Opening Statement

Statement of Ranking Member John Conyers, Jr.
Hearing on:  "Net Neutrality:  Is Antitrust Law More Effective Than Regulation in Protecting Consumers and Innovation?"
Subcommittee on Regulatory Reform, Commercial and Antitrust Law

Friday, June 20, 2014 at 10:00 A.M.
2141 Rayburn Building

     I thank subcommittee chairman Spencer Bachus for holding this important hearing on net neutrality and the role of antitrust law in ensuring a free and open Internet. The Judiciary Committee has a central role in studying the issue of net neutrality and, more generally, competition on the Internet, and I appreciate the chairman’s decision to assert our jurisdiction.

    Turning to the specific question of whether antitrust is more effective than regulation in addressing net neutrality, we should keep three things in mind. To begin with, we need a regulatory solution to address potential threats to net neutrality and must allow the Federal Communications Commission to do its job. Congress created the FCC to develop the expertise so that it could properly regulate the complex telecommunications industry. Any FCC rules to address net neutrality could have the benefit of addressing some potential threats to net neutrality before they fully materialize. And, it could do so in a manner that would be more comprehensive than the piecemeal approach of antitrust enforcement.

     Additionally, having a set of best practices enshrined in rules would provide certainty for industry.  The FCC’s efforts, therefore, must be given the opportunity to develop. In developing its rules to ensure a free and open Internet, the FCC should incorporate the following principles: broadband network providers should be prohibited from failing to provide access to its broadband network for any provider of content, applications, or services on reasonable and nondiscriminatory terms; broadband network providers should be prohibited from blocking, impairing, or discriminating against or otherwise interfering with the ability of any person to use a broadband service to use or access lawful content, applications, or services on the Internet; and there should be strong transparency requirements regarding clear disclosure to users of information concerning any terms, conditions, or limitations on the broadband network service.

     The FCC began its latest rulemaking process only a month ago, and we must allow that process to proceed. To the extent that we do look to antitrust law as a way of ensuring net neutrality, enforcement of existing antitrust law would be insufficient. Under current antitrust law, there is relatively little that antitrust enforcers can do outside the merger review context to address the conduct of a regulated industry like broadband Internet service with respect to enforcing net neutrality principles. Through a series of decisions, the Supreme Court has limited the potential to successfully pursue claims under the Sherman Antitrust Act arising in the net neutrality context.

     Moreover, exclusive reliance on antitrust enforcement, while having the benefit of a more nuanced and fact-specific approach to the problem, would also be a cumbersome, more limited, more resource-intensive, and after-the-fact way to develop a regulatory regime for net neutrality. Another potential approach would be for the Federal Trade Commission to use its authority under Section 5 of the Federal Trade Commission Act to stop ‘unfair methods of competition.’ While I hold an expansive view of Section 5, to the extent that this approach goes beyond the scope of the Sherman Act or other antitrust laws it would be very controversial, as my friends on the other side of the aisle would be the first to note. Moreover, antitrust law is not sufficiently broad in scope as it does not address the non-economic goals of net neutrality, including the protection of free speech and political debate.

     Former Chairman James Sensenbrenner, Representative Zoe Lofgren and I introduced bipartisan legislation back in 2006 to strengthen antitrust law to address net neutrality, in part because the FCC was doing too little at that time, in my view. I am certainly open to suggestions on how antitrust law can be better tailored to address net neutrality concerns, but if we go down that path, current law must be modified to codify net neutrality principles. Whether one supports a more antitrust approach or a more regulatory approach, inaction by Congress and regulators is not an option, as potential threats to net neutrality remain present.

     In my opening statements at our 2008 and 2011 hearings on this issue, I noted that in many parts of our country, consumers have the choice of only one or two broadband Internet service providers that effectively function as monopolies or duopolies. I noted then that the market power that these broadband providers enjoyed could lead to differential treatment of content carried by the provider depending on how much a customer pays or the financial incentives for discriminating for or against given content. The concerns I noted may have only grown since then, particularly in light of increasing consolidation in the telecommunications industry that may result in even less choice, less innovation, higher costs, and more power in the hands of fewer broadband providers.