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NetCompetition on Judge Williams Dissent in Appeals Court Upholding FCC

June 14, 2016, Contact:  Scott Cleland 703-217-2407

Judge Williams Dissent in USTelecom v. FCC Lays Bare the Competition Problems With Both the Appeals Court Decision and the FCC’s Open Internet Order

WASHINGTON D.C. – The following may be attributed to Scott Cleland, Chairman of NetCompetition:

“There are big competition policy problems with the DC Court of Appeals 2-1 decision upholding the FCC’s 3-2 Open Internet Order that appear destined for the Supreme Court and Congress to ultimately resolve.”

“The court’s decision appears to effectively grant an FCC majority of three unelected commissioners with largely unfettered power to arbitrarily pick winners and losers in the competitive communications and Internet marketplaces without much administrative due process, explanation, justification, evidence or reasoned analysis.”  

Please see the brief segments of Judge Williams’ dissent below which encapsulate what he judges as arbitrary, capricious, contradictory, and unreasoned competition policies in the Appeals Court USTelecom v. FCC decision and in the FCC’s Open Internet Order:

Page 118“Two central paradoxes of the Commission’s position are (1) its use of an Act intended to “reduce regulation” to instead increase regulation, and (2) its coupling adoption of a dramatically new policy whose rationality seems heavily dependent on the existing state of competition in the broadband industry, under an Act intended to “promote competition,” with a resolute refusal even to address the state of competition.  In the Commission’s words, “Thus, these rules do not address, and are not designed to deal with, the acquisition or maintenance of market power or its abuse, real or potential.”   

Pages 183-184 “In sum, the Commission chose to regulate under a Title designed to temper the effects of market power by close agency supervision of firm conduct, but forbore from provisions aimed at constraining market power by compelling firms to share their facilities, all with no effort to perform a market power analysis.  The Order’s combined reclassification-forbearance decision is arbitrary and capricious.” 

 

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 “The ultimate irony of the Commission’s unreasoned patchwork is that, refusing to inquire into competitive conditions, it shunts broadband service onto the legal track suited to natural monopolies. Because that track provides little economic space for new firms seeking market entry or relatively small firms seeking expansion through innovations in business models or in technology, the Commission’s decision has a decent chance of bringing about the conditions under which some (but by no means all) of its actions could be grounded—the prevalence of incurable monopoly. I would vacate the Order.”

 

NETCompetition.org is a pro-competition e-forum representing broadband interests.  See www.netcompetition.org 

Scott Cleland served as Deputy U.S. Coordinator for International Communications and Information Policy in the George H. W. Bush Administration. 

 

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