Antitrust Law Should Resolve Any Net Neutrality Concerns, Republicans Say

Subcommittee Chairman Spencer Bachus, R-Ala., asked if there is “a more efficient and more effective way” to safeguard Internet protections than the rulemaking the FCC is presently undertaking. Regulation “imposes a burden on all regulated parties,” regardless of whether they've done wrong, Bachus said. Judiciary Committee Chairman Bob Goodlatte, R-Va., agreed and noted in his opening statement that “vigorous application of the antitrust laws can prevent dominant ISPs from discriminating against competitors’ content or engaging in anticompetitive pricing practices.” Congress should potentially “consider amending the current antitrust laws to ensure that they can be applied promptly and effectively to protect the competitive nature of the Internet marketplace,” Goodlatte said.

Wright praised the “superior analytical framework” of relying on antitrust law rather than FCC regulation. He cautioned against net neutrality proponents who back a “rigid categorical ban” on broadband providers embracing vertical contractual relationships. “Most vertical contractual relationships benefit consumers,” Wright said, praising them as “more often than not pro-competitive."

Goodlatte asked McDowell whether there has been widespread discrimination on the Internet and why the FCC has not conducted a cost-benefit analysis of the issue. “Is it fearful of the potential results?” Goodlatte asked. McDowell, visiting fellow at the Hudson Institute, said there’s been little sign of such widespread problems and emphasized the challenge the FCC faces, trying to put a “big fat regulatory rope through that eye” of what is a “very tiny legal needle,” legally speaking, given past court challenges to net neutrality rules. McDowell believes any new net neutrality rules will be rejected in court if the agency does not follow the narrow path laid out by the January decision by the U.S. Court of Appeals for the D.C. Circuit striking down 2010 FCC rules.

"We can’t leave a matter that important to the economists,” Wu, a Columbia Law School professor, countered. Wu argued there are many non-economic values to net neutrality, the FCC is “the right agency” and antitrust laws are “not equipped” to handle such protections.

Rep. Darrell Issa, R-Calif., worried net neutrality regulation would involve the FCC regulating “moral norms” online and a return to Leave It to Beaver-type content policing. “Professor, your own words indict you,” Issa remarked to Wu. Wu tried to push back against Issa, later insisting “net neutrality is not a call for content regulation” and is more about nondiscrimination norms. Rep. Blake Farenthold, R-Texas, questioned witnesses over whether anything really was “broken now” and the lack of “a big public outcry” where this is a problem.

Subcommittee Democrats want the FCC to develop rules, they said. “Isn’t antitrust regulation weak and slow and can’t operate in a preventive way?” committee ranking member John Conyers, D-Mich., posed. Antitrust law is “insufficient” and FCC net neutrality rules could “provide certainty for the industry,” he said, calling for “time to allow this process to proceed” in the FCC rulemaking. FCC net neutrality rules could address threats “before they fully materialize” and would be more comprehensive than the “piecemeal” antitrust enforcement, he said. Subcommittee ranking member Hank Johnson, D-Ga., emphasized FCC expertise and praised the blueprint laid out in the January court ruling. Johnson also pointed to “wide bipartisan agreement” that the 1996 Telecom Act be overhauled and suggested the FCC’s statutory questions regarding net neutrality authority be addressed as part of that rewrite. Reps. Suzan DelBene, D-Wash., and David Cicilline, D-R.I., also spoke in favor of such net neutrality protections.

Consumers Union sent a letter to subcommittee leadership Thursday pushing for an FCC role. “Net neutrality is one area where the antitrust laws cannot be counted on to provide the complete solution,” it said. “An Internet service provider raising prices on targeted content providers or on targeted consumers may or may not be violating the antitrust laws. But even if that conduct is not violating the antitrust laws, it is harming consumers, and it needs to be prohibited."

It’s “just not the case” that antitrust law would address matters slower than the FCC, McDowell argued. Bruce Owen, a professor at Stanford University, called net neutrality “a seductive slogan” of amorphous meaning, “quite protean, it adjusts like a mutating virus.” He compared that type of regulation to common carrier regulation and outlined a history where none of that type of regulation “stopped discrimination,” he said. “We don’t start with regulation, we start with competition,” Owen said: “Regulation, whatever its intent, has the practical effect of suppressing competition” as opposed to antitrust policy.