exempt their own stuff from caps, which gives us a hope for FTC enforcement.

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

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 2 Apr 2019 @ 6:45am

    Bandwidth SOCIALISTS, always wanting something for nothing.

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

    • identicon
      Anonymous Coward, 2 Apr 2019 @ 6:47am

      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.

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

      • icon
        JoeCool (profile), 2 Apr 2019 @ 6:56am

        Re: Re:

        Indeed. It's paid for TWICE! Once by us, and once by Netflix/et al. Now ISPs want to be paid a THIRD time.

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

        • identicon
          TripMN, 2 Apr 2019 @ 7:01am

          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

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

      • icon
        dan8mx (profile), 2 Apr 2019 @ 10:38am

        Re: Re:

        So it's kind of like a happy hour special where you pay full price, but you only get a full pint if the brewer paid the bar extra

        Can't really say I've seen much of that - is it only "ubiquitous" in Washington D.C.?

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

  • identicon
    Anonymous Coward, 2 Apr 2019 @ 7:36am

    "What authority the government now has to oversee one of the most broken sectors in American industry got shoveled instead to the FTC..." FTFY. You're welcome.

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

  • icon
    Moo (profile), 2 Apr 2019 @ 8:48am

    Typo

    "don't add any ammunition to the giant lawsuit against the FTC" I think you mean "FCC" there.

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

  • This comment has been flagged by the community. Click here to show it
    icon
    clemahieu (profile), 2 Apr 2019 @ 9:33am

    Confusing

    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.

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

    • identicon
      Chip, 2 Apr 2019 @ 9:48am

      Re: Confusing

      Every Nation eats the Paint chips it Deserves!

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

      • identicon
        Anonymous Coward, 2 Apr 2019 @ 10:12am

        Re: Re: Confusing

        Eat faster, please, so your cumulative health problems prevent you from posting this dead tired copy+paste response at every opportunity.

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

        • identicon
          Chip, 2 Apr 2019 @ 10:50am

          Re: Re: Re: Confusing

          Copy "paste"?! I'll have you "no" taht my Posts are all Individually Artisinally "carfted", Sycophant!

          Every Nation eats the Piant chips it Deserves

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

    • identicon
      Vel the Enigmatic, 2 Apr 2019 @ 9:51am

      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.

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

    • icon
      Stephen T. Stone (profile), 2 Apr 2019 @ 10:21am

      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.

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

    • icon
      Toom1275 (profile), 2 Apr 2019 @ 11:35am

      Re: Confusing

      Government control of the internet | Net Neutrality

      One or the other, dude. They're two completely separate things.

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

      • icon
        That One Guy (profile), 2 Apr 2019 @ 2:49pm

        Re: Re: Confusing

        You'd think that bogus claim would have died out by now, but when dishonest claims and conflations are all they have I guess you go with what you've got.

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

        • identicon
          Anonymous Coward, 2 Apr 2019 @ 6:53pm

          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.

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

    • identicon
      Anonymous Coward, 4 Apr 2019 @ 6:47am

      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.

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

  • identicon
    wutsinterweb, 3 Apr 2019 @ 7:43am

    Karl, Karl, Karl ... If you're going to continue to post opinion pieces as "news", you should at least label them as such (opinion). Remember how that didn't work out for you so well on DSLR?

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

    • identicon
      Anonymous Coward, 4 Apr 2019 @ 6:44am

      Re:

      Please state the portions of this article which are factually incorrect. I'll wait.

      Also, I feel that kind of worked out well for him on DSLR. But I suppose you can lie about anything if you have an axe to grind.

      (P.S. Are you Richard? You sound like Richard.)

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


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