FCC, Net Neutrality & Antitrust

Abstract

Where is net neutrality regulation heading? How might the D.C. Circuit rule on Verizon's challenge to the FCC's "Open Internet" order? What options might the various possible permutations of a loss for the FCC leave for governing concerns about net neutrality? This paper will briefly consider the legality of reclassifying broadband services under Title II of the Communications Act but focus on an underexamined set of questions: What will the status quo be prior to reclassification, or during the legal challenge that will certainly ensue of the FCC attempted it?

In a lengthy report in 2007, the Republican-led Federal Trade Commission asserted jurisdiction over net neutrality matters under both its antitrust and consumer protection authority, arguing that, precisely because the FCC does not regulate broadband as a common carrier service, it is not excluded from the FTC's general jurisdiction under Section 5 of the FTC Act. Both Republican FCC Commissioners cited the ability of the FTC and Department of Justice to enforce such laws in their dissents, arguing that these less restrictive alternatives made FCC regulation unnecessary, in addition to being illegal. But how would these options work, legally and practically?

This paper will explain the applicable underlying legal doctrines of the Sherman Act and Federal Trade Commission Act; questions raised about their adequacy as legal standards as well as the institutional competency of the DOJ and FTC to enforce them; and options available to Congress, either to reform these laws, change the institutional structures by which they might be enforced, or to give FCC legal authority over net neutrality concerns. In particular, we will consider how the FTC might enforce net neutrality principles like those voluntarily adopted by Google and Verizon under its existing Section 5 authority, and how such principles might be further developed on a larger scale through multi-stakeholder processes, such as the Broadband Internet Technical Advisory Group (BITAG).

What might the world look like if the push to "do something" about net neutrality had been directed at using, and if necessary, modifying or building upon existing laws, rather than pushing the FCC to adopt rules with dubious legal basis? This is not purely a counterfactual: it is a question that must be asked now, given the significant likelihood that the DC Circuit decision will leave the FCC no other option but reclassification, an option that faces strong and bipartisan opposition and may fail in court after a protracted legal battle, and that Congress will prove unable to broker a legislative response anytime soon.

Finally, to the extent net neutrality concerns flow from concern over a lack of competition in broadband services, we will consider options available for policymakers to encourage new entrants such as Google Fiber as well as wireless services. In particular, this means reconsidering the local legal regimes concerning rights of way, pole attachments and municipal franchising, as well as tower siting and federal spectrum policy for mobile services.