The FCC: Cop on the beat to the FTC’s firehose

This afternoon, Congress will once again take aim at the FCC’s ability to do its job as the expert agency in the communications sector. At issue this time is whether another agency with three initials—the FTC—should take over authority from the FCC. Behind the debate is the question of whether antitrust law is sufficient on its own to prevent big Internet providers from taking advantage of consumers. We think the answer is “no.”

In the recent hot debate around net neutrality, there has been continued confusion as to the relationship between regulation and antitrust law in crafting policies to ensure the continuation of an open internet. As two people who have worked extensively on antitrust policy and enforcement in our careers, we are here to clarify: these two tools are complementary to promote competition, consumer protection, and the virtuous cycle of a healthy open internet. However, while both occupy important roles, neither is sufficient on its own to address all of the critical policy considerations in the broadband age.

{mosads}As a general matter, antitrust and regulation occupy complementary positions in policymaking. Both the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) are vitally and equally necessary to protect consumer welfare and promote competition in the digital arena. But the role of antitrust agencies (both FTC and DOJ) is to enforce the laws—to prevent anticompetitive mergers from taking place, to prevent monopolization, and to investigate claims of collusion or exclusionary conduct. And the agencies are set up to do this one case at a time, and generally in an ex post fashion. That is their mandate.

In contrast, the FCC has a broader mandate. It looks at the bigger picture. It doesn’t just ask whether competition has been harmed; it asks how competition can be helped. Moreover, it is legislatively charged with taking into account factors other than competition, such as diversity of voices and localism. To this end, it operates in an ex ante fashion, making it much more prophylactic. The FCC is the cop on the beat, keeping an eye out for trouble but also helping to make the neighborhood a better and safer place. The FTC is a bit more like a firehose—it is there to put out the fire after it has started.

The instant debate over net neutrality rules exemplifies this tension well. The FCC’s recent rulemaking was an important step in restoring its ability to adopt flexible consumer protection and pro-competition policies that had been stripped from it in the Verizon decision. The FTC (and DOJ) can also play an important role. But the type of protective rules the FCC can implement are particularly important in an ecosystem like the internet, which depends on the continuing “virtuous cycle” for its success. Absent ex ante protections, it might not be apparent what harms might have been prevented in retrospect – where, for example, barriers to entry prevent disruptive new technologies or content creators from ever seeing the light of day. Consumers can’t miss what they never knew was possible. While some anticompetitive actions could sometimes trigger antitrust concerns, a law predicated first and foremost on market analyses is not well suited to the balancing of social and economic factors that impact the virtuous cycle.

In addition, the FCC’s jurisdiction over broadband also extends to many important policies that go beyond pure net neutrality, which the FTC is similarly ill suited to address. Universal service funding, emergency services, and accessibility for those with disabilities are but a few of the issues that rely on the FCC as the expert agency for direction in the rapidly developing broadband marketplace.

With its recent open Internet rulemaking, the Commission has finally done the right thing for the American people and restored its authority to address myriad broadband policies going forward. Now it moves forward on those issues as well. Now that it has, it is time to start looking forward at all that can now be accomplished with solid legal authority. As Congress continues its review of the new open internet rules in the larger debate over a possible much-talked-about Communications Act update, we urge policymakers to keep in mind this broader picture. Congress must do no harm to the FCC’s ability to stand as lookout for the American people before harm befalls them.

It is not an exaggeration to say that the ongoing success of modern communications has rested on this dual FCC/antitrust agency oversight of the industry. Antitrust is no doubt important to ensure healthy marketplaces in many sectors of our economy. But the FCC is specifically charged with the central goals of communications policy: achieving universal service, protecting consumers, promoting competition and innovation, ensuring a communications platform that supports a diversity of viewpoints. Only combined market oversight will ensure digital communications platforms capable of promoting social and economic justice necessary to support a robust democracy.

Kimmelman is CEO of Public Knowledge, a public interest research and advocacy organization. Grunes is an anittrust attorney.