Comcast and BitTorrent are working together to improve the delivery of video files on Comcast’s broadband network.
As The Wall Street Journal reported on March 27,
“Rather than slow traffic by certain types of applications–such as file-sharing software or companies like BitTorrent–Comcast will slow traffic for those users who consume the most bandwidth, said Comcast’s [chief technology officer, Tony] Warner. Comcast hopes to be able to switch to a new policy based on this model as soon as the end of the year, he added. … Comcast will start with lab tests to determine if the model is feasible.”
Over at Public Knowledge, a Web site advocating much greater government regulation of information technology activity, Jef Pearlman argued the pioneering joint effort “changes nothing about the issues raised in petitions” before the Federal Communications Commission (FCC) advocating more regulation, because Comcast and BitTorrent are “commercial entities whose goals are, in the end, to make sure that their networks and technology are as profitable as possible.”
Setting aside whether the pursuit of profit is a good thing or not, what this episode actually proves is that FCC has done its job: The threat of regulation is a credible deterrent to prevent unreasonable discrimination by broadband service providers, and we don’t need a new regulatory framework with the unintended consequences such regulation always entails.
If we want innovation, more choices, and ultimately lower prices, we have to be prepared to allow broadband service providers to experiment and to succeed or fail in the market. Regulation always discourages all three.
We also need an enforcement backstop, of course. But it doesn’t have to be formalistic and inflexible.
No New Laws Needed
Aside from FCC authority under the Communications Act of 1934 as amended, the Federal Trade Commission has concluded antitrust law is “well-equipped to analyze potential conduct and business arrangements involving broadband Internet access.”
At the Tech Policy Summit in Hollywood in late March, one panelist claimed antitrust enforcement is impaired by the Supreme Court’s 2004 decision in Verizon v. Trinko. But it isn’t so.
In that case the plaintiff was trying to convert an alleged breach of the Communications Act into an antitrust claim under Section 2 of the Sherman Act. In other words, the plaintiff was trying to expand the application of antitrust jurisprudence. The Court ruled the Telecommunications Act of 1996 neither expanded nor limited the antitrust laws.
The 1996 act has no effect on the application of traditional antitrust principles. Its saving clause–which provides, “nothing in this Act … shall be construed to modify, impair, or supersede the applicability of any of the antitrust laws,” 47 U.S.C. Section 152–preserves claims that satisfy established antitrust standards, but it does not create new claims that go beyond those standards.
The Court went on to conclude the activity of Verizon that Trinko complained of did not violate preexisting antitrust standards.
The bottom line is that we have three federal agencies, including the Antitrust Division of the Department of Justice in addition to the two previously mentioned, that have the jurisdiction, expertise, and some actual experience to intervene if broadband providers unreasonably discriminate.
Pro-regulation groups such as Public Knowledge have done a great job and can declare victory now. The telecom industry should henceforth be allowed to work out solutions without any further government interference.
Hance Haney ([email protected]) is director and senior fellow of the Technology & Democracy Project at the Discovery Institute.