Matter of Antitrust

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House Judiciary Committee chairman John Conyers (D-Mich.) last week signaled renewed interest in using antitrust law to protect free speech and market competition on the Internet.

In public comments last Wednesday, Conyers expressed concern that cable and phone companies would use their dominant positions in the Internet-access market to distort political discourse and commercial activity, especially by charging fees to carry different types of content or traffic.

“If Congress acts, it will not be because we have decided to regulate. It will be because the Internet-service providers have imposed their own new regulation on the Internet, and are interfering with its healthy growth,” Conyers said at a network-neutrality hearing held by the Judiciary Committee’s Antitrust Task Force.

About 96% of residential users rely on subscriptions to cable or phone company services for access to the Internet, Conyers said, leaving consumers with “monopolies or duopolies in most areas of the country.”

The Federal Communications Commission is investigating allegations that Comcast has been blocking BitTorrent users for anticompetitive reasons. Comcast, meanwhile, says it has slowed peer-to-peer upstream traffic in an effort to relieve network congestion during peak user hours.

Conyers declared that antitrust law was the appropriate tool to combat anticompetitive actions in the Internet market, rather than prescriptive regulations drafted and supervised by the FCC.

“Antitrust law is not regulation. It exists to correct distortions of the free market, where monopolies or cartels have cornered the market, and competition is not being allowed to work,” Conyers said.

In some respects, Conyers’ reliance on antitrust laws created a century ago to break up practical steel and oil trusts is his only option, because his panel does not have jurisdiction over federal communications laws. That belongs to the Energy and Commerce Committee.

In May 2006, the Judiciary Committee approved a net neutrality bill that would have amended the Clayton Act, an antitrust law passed in 1914 when Woodrow Wilson was president, to require broadband-access providers to interconnect their facilities on reasonable and nondiscriminatory terms; operate their networks in a nondiscriminatory manner so that unaffiliated content, service and applications have an equal opportunity to reach consumers; and refrain from interfering with consumer access to lawful content, services and applications.

The bill (H.R. 5417) passed by a 20-13 vote. Every committee Democrat supported it but 13 of 19 Republicans did not, even though then-committee chairman James Sensenbrenner (R-Wis.) was the chief sponsor.

House Republican leaders refused to bring the bill up for a vote on the House floor. Some Republicans remain uneasy about government intervention.

“I am concerned that the heavy hand of government could deter investment and innovation in technology that will enable networks to advance in the future,” said Rep. Steve Shabot of Ohio, the top Republican on the antitrust task force.

One concern about antitrust law is the time and cost of litigation. But Stephen Calkins, professor of law at Wayne State University, said it was “greatly misleading that all the cases take years and years” because many cases are settled before trial.

“The reality is that almost no cases are litigated all the way to a final outcome,” Calkins said. “In a typical private antitrust case, there is a complaint, and then discovery and then a settlement.”

Sensenbrenner said aggrieved parties probably wouldn’t get paid if they had to rely on the FCC to police the Internet.

“Antitrust laws are not regulations in that some federal agency tells you what you can do and can’t do,” Sensenbrenner said. “If somebody is aggrieved they can file a law suit and if they are able to prove anticompetitive action, then they can win treble damages.”

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