FCC’s claim that one ISP counts as “competition” faces scrutiny in court

[Guest]

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A Federal Communications Commission decision to eliminate price caps imposed on some business broadband providers should be struck down, advocacy groups told federal judges last week. The FCC failed to justify its claim that a market can be competitive even when there is only one Internet provider, the groups said. Led by Chairman Ajit Pai, the FCC's Republican majority voted in April of this year to eliminate price caps in a county if 50 percent of potential customers "are within a half mile of a location served by a competitive provider." That means business customers with just one choice are often considered to be located in a competitive market and thus no longer benefit from price controls. The decision affects Business Data Services (BDS), a dedicated, point-to-point broadband link that is delivered over copper-based TDM networks by incumbent phone companies like AT&T, Verizon, and CenturyLink.

But the FCC's claim that "potential competition" can rein in prices even in the absence of competition doesn't stand up to legal scrutiny, critics of the order say.

IMO, the condition they push for with a half mile distance for half of a county's residents is just BS. Some startup or other ISP could simply be found in an area where most of the population lies but only provide access to any percent whether its 1% to 90%. That and ISPs could have an agreement to not compete with the same residents.

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"In 2016, after more than 10 years of examining the highly concentrated Business Data Services market, the FCC was poised to rein in anti-competitive pricing in the BDS market to provide enterprise customers, government agencies, schools, libraries, and hospitals with much-needed relief from monopoly rates," Phillip Berenbroick, senior policy counsel at consumer advocacy group Public Knowledge said.

But after Republicans gained the FCC majority in 2017, "the commission illegally reversed course without proper notice and further deregulated the BDS market, leaving consumers at risk of paying up to $20 billion a year in excess charges from monopolistic pricing," Berenbroick said.

I still fail to see how deregulating prices would help pricing when its already a monopoly for this market.

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"The Order concludes, contrary to the record and established antitrust analysis, that duopoly markets are sufficiently competitive to discipline market power and prices, and that potential competition can effectively check market power, even by monopoly service providers," the groups wrote.

Fewer than 10 percent of potential customers benefit from price controls under the FCC's new market test, according to Democratic FCC Commissioner Mignon Clyburn.

Would be nice to hear what percent of potential customers would the FCC's plans be a detriment.

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The FCC's new competitive market test was "carefully tailored to yield the "desired result" of "unwinding the longstanding price cap regulatory regime," the amicus curiae brief said.

The brief continued:

Under the "Potential Duopoly" test, a market will be considered suitably likely to enjoy the benefits of competitive entry at some undetermined time in the future. The commission freely acknowledges that, as a result of removing regulatory constraints on prices, consumers may suffer for some undetermined period with unjust and unreasonable prices. But the commission rationalizes this abandonment of its core responsibility under the statute—to prevent unjust and unreasonable rates—on the grounds that competition will eventually blossom.

"The FCC explicitly states that 'potential duopoly' competition cannot reasonably be expected to constrain price increases in the short term, but only in the 'intermediate term (i.e., several years),'" the brief said.

The FCC also claimed in its order that the "costs of regulation" likely outweigh the extra costs paid by consumers when dominant carriers can "exercise... market power... in the absence of regulation."

The FCC's new market test is thus "apparently meaningless" since the commission argues that deregulation is appropriate regardless of whether a market has competition, the advocacy groups argued.

The groups went on to say:

The order's true purpose is clear—deregulation at all costs, regardless of the facts and the record... If misrepresenting the record and constructing new economic theories is not enough to justify deregulating monopoly and duopoly markets, the commission has also put forth a theory that justifies deregulation regardless of what the record shows.

The FCC's order also argued that 5G wireless services could provide significant competition to BDS in the future but "ignore[d] the important fact that the two leading holders of 5G spectrum are Verizon and AT&T," the dominant BDS providers, the brief said.

And the motto of no regulations is strong with this one (Guess that is why he was appointed by Trump). Every move that the FCC has made since Tom Wheeler left has me liking it less and less. (Lets not mention the anti net neutrality agenda for one and that Ajit Pai was a former Verizon employee) Surprising he was re-elected to a new term despite strong criticism.

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The FCC was sued by purchasers of BDS, such as Sprint and Windstream, who could end up paying higher prices because of the FCC decision.

The FCC was also sued by some providers of BDS, including CenturyLink and a subsidiary of Frontier Communications. CenturyLink and Frontier challenged another part of the order that requires what they call "excessive annual rate reductions" in areas where price caps will continue to be enforced. The price reductions are "intended to reflect productivity gains experienced by the regulated entities over time," but the FCC's required reductions "significantly overstated efficiencies in the provision of rate-regulated BDS offerings and ignored evidence of slower productivity growth among such services relative to others," they argued.

The lawsuits were consolidated into a single case. A motion for a stay of the order pending judicial review was denied, allowing the FCC's changes to take effect on schedule.

The FCC hasn't filed a response to the Public Knowledge brief yet, but the commission defended its decision in a filing in July. The FCC said that it "reasonably considered the presence of nearby competitors" and concluded that BDS providers "are commonly willing to extend their existing network out approximately a half mile... to meet demand." The FCC's order also "reasonably concluded that the presence of two providers imposes competitive discipline," the commission told judges.

But Public Knowledge, CFA, and New Networks argued that the FCC order should be overturned because it "is arbitrary and capricious," departs from the FCC's past precedents without justification, and reached a conclusion that is contradicted by evidence in the BDS docket.

I would just like to get this out of the way, I really (to put it mildly) dislike Ajit Pai and the current direction of the FCC, but what can I do when they say they listen to what the public says, yet sweeps it away and says that its just spam.

 

Would recommend reading the original article as I have omitted some parts and I'm bad at writing news topics.

Source: Ars Technica

[Mira Yurizaki]

You still have a choice of internet or no internet. Like how North Koreans have a choice of Kim Jong Un or death during their elections

[PlayStation 2]

Not 100% sure what to think of this. I can't tell if it's going to get shot down under the Supreme Court as potentially monopolistic or some shit or if something else is gonna go on.

[The Benjamins]

Having more ISP in a area hurts customers, if we have 2+ companies laying infrastructure that is a lot of wasted money on construction, If we had one ISP less money would be spent on construction and more money would be spent on giving the customer a better experience.

 

Post is sponsored by Comcast.

[Lurick]

2 minutes ago, The Benjamins said:

Having more ISP in a area hurts customers, if we have 2+ companies laying infrastructure that is a lot of wasted money on construction, If we had one ISP less money would be spent on construction and more money would be spent on giving the customer a better experience.

 

Post is sponsored by Comcast.

Agreed, we only need 2Mbps for the top tier of speeds. Nobody needs faster internet unless they are pirates!

[The Benjamins]

1 minute ago, Lurick said:

Agreed, we only need 2Mbps for the top tier of speeds. Nobody needs faster internet unless they are pirates!

Why would you need faster When you get all your TV Shows and Movies Thought the Xfinity X1 Box through the best Pay Per View experience.

[Mira Yurizaki]

3 minutes ago, Lurick said:

Agreed, we only need 2Mbps for the top tier of speeds. Nobody needs faster internet unless they are pirates!

Really? I mean we text message and use Twitter all the time with its 140 character limit. Clearly we don't need anything more than 1Kbps.

[AshleyAshes]

 

AOL has what you guys need, right here.

[Dylanc1500]

13 minutes ago, AshleyAshes said:

 

AOL has what you guys need, right here.

No you need the latest and greatest.

 

Im slightly curious as to how many on here actually even know what this is.

[Guest]

I get unlimited data + home phone for $130 a month. I generally get 450mbps on 5GHz range and 80mbps on the 2.4GHz range. The general day-to-day tasks that people do for example, text messaging, it doesnt require much to process and send.

[Guest]

2 minutes ago, TheBeastPC said:

I get unlimited data + home phone for $130 a month. I generally get 450mbps on 5GHz range and 80mbps on the 2.4GHz range. The general day-to-day tasks that people do for example, text messaging, it doesnt require much to process and send.

Dang that is high, the only options where I am are $45 for 12mbps (Some data cap that I can't recall) or $90 for 1gbps (Good deal for this option I guess, especially considering unlimited data) however at least this is broadband and not wireless.

[WMGroomAK]

1 minute ago, Dylanc1500 said:

No you need the latest and greatest.

Thanks!  I just had this horrible flashback to picking up the phone to hear one of these blasted things!  I wonder if there is any chance someone could record that tone and just set up a bot to auto-dial the FCC and play it...

 

On Topic:  I'm really not liking any of the current direction the FCC is going and hope (although it's fleeting) that someone sues the FCC for corruption of the public process or at least finds evidence of what appears to be bribery (although they'll probably just get away with calling it Lobbying).  

 

As it stands, where I'm at, I only have a single option for hardline internet and cellular service is spotty and can not get anywhere near the hardline speeds or data usage...

[Guest]

2 minutes ago, tjcater said:

Dang that is high, the only options where I am are $45 for 12mbps (Some data cap that I can't recall) or $90 for 1gbps (Good deal for this option I guess, especially considering unlimited data) however at least this is broadband and not wireless.

Well, in Australia, we get NBN which is supposedly to be faster wifi, and yes it is, I currently have NBN and it is definitely better then my predacessor modem in which the wifi would cut out halfway while watching a youtube video or it just simply wouldnt connect. Even the home phone goes through the wifi network, I had a similar problem when installing my new modem, I had plugged the phone cable into the splitter which then goes into the wall socket in which the phone wouldnt work, so I unplugged the phone cable and plugged it into one of the WLAN ports in the modem and it worked. The cool thing is, is that the home phone and modem connect to the splitter and into the wall socket via one cable.

[Guest]

Thats one thing I can get across, with the older modems, wifi was available via phone cable, which, back in those days, using internet explorer with that type of wifi connection was very slow.

[Drak3]

41 minutes ago, Lurick said:

Agreed, we only need 2Mbps for the top tier of speeds. Nobody needs faster internet unless they are pirates!

Yo ho ho

[Dylanc1500]

21 minutes ago, TheBeastPC said:

Thats one thing I can get across, with the older modems, wifi was available via phone cable, which, back in those days, using internet explorer with that type of wifi connection was very slow.

Are you referring to DSL? As DSL is still extremely common in a lot of places and you can have speeds of roughly 45mbps. Your modem (dial-up or DSL) conversts the connection and sends it to your router which can be all in one (modem/router/WLAN). Wifi doesn't have anything to do with the connection to the Internet unless it is the bottleneck itself.

[mr moose]

Say what you want about the NBN,  it is the perfect model in this regard as retailers rarely touch infrastructure nor have dedicated areas of control.  You choose whichever one you want.  My ISP (now called RSP's) is a distant rural business not a some large company in the City.

[Jito463]

17 hours ago, Dylanc1500 said:

No you need the latest and greatest.

 

Im slightly curious as to how many on here actually even know what this is.

I know!  I know!  Do I get a cookie now?

12 hours ago, huilun02 said:

ISPs obviously colluded to lobby for deregulation.

Obviously you missed the part where the ISPs were suing the FCC over this, so I sincerely doubt they were involved in this decision.

18 hours ago, tjcater said:

The FCC was sued by purchasers of BDS, such as Sprint and Windstream, who could end up paying higher prices because of the FCC decision.

The FCC was also sued by some providers of BDS, including CenturyLink and a subsidiary of Frontier Communications.

 

[Guest]

15 minutes ago, Jito463 said:

Obviously you missed the part where the ISPs were suing the FCC over this, so I sincerely doubt they were involved in this decision.

Well you could argue that some ISPs might have been lobbying for it:

18 hours ago, tjcater said:

The FCC's order also argued that 5G wireless services could provide significant competition to BDS in the future but "ignore[d] the important fact that the two leading holders of 5G spectrum are Verizon and AT&T," the dominant BDS providers, the brief said.

But that brief isn't from the ISPs or FCC and those two ISPs have been known to go back and forth with agreeing with the FCC's claims. (During the time under Ajit Pai as I think we can agree that it is a different beast now )

[Dylanc1500]

1 hour ago, Jito463 said:

I know!  I know!  Do I get a cookie now?

But of course! How about 40,000lbs worth?

[Jito463]

2 minutes ago, Dylanc1500 said:

But of course! How about 40,000lbs worth?

[Ganz]

They pretty much say as long as there is another ISP close buy that offers anything that resembles internet service then there is competition and no monopoly.  Holy crap batman that is terrible.  Here's an example of services offered in my area:

 

Company 1:  Lowest Speed: 60mbs, Highest Speed: 1gbps, Coverage: 99% of the area. (as you can guess prices for this company are really high).

 

Company 2:  Before July 2017: Lowest: 5mbs, Highest 35mbs.  Now: Lowest 20mbs, Highest: 100mbs. Coverage: ~ 45% of the area

 

And that has actually gotten better.  It used to be that you could pretty much only get Company 1 unless you lived within a few specific blocks.  On top of that Company 1 has reliably unreliable service and they do nothing about it.  Quite frustrating.  /endrant

 

I don't know what the solution could/should be but something imo should be done to prevent all the ISP monopolizing that's been going on.

 

[mr moose]

6 hours ago, Ganz said:

I don't know what the solution could/should be but something imo should be done to prevent all the ISP monopolizing that's been going on.

 

The solution is simple, the government owns all the hardware and sells wholesale data to the ISP's.  There are no longer any physical boundaries and thus no way for any one company to "control" an area. Your isp could be in Florida while your internet connection could be in New York.

[Trik'Stari]

Why do we need apparently several pages of legal shit to say "no, a single company does not count in any way shape or form, as competition".

 

The whole thing is just fucking asinine. And if we're going to have government take control over the infrastructure, then there is going to have to be an internet bill of rights.

[mr moose]

1 hour ago, Trik'Stari said:

then there is going to have to be an internet bill of rights.

 

Bill no 1.  The CEO of any ISP who is caught shaping or limiting data on any connection where the plan is not specifically advertised as "restricted and limited", will pay the fee of $5000 for every single effected customer to an already established and audited homeless charity in that customers area.