Wednesday, August 5, 2015

Is the AT&T-DIRECTV Deal a Precursor to Increased FCC Control of the Internet?

WiFi NetworkOn July 28, 2015, the FCC granted permission for AT&T to acquire DIRECTV and merge the two companies into one combined entity (see FCC Memorandum Opinion and Order in Docket 14-90, released July 28, 2015). We will leave it to others to discuss the merits of the deal. However, there are certain aspects that could have significant implications for broadband Internet service providers specifically and Internet regulation in general. That is the issue of whether the Commission, now that it has seized Title II authority over the Internet, will begin to control the pricing of Internet services and, in fact, all Internet behavior?

In its Open Internet Order that became effective on June 12, 2015, the Commission asserted that it would forebear from using its Title II pricing authority and would not mandate specific Internet prices. Critics of the Order did not buy this and argued that it was just a matter of time before the Commission would use its section 201 and 202 regulatory authority (which it refused to forebear from) to prescribe “just and reasonable” prices as a backdoor way to control Internet prices.

Unfortunately for those who were hoping that the Commission would stay out of Internet pricing, the AT&T-DIRECTV merger includes a requirement that will be in effect for four years that is a clear instance of the FCC prescribing ISP pricing. Here is the relevant condition imposed by the FCC:

Read more here...

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