Washington, D.C. — An analysis of Business Data Services by the Consumer Federation of America released today shows that aggressive public policy to constrain the abuse of market power by dominant, incumbent communications network owners (e.g., AT&T, Verizon, and Comcast) is critical to ensuring a dynamic, innovative internet that works for consumers first and foremost.

“The past century of nondiscrimination policy has shown us the key ingredients for success are strong, before-the-fact regulation, antitrust, and flexible, ongoing oversight,” said Dr. Mark Cooper, CFA’s Director of Research and author of the report. “These principles should be restored in the broadband industry and guide policy moving forward in the emerging digital platform market,” added Cooper.

The report is entitled: Pragmatic, Progressive Capitalism at Its Best: Network Neutrality, How an Entrepreneurial State Used Public Policy to Foster Experimental Entrepreneurialism and Create the Internet. It outlines the historical, legal, and economic underpinnings of regulation and oversight of communications networks in the U.S. that created its success and leadership in the development and deployment of the digital communications sector. The report demonstrates that the recent rollbacks of net neutrality protections threaten to undermine a long record of American entrepreneurial success online.

CFA’s new report identifies the failure of “Free Market Fundamentalism,” which advocates lax antitrust enforcement and little or no oversight of the market of the Big Broadband Network owners. The report demonstrates that abandoning oversight to the Federal Trade Commission (FTC) will be disastrous for consumers. By analyzing four decades governed by the principle of network neutrality, the report charts a path forward.

“The report shows the FTC has a remarkable record of failure in the digital age,” said Amina Abdu, CFA’s Antitrust Advocacy Associate, “starting with the Microsoft case in the early 1990s and ending with a complete failure to adopt effective protection for consumer privacy from the mid-1990s until today.”

“After two decades of debate over Title I and Title II authority to ensure nondiscriminatory access to consumers, a debate in which both Democrat and Republican Federal Communications Commission members recognized the need for that oversight, in 2016, the courts upheld a light-handed Title II approach,” Cooper noted. The Trump FCC instantaneously did a complete “flip-flop”, seeking to repeal the Communications Act by taking a “Title ‘0’,” approach.”

The report points out that the majority of the court that reviewed the recent FCC “flip-flop” order felt the FCC had totally botched the empirical analysis, but they felt bound by the “deference” the Supreme Court would give to the agency. Even the third member of the court admitted that the FCC could use Title I or Title II authority to endeavor to protect competition and promote universal service.

“The extreme deference given the agency, the history of abuse of market power, the overwhelming evidence in the record, and the clear evidence that the FCC action violates the intent of the legislation, guarantees that this decision will be revisited and reversed in the future,” Cooper concluded.

Contacts:

Mark Cooper, 301-384-2204

Amina Abdu, 202-656-1282