FTC Chair Asserts Authority on Net Neutrality

Deborah Platt Majoras Urges Caution, Study Before Legislation

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WASHINGTON (AdAge.com) -- Federal Trade Commission Chairman Deborah Platt Majoras today asserted broad authority to regulate "net neutrality" and said the agency will step in if regulation is warranted.
FTC Chairman Deborah Platt Majoras
FTC Chairman Deborah Platt Majoras Credit: AP

"Let me make clear that if broadband providers engage in anticompetitive conduct, we will not hesitate to act using our existing authority," she said at a Progress & Freedom Foundation conference in Aspen, Colo. "Dangers lie in legislating without clear evidence demonstrating the problem we wish to solve."

Cable franchising bill
A cable franchising bill, which has been on hold in the Senate after passing through the House of Representatives, is aimed at making it easier for phone companies to offer cable TV service without having to negotiate franchises city by city. Phone companies say the legislation will bring competition to cable, helping lower consumer costs.

Consumer groups and internet companies have been pushing for a "net neutrality" amendment to the bill, out of fear that phone and cable companies providing the new, higher internet speeds will reserve them for either their own content or paying partners' content, effectively creating a two-lane road, one for preferred content providers and one for everyone else.

The video franchising legislation had been holding in the Senate, as some argued that Congress should force the Federal Communications Commission to impose net neutrality. But the FCC declined to so, and the debate has focused on what could happen next.

Ms. Majoras said that while phone and cable companies are exempt from FTC regulation for "common carrier" services, the FTC can regulate non-common carrier services, including their activities as internet providers.

Formed task force
She said she has formed an Internet Access Task Force to study the issues stemming from converging technologies and set a workshop for Nov. 6-9 to hear testimony. Ms. Majoras has asked the task force to specifically examine net neutrality, but expressed deep skepticism about whether a need for action really exists and said the cost of regulation should be weighed vs. the benefit.

"I urge caution in proceeding on this issue," she said. "I start by admitting my surprise at how quickly so many of our nation's successful firms have jumped in to urge the government to regulate. ... When fear of marketplace disadvantage arises, there is tendency to quickly turn to government to seek protection of help. I do not dispute the sincerity of concerns. I, too, support a highly competitive internet environment. I just question the starting assumption, that government regulation, rather than the market itself, will provide the best solution."

Representatives of consumer groups welcomed the FTC's involvement, though somewhat warily.

"We certainly look forward to the analysis of an agency that exists to protect competition of the broadband market in which 98% of customers receive their service from either the telephone company or the cable company, if they have that choice at all," said Gigi B. Sohn, president of Public Knowledge, one of the consumer groups urging net neutrality.

Started with Time Warner-AOL merger
Andy Schwartzman, who heads the Media Access Project, a public interest law firm, said the FTC essentially created net neutrality when it conditioned Time Warner's merger with AOL on "open access."

"There is little doubt that the AOL/Time Warner consent decree, which has essentially mandated what we now call net neutrality, has provided lower rates and competitive choices to Time Warner cable customers for five years. Nor did it harm Time Warner's profitability. Whatever problems the company has had have not been attributable to this requirement," he said.
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