[Upd-discuss] Dorgan's and Snowe's Comment for the FTC

[Seth Johnson]

Comment of Byron L. Dorgan and Olympia Snowe for the FTC's Workshop on
"Broadband Connectivity Competition Policy:"
> http://www.ftc.gov/opp/workshops/broadband/index.html


> http://www.ftc.gov/os/comments/broadbandwrkshop/527031-00037.pdf


Comments of Senators Byron L. Dorgan and Olympia Snowe in the Federal
Trade Commission's Proceeding on Broadband Connectivity Competition
Policy Workshop - Project No. V070000

Chairman Majoras and Commissioners:

     As you know, we are the Sponsors of S. 215, the "Internet 
Freedom Preservation Act," which is the leading Senate 
legislation that addresses tbe increasingly important and high-
profile issue known as "net neutrality." The debate over net 
neutrality has quickly become the dominant telecommunications and 
Internet policy debate in Washington. It has raised concerns 
among hundreds of millions of Internet users, small and large 
Internet companies, consumer electronics manufacturers, software 
publishers, and countless public interest groups ranging from the 
Christian Coalition to MoveOn.org. In fact, it is hard to imagine 
a broader and more diverse coalition working together on any 
other policy debate in Washington.

     Consequently, it is appropriate that the Federal Trade 
Commission, with its roles in protecting consumers and guarding 
against anti-competitive behavior, is conducting this workshop on 
"Broadband Connectivity Competition Policy."

     Today, it is difficult to conceive of a world without the 
Internet. In only a few short years, this medium has 
revolutionized the way we communicate with each other. People all 
over the world can share ideas, information, goods, and services 
with only a few strokes on a keyboard and a click of the mouse.

     The Internet has provided the oxygen for a new, robust 
economic engine of electronic commerce among both businesses and 
consumers. It provides a worldwide, egalitarian platform where 
the marketplace picks the winners and losers, rather than 
previous barriers to entry or success such as capitalization, 
geography, or size.

     This revolutionary shift created by the Internet is largely 
attributable to the open architecture that defines it. As the 
Senate Commerce Committee heard last year from Vint Cerf, who is 
credited with largely creating the Internet and the TCP/IP 
protocols that govern it, the open architecture of Internet 
allows Internet users, content creators, and service providers to 
communicate without having to seek permission from broadband 
providers for special deals or access.

     Appropriately, this open design has resulted in the Internet 
being described as the most democratic tool ever invented. 
Udortunately, this same tool that serves our free-market 
structure and democratic ideals is now at risk of being 
manipulated into something that is costly, slow, or even 
potentially oppressive by broadband providers. Broadband 
providers are now technologically capable and financially 
incentivized to exercise considerable control over how, when, and 
even if information can be viewed and shared.

     Furthermore, in addition to the technical ability and 
financial incentives to discriminate, the Federal Communications 
Commission recently has enabled broadband providers to exert such 
control over content. It did not take long for large broadband 
access providers to announce they would take advantage of the 
FCC's action.

     On November 7,2005, now-AT&T CEO Ed Whitacre was quoted as 
saying, "They don't have any fiber out there. They don't have any 
wires.  They don't have anything.... They use my lines for free -
- and that's bull. For a Google or Yahoo! or a Vonage or anybody 
to expect to use these pipes for free is nuts!"

     Last year, a Cablevision executive stated, "So, anyone who 
buys Vonage on our network using our data service doesn't really 
know what they are doing.... Our service is better, its quality 
of service.  We actually prioritize the bits to so that the voice 
product is a better product."

     Such anticompetitive conduct is the very issue that the 
Federal Trade Commission should actively investigate and oppose. 
The FTC's congressionally authorized mandate is to prohibit 
business practicea, that are anticompetitive, deceptive, or 
unfair.  Furthermore, the FTC is appropriately positioned to 
assert its role in this area through its julisdiction over 
broadband Internet access services that are offered on a non-
common carrier basis.

     Although legislation is needed to ensure that broadband 
service providers abide by non-discrimination rules, the FTC can 
and should use its existing authority to bring enforcement 
actions under the antitrust laws to protect consumers from 
anticompetitive behavior relating to the control of content by 
broadband providers.

     Today, vigorous antitrust enforcement is badly needed as 
there is an unprecedented consolidation of broadband market power 
among only a handful of large corporations. Last year, AT&T CEO 
Ed Whitacre stated among his justifications for the AT%T-Bell 
South merger that "no partnersbip between two independent 
companies, no matter how well run, can match the speed, 
effectiveness, responsiveness and efficiency of a solely owned 
company."  While net neutrality proponents were successfully able 
to restrict the merged entity from engaging in content 
discrimination for two years, Mr. Whitacre's statement should 
send a signal to antitrust enforcers that the means and desire to 
engage in anticompetitive activities is upon us.

     Perhaps we would not be as concerned about the potential for 
anti-competitive behavior if, in fact, there was true competition 
in the marketplace to choose among broadband providers. 
Unfortunately, the truth is that the vast majority of Americans 
have, at best, a choice between only the phone company and the 
cable company for broadband services. In this environment, 
consumers face few choices and high prices, and the lack of 
competition means that broadband speeds svailable to most 
consumers are disproportionately slow compared to available 
speeds in other industrialized countries. It is indeed a shame 
that the country responsible for inventing the Internet and 
fostering the world's most innovative Internet products and 
services provides its citizens with the slowest broadband speeds 
compared to our economic competitors.

     We applaud the FTC's efforts to study net neutrality issues 
in greater detail, and feel confident that the workshops will 
reveal that there is a need for FTC involvement to prevent harms 
to consumers and competition. Given the lack of broadband 
comnpetition, the ability and incentive of broadband providers to 
discriminate among content providers, and the public statements 
from executives of leading broadband providers, the FTC should be 
both vigilant and engaged to preserve the open architecture of 
the Internet before there are widespread examples of 
discriminatory and anticompetitive behavior.

     We hope that the FTC will utilize its existing authority 
under the FTC Act and the antitrust laws to investigate 
anticompetitive behavior that harms Internet users.

     We look foward to continuing to work with the FTC as it 
seeks to implement its worthy mandate to protect consumers by 
prohibiting business practices that are anticompetitive, 
deceptive, or unfair.