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NetCompetition: Broadband Utility Regulation Proponents’ Hypocritical Focus

FOR IMMEDIATE RELEASE, May 18, 2017, Contact:  Scott Cleland 703-217-2407

 

What’s Wrong with This Picture? Pressure Groups and their Netopolies-Funders: Google, Facebook and Amazon, Hypocritically Demand Utility Regulation of Competitive Broadband ISPs to Prevent Commercial Discrimination or Blocking When the Netopolies are the Actual De Facto Utilities that Discriminate and Block as a Key Part their Business Models  

 

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

 

“Title II broadband regulation proponents sacrifice their credibility when they claim competitive companies are monopolies that require the strongest possible utility regulation, while simultaneously claiming Internet monopolies like Google, Facebook and Amazon, are competitive companies that should have no regulation at all.”

 

 

New Evidence Google Facebook Ad Cartel Crushing Competition Market Failing

Let’s see what a winner-take-all, market failure looks like as it is happening before our eyes.

The Goobook digital ad cartel is continuing its outsized, abnormally-fast, revenue growth on top of the largest digital ad revenue bases by far. Consequently, their few remaining platform digital advertising competitors are weakening significantly per 1Q17 earnings reporting and other information.

This is how the relevant market players did in 1Q17.

Google (which is 90% digital advertising) grew revenues at a 22% annual rate, or an absolute revenue increase of +$17b to total $95b for the last year.

Facebook (which is basically all advertising) grew revenues at a 49% annual rate, or an absolute revenue increase of +$10b to total $30b for the last year.

Google Takeaways from Trump Antitrust Chief’s Senate Confirmation Hearing

What did the Senate confirmation hearing for President Trump’s nominee to head up the DOJ Antitrust Division, Makan Delrahim, tell us that’s relevant to the biggest pending global antitrust issue -- Google?

A lot.

Google is no longer politically protected from antitrust investigation in the U.S.

Let’s learn why.

It has gone from likely to clear that Makan Delrahim, will be the antitrust lead in handling the most consequential U.S and international antitrust matters, like Google, in the Trump Administration.

The hearing affirmed Mr. Delrahim is very well-known, highly-respected, and enjoys bipartisan support on the Senate Judiciary Committee. He received bipartisan letters of endorsement from 12 previous DOJ Antitrust Chiefs and all the Commissioners he served with on the Antitrust Modernization Commission.

In addition, as Deputy White House Counsel for nominations, who also shepherded Supreme Court Nominee, Judge Neil Gorsuch, through the Senate confirmation process, he obviously enjoys the strongest trust, respect, and support from President Trump and Attorney General Sessions.

Tellingly, it is mid-May and we don’t have a nominee for FTC Chairperson.

FCC Chairman Pai’s Brilliant Title II Net Neutrality Checkmate Strategy

Net neutrality proponents who summarily dismiss any potential for Congress to resolve net neutrality with a legislative compromise, might want to rethink that heroic assumption after closely reading the Pai-FCC’s Title II NPRM.

Apparently, Chairman Pai has figured out a way that could overturn the FCC’s 2015 Open Internet order, and in addition, practically neuter the going-forward precedential value of the D.C. Circuit Court of Appeals’ USTelecom v. FCC decision that upheld the legality of the 2015 FCC order.

Importantly, it is the continuation of the legal validation and legitimacy of the USTelecom v. FCC decision that gives net neutrality proponents their long-term hope that they could restore a Title II net neutrality regime in the U.S. with just a simple FCC majority vote in 2021 or 2025, just like they did in 2015.

6 Reasons Trump DOJ Will Take Lead from FTC in Google Antitrust Enforcement

The evidence is compelling that the DOJ will replace the FTC as the lead Sherman Act antitrust enforcer on the biggest Google antitrust matters during the Trump Administration.

A huge action forcing event for the Trump DOJ Antitrust Division is coming, most likely this June/July, when EU antitrust authorities most likely will conclude the first of three antitrust cases against Alphabet-Google, and officially rule Google is a 90+% search monopoly that has anticompetitively abused its monopoly position in search, and impose a traditional monopoly nondiscrimination principle remedy that Google treat its shopping comparison competitors as it treats itself.

While conventional wisdom assumes the FTC will continue as the Google antitrust lead, that is very unlikely to continue, because of two Google antitrust gamechangers, the replacement of President Obama with President Trump, and the EU’s coming official antitrust conclusion that Google is in fact a monopoly that acts anticompetitively in over 30% of the world.

Since so much flows from the baseline assumption of which U.S. entity will be the Google antitrust lead, the DOJ or FTC, it warrants closest examination.

Summary of six reasons DOJ will take the Google antitrust lead from FTC

(1) Institutionally, DOJ is the United States’ antitrust lawyer and the official liaison with other countries.

Why Title II Net Neutrality Directly Conflicts with Consumer Privacy

At best the notions of net neutrality and consumer privacy are somewhat in tension.

At worst, they are in opposition, and harm consumer privacy as happened when the Wheeler-FCC subordinated the goal of what’s best for consumer privacy to the conflicting and overriding goal of what was best for imposing maximal, Title II net neutrality.

Net neutrality and consumer privacy are in tension because they are very different concepts, priorities, and approaches for the handling of information online.

However, the original tension between the FCC’s first concept of net neutrality and consumer privacy was very limited because the Martin-FCC’s 2005 Internet Policy Statement on net neutrality was an extension of the Powell-FCC’s “Internet Freedoms” concept of net neutrality, and both approaches were consumer-first, i.e. very clearly centered around what consumers could expect from the Internet.

What thrust them into the more opposing concepts that they are today?

It was when net neutrality flipped from being primarily a consumer-centric principle to an edge-provider centric principle defined by Google, Amazon, Facebook and Netflix; and from the enforcement of a general broadband nondiscrimination principle, to the preemptive imposition of “the strongest possible,” specific, utility rate regulation framework – i.e. Title II of the 1934 Communications Act -- on a competitive industry that had done nothing wrong to warrant it.

Trump Administration Implications for Google Antitrust in EU, US & Markets

Conclusions:

Most of what we have learned in the five months since the election indicates that the Trump Administration is not going to be Google’s antitrust advocate and protector like the Obama Administration effectively was from 2013-2016, in de facto shutting down any real U.S. antitrust scrutiny of Google, and in turn implicitly discouraging antitrust enforcement of Google in the EU and around the world.  

This antitrust enforcement sea change has three big picture implications: for the EU, for the U.S., and for markets.

On PBS NewsHour Gigi Sohn & I Discuss End of FCC Broadband Privacy Order

Please see PBS NewsHour’s five minute segment here with Gigi Sohn and I discussing Congress’ rescission of the FCC’s unimplemented broadband privacy order that the Wheeler-FCC majority passed last October by a 3-2 vote.

Google Antitrust Implications of Makan Delrahim as DOJ Antitrust Chief

President Trump’s impressive nominee to head the DOJ Antitrust Division, Makan Delrahim, enters the global antitrust stage when one company, America’s Alphabet-Google, has been under near constant antitrust investigation around the world for a decade and faces multiple pending antitrust enforcement actions.

What is the global and U.S. antitrust community to glean from this nomination?

Mr. Delrahim’s background speaks volumes, especially if one believes the adage, people are policy.

Overall, Makan Delrahim is a widely-respected, veteran antitrust official, attorney, expert, and professor, with high-level antitrust experience that check all the right boxes, organizationally, functionally, and professionally.

Mr. Delrahim’s antitrust-specific experience is outstanding.

NetCompetition Statement on Senate CRA of FCC Broadband Privacy Order

FOR IMMEDIATE RELEASE, March 23, 2017, Contact:  Scott Cleland 703-217-2407

Senate CRA Vote Rescinding FCC’s Broadband Privacy Order Paves Way for House Passage and Has Congress Prioritizing Consumer Privacy Protection Over Net Neutrality

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

 “The CRA was made for correcting big agency mistakes just like the FCC’s Broadband Privacy Order, which made consumer privacy protection worse not better, because it prioritized technology over people, net neutrality over consumer privacy protection, the FCC over the FTC, and the interests of edge platforms over the interests of American consumers.”

“The most embarrassing part of the FCC’s broadband privacy order is that it does not really protect consumers’ privacy at all. That’s because effectively it only requires ISPs to keep certain information private when every other entity on the Internet does not have to keep private that exact same information.”

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Q&A One Pager Debunking Net Neutrality Myths