Antitrust Oversight of an Antitrust Dispute: An Institutional Perspective on the Net Neutrality Debate

Abstract

The term "net neutrality" describes various proposals for regulatory intervention in the Internet marketplace. For example, under one type of proposal embodied in pending legislation, regulators would ban a broadband Internet access provider (such as Comcast or Verizon) from reaching commercial agreements with particular applications and content providers to provide the sophisticated quality-of-service techniques needed to support unusually performance-sensitive applications and content, such as real-time video streaming or multiplayer online videogames. Such proposals will likely be, one way or the other, a principal focus of telecommunications policy for the next decade.They have captured the attention of Congress, where several bills on the topic have been introduced; of legal, economic, and technology scholars across the ideological spectrum; and, of principal interest here, two key federal agencies: the Federal Communications Commission and the Federal Trade Commission. Most discussions of net neutrality focus on the merits of the debate: on the substantive costs and benefits of government intervention in the broadband market. This paper focuses instead on the comparatively neglected institutional dimension of the debate: an inquiry into which federal agencies are best positioned to resolve net neutrality disputes when they arise. As the paper argues, the net neutrality controversy is best understood as a classic antitrust dispute about "vertical leveraging," and the institutions most likely to appreciate the economic complexities of that dispute are the nation's specialized antitrust agencies: the Justice Department and the FTC. Because these agencies regulate the economy at large rather than a single industry, they are less vulnerable than the FCC to capture by industry factions; they are less likely to develop industry-specific bureaucracies with incentives to keep themselves relevant through over-regulation; and, because of their firm grounding in antitrust enforcement, they are more likely to resolve competition-oriented disputes dispassionately and on their economic merits.The paper thus argues for reviving in this context the competition-policy model that prevailed for much of the final quarter of the last century: a regime in which antitrust authorities, rather than industry-specific regulators, take the lead in addressing vertical-leveraging claims against providers of telecommunications transmission platforms.