FTC Ready to Kill Net Neutrality? (T, VZ, CMCSA, TWC)

Stock Tickers: T, VZ, CMCSA, TWC

Last night it was a little surprising to see the FTC saying that there was no need for regulation of net neutrality.  The FTC’s Deborah Platt Majoras apparently said that there was no evidence of market failure in this area and that a combination of antitrust laws and the ability for customers to complain if they feel access speeds are impeded should be enough to protect net neutrality.

What the FTC is not addressing is that these companies have been on good behavior because they have had to be on good behavior.  They are ignoring that this gives the power to the copper and fiber owners to slow down traffic that either isn’t their own customer traffic or traffic that is deemed as being too bulky in bandwidth.

It is always amazing when an agency just assumes that big companies will do the right thing just because there hasn’t been evidence of any wrongdoing.  The quote from the CNN article is almost baffling: "To date we are unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers," said Majoras. "Policy makers should be wary of enacting regulation solely to prevent prospective harm to consumer welfare, particularly given indeterminate effects on such welfare of potential conduct by broadband providers."

Hopefully this is an FCC issue more than an FTC issue.  But if they are not worried about this at all, then why on earth are they even remotely concerned about a satellite radio merger that is not over critical infrastructure?  This would end up being a huge win for AT&T (T), Verizon (VZ), Comcast (CMCSA) and Time Warner Cable (TWC) if the FTC gets its way.

Trust me when I tell you that, regardless of your political beliefs, this would mark a potentially giant blow to Joe Q. Consumer in favor of a few giant companies that own most of the copper and fiber that makes up the Internet.

Jon C. Ogg
June 28, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.