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The world of communications has been dominated for three decades, since United States v. AT&T, by a rather unusual confluence of antitrust and regulation. This has led to several noteworthy cases over the years addressing the interplay of the two regimes and whether the Communications Act overrides or immunizes certain communications companies or practices from antitrust scrutiny.
Luckily that’s been settled. In today’s environment, the consequence is that AT&T’s multi-billion dollar proposed acquisition of wireless rival T-Mobile will be reviewed both by the Justice Department’s Antitrust Division and the FCC. While there are some differences — DOJ must sue to block the deal, while affirmative FCC approval is required — the reality is that both agencies will apply similar competition analysis to the transaction.
That’s where things get a bit dicey. For one (although beyond the scope of this post), there’s been a long-running policy debate over whether FCC review and approval adds anything or is now redundant. More significantly, though, both DOJ and the FCC have shown a remarkable symmetry when it comes to “vertical” issues. That is, when competitive concerns arise from the relation between a firm and “downstream” rivals — for instance, as in AT&T, local and long-distance telephone providers — both agencies have increasingly opted for behavioral rather than structural remedies. (The latter go to the number and size of firms in a market, for instance by divestitures, while the latter direct the integrated post-merged firm what it can and cannot do in specified markets.)
Although the AT&T/T-Mobile deal has both horizontal and vertical elements, most media and analyst discussion to date has focused on direct competition for wireless subscribers, the classic horizontal concentration question. Regardless of the result there, observers can expect behavioral injunctions, whether by DOJ consent decree or FCC “conditions” to approval, addressing the deal’s vertical factors, for instance backhaul provided by landline telecom special access services and access to content (Web, television/video, etc.) from unaffiliated providers.
Behavioral conditions have been a growing feature of competition review in communications transactions in the U.S. for years, from AT&T/McCaw Cellular in 1993 to AOL/Time Warner in 2000 to Google-ITA earlier this year. Whether they work well, or not, is a different story for a different post. The record of their relevance and effectiveness is most decidedly mixed.
Nearly 10 years ago, days after the 9/11 terrorist attacks, I drove home to the Washington, DC suburbs from Santa Fe, New Mexico. It was a long, long trip, some 28 hours of driving over two and 1/2 days, but an experience like no other. There was a special sense of community, of shared loss, of egalitarianism that pervaded the highways. Flags and signs hung from overpasses. Everyone listened to the same news alerts. People made eye contact at rest stops and restaurants, nodding knowingly about the inner rage, and determination, affecting the United States. In many ways, it was a highly spiritual experience and a unique time in this country.
Sunday’s special ops killing in Pakistan of Al Qaeda leader Osama bin Laden — mastermind, symbol and financial underwriter of the Al Qaeda network — produced much of the same feelings. Twitter and social media were overwhelmed. Young people, who have never known a United States without its current national security state apparatus, celebrated in front of the White House. CNN and the other television news networks served as a place of gathering for Americans of all races, backgrounds and socio-economic status.
Bin Laden’s theory was that Western democracies are weak and thus that direct terrorist attacks would splinter the citizenry and end Western involvement in the Middle East. He got it entirely backwards. The reality is that 9/11 united the United States. We debate and fight about tactics, long-term strategy and effectiveness, but since that day no American can look at the massive hole of ground zero in Manhattan’s financial district, or the new granite walls of the Pentagon, without recalling where they were and how they felt on 9/11. That’s a legacy that has already outlasted bin Laden.
bin Laden was special ops "double tapped" in the forehead. Guess AK-47 marksmanship training FAILED for that bastard. A fitting end. There’s another way in which bin Laden’s death has once again transformed this country from a nation of strangers to a shared community. This president, whose policies on healthcare, deficit reduction and the like are attacked from all sides, risked everything to get America’s most well-known terrorist enemy. If the operation had failed Obama would have been a crippled leader, like Jimmy Carter after the 1980 Iranian hostage rescue operation faltered in the desert sands, with re-election impossible. His was a balls-out call. For a Democrat, especially, to maintain secret, unilateral “black” intelligence operations in foreign countries has been all but anathema. Obama acted more like Ronald Reagan than either W. or Bush 41 ever did.
John Ullyot, a former Marine intelligence officer who served as a Republican spokesman on the Senate Armed Services Committee, said the operation was “a gutsy call because so much could have gone wrong. The fact that Obama approved this mission instead of the safer option of bombing the compound was the right call militarily, but also a real roll of the dice politically because of how quickly it could have unraveled.”
Obama Finds Praise, Even From Republicans | NYTimes.com.
No one is criticizing the decision to assassinate bin Laden. That in itself is simply amazing, another sign of the feelings of community pervading this country. They will not last, of course. But today we are once again all Americans.
One difference is that although worldwide support for American spiked after 9/11, it seems even Arabs and other Muslims have now largely abandoned the anti-Western Jihad mentality that bin Laden fostered. The revolutions in Egypt, Tunisia, Bahrain and Libya re not being driven by radical Shi’ite imams, rather by middle class tech executives and students. This year’s Arab Spring movement is secular and largely non-violent. American flags are not being burned and our government — massively out of character historically, and at long last — actually stood on the side of the protesters and against entrenched, repressive Arab governments. That’s another arrow in Al Qaeda’s coffin, and another way in which, in the instantly connected global community of today’s Earth, we really are all Americans.
Bin Laden was adept at convincing smaller, regional terrorist groups that allying with Al Qaeda and focusing on America were the best ways to topple corrupt regimes at home. But many of his supporters grew increasingly distressed by Al Qaeda’s attacks in the last few years — which have killed mostly Muslims — and came to realize that bin Laden had no long-term political program aside from nihilism and death.
The Arab Spring, during which ordinary people in countries like Tunisia and Egypt overthrew their governments, proved that contrary to Al Qaeda’s narrative, hated rulers could be toppled peacefully without attacking America. Indeed, protesters in many cases saw Washington supporting their efforts, further undermining Al Qaeda’s claims.
The End of the Jihadist Dream | NYTimes.com.
According to the New York Times, Texas attorney general Greg Abbott has launched an antitrust investigation of Google, based on the concept that deviations from “search neutrality” are anticompetitive and unlawful. Texas Attorney General Investigates Google Search | NYTimes.com.
The examination involves the fairness of Google search results, a concept called search neutrality. Some companies worry Google has the power to discriminate against them by lowering their links in search results or charging higher fees for their paid search ads.
This is utterly ridiculous. Google does not compete with the companies listed in its search results, but instead with other search engines for advertising. Anything Google may or may not do — and its mathematical algorithms leave precious little room for human bias — in Web search query results has no effect whatever on advertising competition. Search is by definition subjective because someone or something has to rank and order sites, but more importantly it is a free product. If anything, search bias would harm Google and help its search competitors (principally Microsoft-Yahoo!) by giving them a competitive advantage for search users looking for so-called “objective” Internet search results.
And in the only relevant market that counts — advertising — search neutrality is completely irrelevant. Even if advertisers pay for higher listings in search placement, as they can do for all Internet and search advertising (including “sponsored” or “promoted” search results on every major search site), that’s no different from paying for a full-page or inside front cover ad in a traditional magazine or newspaper. In the marketplace, that’s a completely acceptable, in fact desired, method of competition.
Now the search neutrality complainants argue that Google can “leverage” its search dominance into other markets. For instance, they say:
with its so-called Universal Search setup, Google is using its search engine monopoly — which controls an estimated 85 per cent of the global market — to unfairly favor its own services over those of its competitors. Universal Search transforms Google’s ostensibly neutral search engine into an immensely powerful marketing channel for Google’s other services. [I]t allows Google to leverage its search engine monopoly into virtually any field it chooses. Wherever it does so, competitors will be harmed, new entrants will be discouraged, and innovation will inevitably be suppressed.
Why the [EU] Google Antitrust Complaint is Not About Microsoft | The Register
As any antitrust lawyer knows full well, “leveraging” as a competitive concern is not unlawful and represents a discarded, 1960s-era theory of antitrust law. So this Texas investigation is really social policy (and bad policy, at that) on search engine technology masquerading as an antitrust issue. Get with it, A.G. Abbott, and be honest about what you are doing, which has nothing at all to do with competition or antitrust.
Even worse, if the Times’ sources are right, it seems that Microsoft itself, and my old antitrust colleague Rick Rule of Cadwalader, are behind the investigation.
The Texas attorney general has asked Google for more information on several companies, Google said. They include Foundem, a British shopping comparison site, SourceTool, a business search directory and myTriggers, which collects shopping links. In [a] Google blog post, [a company rep] drew an association to Microsoft. He said that Microsoft finances Foundem’s backer and that its antitrust attorneys represent the other two. Foundem is a member of the Initiative for a Competitive Online Marketplace, a European group co-founded and sponsored by Microsoft. SourceTool and myTriggers are clients of Cadwalader, Wickersham & Taft, the law firm that represents Microsoft on antitrust issues.
Note also that Foundem runs the searchneutrality.org Web site.
I don’t agree with guilt-by-association for lawyers in private practice. But if Microsoft is financing these complaints, that just reinforces my long-held view that antitrust laws can be and frequently are used strategically to restrain competition and block rivals just as much as they can and should be used to pry open markets from dominance by monopolists.
You pick which motivation is at work here. My conclusion is obvious.
The outcry over federal judge Vaughn Walker’s decision overturning California’s Proposition 8 — which declared same-sex marriages unlawful — is hardly atypical where the Constitution is concerned. Why should a single judge, or nine (Supreme Court) judges, have the power to override the legitimate majority vote of citizens in a democracy?
The answer is that this is how it has always been in America. The constitutional checks and balances established by the Founding Fathers were intended to make the United States a republic; a political union in which the rights of those who are NOT in the majority are protected. That is why the Bill of Rights was added almost immediately after ratification of the Constitution. That is why the First Amendment protects the “free exercise” of religion from government control. Because in America, civil rights include the right not to be oppressed by the majority when essential liberties are concerned.
This is exactly how our constitutional democracy is supposed to work. Don’t blame federal judges for doing their jobs. The concept of judicial review has been at the core of our checks-and-balances democracy since the landmark Marbury vs. Madison ruling in 1803.
The Pro9 8 Decision—One Judge vs. 7 Million Voters? | SF Chronicle.
One can disagree with whether morality is a valid basis for legislation outlawing certain behavior. Constitutional law is split, with some decisions, like the 2003 case in which the Supreme Court overturned criminalization of consensual sodomy, indicating that moral values cannot trump individual rights. That rationale, of course, could also be extended to a variety of issues — from abortion to alcohol to public sex or nudity — in which only the sensibilities of others are affected.
The difference here is that, under the law as it stands now, legislation must have a secular purpose to survive constitutional challenge. The proponents of Prop 8 argued only that the initiative was intended to further society’s interest in procreation, that is child-bearing. But if that were the case, Judge Walker cogently explained, then fertility should be a precondition to traditional marriage, and couples unable to conceive or not wanting children would be barred from marrying. Not so long ago, interracial marriages were also unlawful. The outcry against the 1967 Supreme Court decision striking down such laws subsided rather quickly, and in my view that’s a good thing.
As if to prove Walker’s point, Los Angeles Cardinal Roger Mahony released a statement on Wednesday that said, “Those of us who supported Prop 8 and worked for its passage did so for one reason: We truly believe that marriage was instituted by God for the specific purpose of carrying out God’s plan for the world and human society. Period.”
Why the Prop 8 Rung Scares Religious Conservatives | NewsOK
200 years ago slavery was accepted and written into the Constitution. The Fourteenth Amendment changed all that after the Dred Scott decision declared that slaves were property and not citizens. It took a long and brutal civil war to make the leap, but America was and is better off. Whether or not you agree that gay marriage should be constitutionally protected, the system of judicial review is quintessentially American and something to be celebrated.
It is completely beyond my why the Obama Administration and congressional Democrats could be this obtuse. No one should want — and I doubt any American really does support — the government standardizing serving sizes and recipe compositions, even on health grounds.
Remarkably, Section 4205 of the new health reform law, which requires chain restaurants and vending machines to provide nutrition notices, instructs the HHS Secretary to:
Consider standardization of recipes and methods of preparation, in reasonable variation in serving size and formula of menu items, space on menus and menu boards, inadvertent human error, training of food service workers, variations in ingredients…
HHS Secretary to Regulate Serving Sizes and Recipes for Cheeseburgers and Fries | John Goodman. Who could have known? That’s in part because the provision literally was buried:
You’ve heard the phrase “buried in the bill,” of course. Section 4205 of the “Patient Protection and Affordable Care Act,” the health care reform bill President Obama signed on March 23, 2010 is contained on pages 1206-14 of a 2407 page bill. It could hardly be more buried than that.
Food Lability Law Blog.
And so, America has gone from “Cheeseburger in Paradise” to “I Can Has Cheeseburger” to self-proclaimed “reformer” rants against Five Guys burgers as Xtreme Eating. What a country! It’s all well and good that Ms. Obama’s pet issue is childhood obesity, but outlawing fatty and big meals will, like illegal drugs, just make them more desirable. So this proposal for more government will inevitably backfire, as well as being totally repulsive from a civil liberties standpoint.
Yesterday a federal district judge ruled the “National Day of Prayer” unconstitutional. But observing such a commemorative occasion involved no compulsion, discrimination or penalty on or against any observer of any religious doctrine. So what’s the rub?
Lots of Americans realize the First Amendment protects freedom of religion. It actually has two parts. The 1st guarantees the “free exercise” of religious beliefs. The 2nd prohibits any “establishment of religion” by the government. It’s the second clause — known unoriginally as the “establishment clause” — that is in play when debating invocations at public events, schools and the like.
“A determination that the government may not endorse a religious message is not a determination that the message itself is harmful, unimportant, or undeserving of dissemination,” she said. “Rather it is part of the effort to carry out the Founders’ plan of preserving religious liberty to the fullest extent possible in a pluralistic society.”
Personally I think there’s a difference between making all elementary school students recite the Lord’s Prayer and ordaining a national day, really just an honorific, to recognize the role of prayer in American society. The former was declared unconstitutional in the early 1960s and few citizens today would object to that significant step toward religious tolerance and diversity. But as a constitutional matter, it is simply not the case that the US Constitution’s protections for religious freedom mean the government can support or promote either specific denominations (e.g., Anglicans over Baptists) or movements (e.g., Christianity over all the rest). At the margin, things like a National Prayer Day have little relevance except to those who stand on principle and refuse to compromise, which in US constitutional jurisprudence has always been a discrete and insular minority.
Earlier this week, one month after originally scheduled and following a year of study based on more than 30 requests for public comment — generating some 23,000 comments totaling about 74,000 pages from more than 700 parties — the Federal Communications Commission (FCC) released a 360-page report to Congress on broadband Internet access services. The National Broadband Plan (NBP) encompasses more than 200 recommendations for how Congress, other government agencies and the FCC can improve broadband availability, adoption and utilization, especially for meeting such “national purposes” as economic opportunity, education, energy and the environment, healthcare, government performance, civic engagement and public safety.
Titled Connecting America and praised on its publication by President Obama,1 the NBP presents a wide range of legal, policy, financial and technical proposals, all devoted to meeting the legislative order—first articulated in the American Recovery and Reinvestment Act of 2009 (ARRA)—of recommending ways to make broadband ubiquitous for Americans. Much of the general outlines and major recommendations of the plan were revealed in a series of public appearances and media briefings by FCC Chairman Julius Genachowski over the past several weeks. Only the NBP’s executive summary was made available before the full plan’s official March 16 publication. The public release of the entire document reveals the whole plan, including details on the recommendations as well as the reasoning behind them and the FCC’s goals.
The ambitious NBP sets as a national goal the delivery to all Americans of 100 megabits per second (Mbps) Internet service within 10 years, informally known as the “10 squared” objective. Its premise is that “[l]ike electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life.”2 The policies and actions recommended in the plan fall into three major categories: fostering innovation and competition in networks, devices and applications; redirecting assets that government controls or influences in order to spur investment and “inclusion”; and optimizing the use of broadband to help achieve national priorities.
The FCC’s plan addresses wide range of interrelated issues, such as intercarrier compensation, universal service reform, spectrum reallocation (making 500 megahertz of spectrum newly available for broadband within 10 years), digital literacy, E-Rate (Schools and Libraries Program of the Universal Service Fund) services, set-top-box unbundling, affordability, “smart grid” electrical services, telemedicine, state and municipal broadband networks, distance education, wireless data services, homeland security and first-responder communications, wireless connectivity to digital-learning devices, Internet anonymity and privacy, data-center energy efficiency, video “gateway” network interface devices, and use of unlicensed spectrum (such as WiFi). The plan includes a proposal for the federal government to repurpose $15.5 billion in existing telecom-industry subsidies away from traditional landline telephone services to broadband, concluding that—
If Congress wishes to accelerate the deployment of broadband to unserved areas and otherwise smooth the transition of the [Universal Service] Fund, it could make available public funds of a few billion dollars per year over two to three years.3
Release of the NBP marks the start of what is likely to be a long and hotly debated implementation process, as the plan pits the interests of different industry segments against one other and tests the limits of the FCC’s regulatory authority.4 While lauding the plan’s aspirations, some critics in the first days after its release include broadcast television stations that are being asked to “voluntarily” relinquish valuable digital spectrum, satellite and cable companies that object to further regulation of their so-called navigation devices and rural telephone providers that are concerned with the potential loss of substantial Universal Service Fund (USF) revenues. Information technology (IT) and content delivery networks (CDNs) also have expressed concern that the FCC’s related net neutrality initiative would circumscribe their ability to offer quality of service (QoS) and packet-prioritized media services. Free-market advocates (both think tank and government) as well as Republican FCC Commissioner Robert McDowell have already declared that the plan is unnecessary or at least unnecessarily regulatory.5
Connecting America details a series of economic and public policy goals for the United States, which according to some studies has fallen in penetration and “adoption” of broadband Internet services from first in the world in the late 1990s to somewhere between 15th place to 20th place as of 2008.6 These goals are highlighted below.
- At least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 Mbps and actual upload speeds of at least 50 Mbps.
- The United States should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation.
- All Americans should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose.
- Every American community should have affordable access to at least 1 gigabit per second broadband service to anchor institutions, such as schools, hospitals and government buildings.
- To ensure the safety of the American people, every first-responder should have access to a nationwide, wireless, interoperable broadband public-safety network.
- To ensure that America leads in the clean-energy economy, all Americans should be able to use broadband to track and manage their real-time energy consumption.
All of these goals are supported by proposals for the federal government to become more deeply involved in collecting and assessing statistical metrics on the availability, speed and use of broadband services and that the FCC impose “performance disclosure requirements” and “performance standards” on broadband service providers, including wireless and cellular carriers.7 As the trade publication Telecommunications Reports notes:
This recommendation illustrates how the plan could bump up against independent congressional initiatives. Sen. Amy Klobuchar (D.-Minn.) introduced a broadband performance management bill along similar lines that directed an FCC rulemaking action, rather than NIST standards, and which mandated industry use of the terms as the FCC defines them.8
In some of its more controversial recommendations, the NBP proposes that broadband success be measured not only by the statutory objective of “access to broadband capability,”9 but also by adoption percentages and affordability, using a national commitment to “inclusiveness” as the principal justification. “While it is important to respect the choices of those who prefer not to be connected, the different levels of adoption across demographic groups suggest that other factors influence the decision not to adopt. Hardware and service are too expensive for some. Others lack the skills to use broadband.”10 The FCC also proposes creation of a Digital Literacy Corps, modeled after President John F. Kennedy’s Peace Corps initiative, to educate minority and disadvantaged citizens on the use and importance of computers and Internet services. Having successfully subsidized the connection of more than 95 percent of America’s classrooms to the Internet, the FCC’s plan further recommends that the E-Rate program be expanded to cover off-campus network use, e-readers and a variety of even newer functions. Among the recommendations for congressional action, the highest price tag—up to $16 billion—would be for grants to cover capital and operational costs of an interoperable public-safety mobile broadband network. As was revealed previously, the NBP also proposes auctioning the 700-megahertz “D block” rather than allocating it to public safety and first-responder services.
There are likely to be numerous FCC notice-and-comment rulemakings, legislative hearings and policy workshops initiated over the next 12 to 18 months to implement the NBP. As Connecting America emphasizes in its executive summary:
Public comment on the plan does not end here. The record will guide the path forward through the rulemaking process at the FCC, in Congress and across the Executive Branch, as all consider how best to implement the plan’s recommendations. The public will continue to have opportunities to provide further input all along this path.
The FCC has stated it will publish a timetable of actions in the near future and is anticipated to begin what may be considered more challenging NPRM proceedings, such as USF reform, within 60 to 90 days. Whether in the IT, telecom, energy or healthcare industries, companies involved in a wide range of different markets are likely to be affected by the National Broadband Plan for years to come and should consider participating in the rulemaking and parallel legislative processes.
**[This is a client alert I prepared for my law firm, Duane Morris LLP, which holds the copyright. The alert is available here.]
Footnotes
- “President Obama Hails Broadband Plan,” Washington Post, March 16, 2010.
- Connecting America at xiv, 9.
- Connecting America at xiii.
- See, e.g., “FCC Chairman Genachowski Confident in Authority over Broadband, Despite Critics,” Washington Post, March 3, 2010.
- “FCC’s National Broadband Plan Raises Divisive Issues,” USA Today, March 17, 2010. Compare B. Reed, “Who Else Wants National Broadband?”, Business Week, March 16, 2010, with J. Chambers, “Why America Needs a National Broadband Plan,” Business Week, March 16, 2010.
- Connecting America at xiv.
- Connecting America at 35–36. “The FCC and the U.S. Bureau of Labor Statistics (BLS) should collect more detailed and accurate data on actual availability, penetration, prices, churn and bundles offered by broadband service providers to consumers and businesses, and should publish analyses of these data.” Id. at 35.
- T.R. Daily, March 15, 2010, at 2.
- ARRA § 6001(k)(2)(D), 123 Stat. 115, 516 (2009).
- Connecting America at 23.
Study Reports Americans Believe Internet Access Is a “Fundamental Right” [PCMagazine].
But in the United States, our political system does not even make food, shelter and clothing fundamental citizen (let alone human) rights. So where does anyone get off suggesting Congress or the FCC should declare that the Internet is something more important than the reality of basic human needs? This is a completely bogus debate and the “study” — an opinion poll, no less — is just irrelevant. Later I’ll tell you how I _really_ feel. 😉
Posted via email from glenn’s posterous
 Hearing Room It is hard to understand how “conference reports” from Congress on pending legislation can have fallen from 200 per year to just 11 over the past three decades. Secret Bill Writing On the Rise [Washington Post]. But it indicates, sadly, that laws in America are increasingly being made in back rooms, not the public forums our system of politics has traditionally used. That may be mere window-dressing, but it is IMPORTANT symbolically, in my view.
In a letter to C-SPAN Chairman Brian Lamb, House Republican leader John Boehner wrote, “Unfortunately, the president, Speaker (Nancy) Pelosi and Senate Majority Leader (Harry) Reid now intend to shut out the American people at the most critical hour by skipping a bipartisan conference committee and hammering out a final health care bill in secret.” The complaint sounded a lot like one nine years ago, when Sen. Kent Conrad, D-N.D., said Republicans “locked out the Democrats from the conference committee” meeting on the budget. “We were invited to the first meeting and told we would not be invited back, that the Republican majority was going to write this budget all on their own, which they have done. So much for bipartisanship.”
It’s not a good political sign at all that liberals seem to be departing the president in droves. The more things “change,” the more it appears politicians give us more of the same.
As the Nation’s Pulse Races, Obama Can’t Seem to Find His [NYTimes.com].
President Obama’s favorite word is “unprecedented,” as Carol Lee of Politico pointed out. Yet he often seems mired in the past as well, letting his hallmark legislation get loaded up with old-school bribes and pork; surrounding himself with Clintonites; continuing the Bushies’ penchant for secrecy and expansive executive privilege; doubling down in Afghanistan while acting as though he’s getting out; and failing to capitalize on snazzy new technology while agencies thumb through printouts and continue their old turf battles.
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September 8th, 2011 | 
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