Thursday, October 12, 2017

Groups Challenge FCC Claim That One ISP Equals Competition -

While most realize the residential broadband market isn't all that competitive, lesser talked about is the lack of competition in the special access and Business Data Services (BDS) market. This market connects everything from banks, ATMs and cell towers to the internet, but has long faced monopoly control by only a handful of large telcos (usually AT&T, Verizon or CenturyLink). In fact, FCC data states that 73% of BDS markets are dominated by just one provider, 24% are served by a duopoly, and only a tiny fraction have more than two choices of BDS providers.

Needless to say, companies like AT&T and Verizon have worked pretty tirelessly at keeping it this way, despite a decade of efforts by consumer advocates and smaller companies (like Sprint & T-Mobile).

And while the sector has seen some modest additional competition from cable providers in recent years, the lack of BDS competition is still a major problem. Last year, after a decade of debate, former FCC boss Tom Wheeler began taking the ultimate step toward some reforms of this market, including something the agency rarely does for broadband: applying price caps that limit how much these mono/duopolies can over charge.

But that unfinished effort was killed by new FCC boss Ajit Pai soon after he became FCC head. Instead, Pai proposed a number of logistical changes that involved dramatically weakening the very definition of "competition." How weak? The new FCC guidelines would declare many markets "competitive" even if they only had access to one business broadband provider:

"Pai's definition of "sufficient competition" has drawn fire. The plan would treat an entire county as competitive "if 50 percent of the locations with BDS demand in that county are within a half mile of a location served by a competitive provider." A county would also be considered competitive if 75 percent of Census blocks in the county have a cable provider."
And while that certainly made telecom duopolies like Comcast and AT&T really happy, less happy are smaller competitors and consumer groups, who are now challenging the FCC's changes in court. Public Knowledge and the Consumer Federation of America and New Networks have filed an amicus curiae brief (pdf) urging the US Court of Appeals for the Eighth Circuit to vacate the FCC's order. The groups argue the FCC made a "feeble" attempt to manipulate data to try and pretend the BDS market is competitive.

"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 argued. "Curiously," the groups said the FCC also "relies on a study involving ready-mix concrete for the proposition that the addition of competitors beyond a second has diminishing returns."

Of course, manipulating data to try and hide the lack of market competition is nothing new for revolving door regulators, and ISPs pay millions to hire economists tasked with twisting, distorting and molesting data until it says whatever ISPs want it to say. Large duopoly ISPs (and the lawmakers paid to love them) whined incessantly when the previous FCC raised the definition of broadband from 4 to 25 Mbps. Instead, this new FCC has been working on numerous attempts to weaken broadband standards to pretend the telecom market is more competitive than it actually is.

When you distort the data to hide a lack of competition, it's easier to justify your apathy toward standing up to deep-pocketed campaign contributors -- and imposing policies aimed at actually doing something about it.

Let's block ads! (Why?)

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