Congress Blog

The Internet thrives without overregulation

It is evident from the title of his recent net neutrality editorial that Anant Raut has both underestimated the benefits of a pro-competition approach, and underestimated the costs of a pro-regulatory approach, to addressing the goals of net neutrality.

Fostering competition and punishing anti-competitive conduct creates an environment where innovators can create new products and services in response to consumer demand more freely, without having to spend time and money to comply with static, "one-size-fits-all" regulations from Washington, D.C.

With that in mind, the Federal Trade Commission (FTC), with its jurisdiction over our nation's antitrust and competition laws, is ideally equipped to both protect the interests of consumers and foster competition in the ISP marketplace.

FTC enforcement of antitrust laws preserves innovation and consumer benefits.

Mr. Raut, a former FTC staffer, acknowledges that the purpose of U.S. antitrust law is to protect competition, not particular competitors. 

Ironically, while well-intentioned, net neutrality regulations would stifle the very competition in the marketplace that the FTC is charged with fostering. For example, proposed net neutrality regulations would essentially require all agreements between ISPs and businesses that stream their products to be on the same terms. This unilateral standard would destroy any incentive for ISPs to differentiate themselves from competitors and increase consumer choices. Blanket regulation based on the principle of net neutrality would deny consumers the potential benefits in cost savings and improved services that may result from vertical agreements.

We must remember that since the internet's infancy, Congress has fought hard to prevent overregulation of the internet, and the result is that the internet has thrived precisely because it was allowed to mature without overly-burdensome regulations.  

FTC has the most extensive experience to address anticompetitive conduct.

Mr. Raut and other supporters of net neutrality have voiced concerns over vertical agreements between ISPs and businesses. Many experts acknowledge that these vertical agreements could possibly lead to anti-competitive conduct that could potentially harm consumers. In extreme cases, these agreements could eventually block downstream products, degrade services, and charge higher prices to American families. I strongly agree that these anti-competitive practices should be aggressively deterred and punished.

Yet, it is in these specific areas where the FTC has the most robust toolbox to address these anticompetitive activities.

As FTC Acting Chairman Ohlhausen recently commented, the FTC has a long history of addressing harmful conduct. Their vast experience includes "foreclosing rival content in an exclusionary or predatory manner; problematic conduct relating to access; discrimination, pricing, bundling, and regulatory evasion; harmful exclusive contracts; agreements between competitors to fix prices, reduce output, or allocate customers; and problematic vertical mergers that could deny competitors access to essential inputs or to downstream distribution outlets."

FTC provides regulatory certainty and prevents overregulation.

A frequently cited goal of net neutrality is to support new startups that don't have the capital to compete with the market dominant businesses. While this is a noble goal, it must not and cannot be achieved through overregulation.

A more appropriate and economically efficient way to achieve this goal is to ensure a robust and competitive internet marketplace. When competition among internet businesses thrives, consumers are empowered to demand the changes they want. Where there is demand for a net-neutral ISP, a properly functioning market will provide that service. It is also likely, however, that certain consumers may demand an ISP that favors certain types of products such as video streaming or gaming.  

A one-size-fits-all net neutrality rule would impose the demands of some consumers on the entire marketplace-and would impose costly regulations on innovators and businesses that want to provide these services to consumers. 

Jurisdictional issues can easily be addressed.

If the FCC changes the classification of ISPs as common carriers, the 9th Circuit would be the only jurisdiction where the FTC arguably could not regulate some providers (although the controlling 9th Circuit opinion is being reviewed en banc). And if questions still arise, as they have regarding the "common carrier" exemption, Congress can modify the antitrust laws to clarify that ISPs fall within the scope of the FTC's jurisdiction to ensure competition in the marketplace.

The FTC is the best situated agency to ensure that our markets are behaving competitively, that companies that engage in anti-competitive conduct are punished, and that innovative businesses are able to respond to consumers' demands quickly without unnecessary regulatory barriers holding them back. As FCC Chairman Ajit Pai explained, "The scalpel of antitrust, not the sledgehammer [of regulation], is the best guarantor of consumer welfare online." For the benefit of consumers and economic efficiency, we need to empower the FTC to ensure competition in the broadband market.

Bob Goodlatte is chairman of the House Judiciary Committee. 

The views expressed by this author are their own and are not the views of The Hill.

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