DOJ: Measured comments
The Department of Justice filed comments today with the FCC in the National Broadband Plan proceeding here. It’s great to see a focus on competition. Some highlights:
1. Fine-grained pricing/subscription data will be important to understanding the state of high-speed Internet access competition. DOJ recommends that the FCC go beyond information about infrastructure and availability to look closely at actual pricing.
2. Re-allocation of spectrum makes sense. But the “foreclosure value” to market-powerful incumbents of buying that spectrum - and keeping their competitors from buying it - may exceed its market value. So DOJ very gently (with lots of caveats) suggests that the highest value use for new spectrum may actually be to make it available for license by new rivals.
3. Better information for consumers will help. “Up to” advertised speeds may be misleading, as the Commission has already recognized. Bundles can be impenetrable for price-comparison purposes. The FCC could help by promoting standardized information provision - akin to nutrition labeling. But don’t overdo it.
4. The FCC should monitor closely those markets that have just one or two high-speed Internet access providers. Price regulation may not make sense for residential Internet access services, unless (perhaps) affordability is an important factor for consumers. We don’t know yet how strongly correlated affordability is with adoption.
These are careful and thoughtful comments. It’s important that DOJ’s Antitrust Division have an active and continuing relationship with the FCC, because competitive concerns should be at the heart of the country’s national broadband planning.
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3 Responses to “DOJ: Measured comments”
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You go, girl. Glad you highlighted this DoJ piece. With all the talk about regulation, it’s good to hear a voice of sanity focusing on competition, which is what will really give customers control of their own broadband destiny. This is absolutely the focus the FCC needs for broadband.
The DoJ comments could have been lifted directly from my recent paper, “A National Broadband Plan for Our Future: A Customer-Centric Approach,” published in Int’l J. of Comm, 3, 2009, 72-779 at http://ijoc.org/ojs/index.php/ijoc/article/view/577/351 , in which I recommend: (i) lots more licensed spectrum, (ii) more transparency for customers, and (iii) sensible antitrust enforcement.
Keep up the good fight.
Susan
Glad to have you back, but I’m in profound disagreement with your conclusions.
I do believe affordability is an important factor for consumers, with U.S. prices for high speeds twice what similar service costs in France and Britain. NTIA and DOJ explicitly hold back on meaningful steps to solve the problem.
I therefore conclude that the U.S. broadband plan is failing at speeds above wireless. Without the plan, 90% of the U.S. will get 50 megabits but it is too expensive for many. With the plan, little changes for those 90%. (Not much is being done for the other 10%, but that’s another story.)
If used heavily as a broadband replacement, wireless today tops out at 500K to 2 megabits. That will go to 2-6/7 meg in 2013-2015, the LTE generation. (Much uncertainty here, but those estimates are informed by Bell CTOs and the like. Wireless is shared, so the higher speeds - like 12 meg LTE - can only be offered to a limited group.)
Providing more spectrum may or may not create decent competition at these lower speeds. AT&T and Verizon are already pulling away from the pack. Sprint has more spectrum than they can use, but is losing money. It’s possible the spectrum will allow more players, but equally possible it won’t be enough.
The decisions implicit in NTIA-DOJ therefore are that little will be accomplished except for a possible at lower speeds, and very limited lifeline subsidies (USF is already 15%).
I don’t think that should be acceptable. Too many nations are doing much better. It’s a mistake for the U.S. to fall behind.
With respect.
Dave Burstein
Dave - these aren’t my comments! The post summarizes what DOJ said. Susan