Competition/Antitrust

In many rural communities, where available broadband speed and capacity barely surpass old-fashioned dial-up connections, residents sacrifice not only their online pastimes but also chances at a better living. In a generation, the travails of small-town America have overtaken the ills of the city, and this technology disconnect is both a cause and a symptom. Counties without modern internet connections can’t attract new firms, and their isolation discourages the enterprises they have: ranchers who want to buy and sell cattle in online auctions or farmers who could use the internet to monitor crops. Reliance on broadband includes any business that uses high-speed data transmission, spanning banks to insurance firms to factories.

Rural counties with more households connected to broadband had higher incomes and lower unemployment than those with fewer, according to a 2015 study by university researchers in Oklahoma, Mississippi and Texas who compared rural counties before and after getting high-speed internet service. “Having access to broadband is simply keeping up,” said Sharon Strover, a University of Texas professor who studies rural communication. “Not having it means sinking.”

Rep Doug Collins (R-GA) has introduced a bill that would provide a tax incentive to companies to build out rural broadband, providing a House version of a Senate bill, with both backing up a proposal long-advocated by Federal Communications Commission Chairman Ajit Pai. The Gigabit Opportunity (GO) Act would allow companies to defer capital gains taxes when they converted those gains into "long-time" investments into designated Gigabit Opportunity Zones. That means expensing investments on rural broadband buildouts on the "front end." The goal is to boost competition and speed investment, something Chairman Pai has said is an FCC priority for rural areas. Rep Collins said his bill would "dovetail" with the FCC's proposal to streamline broadband regulations, both wired and wireless. The bill is actually dovetailing with another dovetail, as it is a companion to one introduced in the Senate in May by Sen Shelley Moore Capito (R-WV).

For over a century, assessments of competition or the lack thereof have been central to how public policy treats the telecommunications industry. This centrality continues today. Yet, numerous foundational questions about this concept persist. In this paper, we chronicle how the definition of “competition” has evolved in economics and has been applied in the communications arena. The academic literature on competition hits an important inflection point in the mid-20th century with the development of “workable competition”: a term that is equated to “effective competition.” We find that while the concept of “effective competition” is central to policy formation at the Federal Communications Commission, the FCC’s own applications of “effective competition” are inconsistent. Given the centrality of this concept, and its inconsistent applications to date, we draw upon the seminal contributions to the development of the notion of “effective competition” to offer a modern definition suitable for application in 21st century communications markets.

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly. West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year, according to BallotPedia) with jobs in the private sector. West Virginia Senate President Mitch Carmichael (R-Jackson County) was also a sales manager for Frontier. But after six years with the company, Frontier terminated his employment on May 26. The dismissal came just weeks after Carmichael voted for a broadband infrastructure bill that was designed to bring faster speeds, lower prices, and more competition to Internet customers. It was described as a layoff in local press reports, but Carmichael said in multiple interviews that he believes the Senate vote led to his newfound unemployment.

Competitive cable operator WOW! reaffirmed a commitment not to implement data caps and usage-based policies for all of its high-speed Internet customers, holding that it’s taking the “consumer side” in that debate. WOW! said the promise of no data caps comes amid recently updated Internet-only plans and new bundles, adding that it now offers speeds up to 500 M bps across 95% of its footprint. WOW is also pushing ahead with a rollout of 1-Gig speeds using DOCSIS 3.1 technology, starting in markets that include Auburn and Huntsville (AL), Evansville (IN), and Knoxville (TN).

The “Customer is Always Right” maxim was perpetuated because it reflected a truth: in a competitive market, the seller that gives the customer what the customer wants will succeed and others will fail. But there is not enough competition in cable broadband markets to force cable companies to focus on satisfying customer needs as a path to beating the competition and “winning” the customer.

[Commentary] Amid the raucous political debate, there is a critical issue many are overlooking: the threat to network neutrality. Net neutrality is a critical component of the future of the Internet, but the real issue is the lack of fast, affordable Internet in America — directly caused by a lack of adequate competition. If consumers had more providers to choose from, the market would solve the issues of privacy protections, network neutrality and much more. People would not stand for poor privacy practices and content restrictions, usurious prices and poor quality. They would seek other options, forcing providers to change their practices.

So how can you get involved to keep the FCC from dismantling net neutrality? Spread the word — talk to your friends, family and neighbors. Educate them on the subject and encourage them to take a stand and engage the appropriate government representatives at the federal, state and local level. We must band together for the long journey ahead to effect change.

[Dane Jasper is the CEO and founder of Sonic, an Internet and telecommunications company in Santa Rosa (CA)]

Federal Communications Commission Chairman Ajit Pai officially released the agency’s Notice of Proposed Rulemaking (NPRM) recently to begin a process intended to undo the 2015 Open Internet Order and roll back vital Network Neutrality protections. The NPRM summarizes Chairman Pai’s thinking and sets up questions the FCC intends to explore during the rulemaking process. Unfortunately, it’s as bad as we expected.

Not only does the NPRM propose to eliminate the FCC’s only viable way to enforce Net Neutrality under Title II of the Communications Act, it specifically suggests elimination of bright-line Net Neutrality rules that prevent ISPs from engaging in paid prioritization, blocking and throttling content and websites. Yet Chairman Pai and his supporters in the cable industry are pretending that they’re not gunning for the Net Neutrality rules themselves. This claim is front and center on the homepage of cable industry front group Broadband for America: “The FCC is not trying to repeal Net Neutrality; it is working on separate regulations called Title II or ‘utility’ regulation.” This doublespeak obscures two central pillars of Pai’s approach (scattering in a few extra falsehoods along the way, like the inaccurate reference to so-called utility rules, and the repetition of Pai’s constant lies about alleged harms from Title II). Pai wants to pretend that he’s preserving the open internet, but he’s made up his mind to dismantle the rules that protect it and the foundation on which those rules stand.