roosevelt institute

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Transcript: Community Broadband Bits Episode 258

This is the transcript for episode 258 of the Community Broadband Bits Podcast. Researchers from the Roosevelt Institute join our host Christopher Mitchell to discuss antitrust policy and Internet access. Listen to this episode here.

Marshall Steinbaum: This is us choosing a set of policies that is the worst of both worlds, that is both deregulatory and anti-competitive. Instead you can do both.

Lisa Gonzalez: This is episode 258 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This week Christopher visits with two other policy folk from the Roosevelt Institute, Marshall Steinbaum and Rakeen Mabud. Earlier this year the Roosevelt Institute released a report that examines how antitrust enforcement has changed and how those changes have impacted the telecommunications industry. Christopher, Marshall and Rakeen consider how that approach has affected people who may or may not subscribe to Internet access services. You can download the report and learn more about the organization at rooseveltinstitute.org. Now here are Christopher with Marshall Steinbaum and Rakeen Mabud.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell and today I'm speaking with two folks from the Roosevelt Institute. Marshall Steinbaum, the senior economist and fellow at the Roosevelt Institute. Welcome to the show.

Marshall Steinbaum: Thank you. It's great to be here.

Christopher Mitchell: We also have Rakeen Mabud, the program director at Roosevelt Institute. Welcome to the show.

Rakeen Mabud: Thanks, nice to be here.

Roosevelt Institute Argues for Better Broadband Policy - Community Broadband Bits Podcast 258

As the telecommunications and broadband market has become more and more consolidated, it has drawn more attention, leading to more attention from people that actually care about functioning markets. Enter the Roosevelt Institute and their report, Crossed Lines: Why the AT&T-Time Warner Merger Demands a New Approach to Antitrust.

Roosevelt Institute Senior Economist and Fellow Marshall Steinbaum and Program Director Rakeen Mabud join us to talk about the failing broadband market and what can be done at both the federal and local levels.

Marshall focuses more on the federal level and antitrust while Rakeen discusses local solutions that local governments can implement. We talk about the FCC, the FTC, the history and future of competition in telecommunications, and how local governments can make sure low-income Internet access projects stay funded in the long term.

This show is 31 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed

Transcript below. 

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.

Crossed Lines: Why the AT&T-Time Warner Merger Demands a New Approach to Antitrust

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As federal agencies examine the potential consequences if the AT&T - Time Warner merger is allowed to proceed, how we analyze antitrust also needs to be reevaluated. 

A new report from the Roosevelt Institute takes a closer look at how antitrust enforcement philosophy has changed, how that change has enabled our current state telecommunications in which a few large anticompetitive players control the market. The authors offer recommendations and cautionary predictions that may arise if we continue without reassessing how we scrutinize these large scale mergers.

Authors Marshall Steinbaum and Andrew Hwang complement each other with economic and legal approaches. Steinbaum is Senior Economist and Fellow at the Roosevelt Institute and has also written for Democracy, Boston Review, The American Prospect, and The New Republic. He earned his Ph.D. from the University of Chicago Economics Department in 2014. Hwang is a legal fellow at the Roosevelt Institute and has also been an associate at Simpson Thacher & Bartlett LLP, working on transactions involving securities issuance, mergers and acquisitions, and corporate lending. He received his J.D. from the Duke University School of Law in 2014 and B.A. in economics and political science from the University of Chicago in 2011.

The report notes how scrutiny of mergers has come to depend on the perceived harm the results will have on consumers, but such a narrow focus results in harming competition.

Instead, regulators should adopt a more holistic view of market power, specifically incorporating analysis of upstream impact of anticompetitive behaviors, especially those enabled by mergers. This would entail closer scrutiny of vertical mergers, positive price discrimination, and non-price-based schemes to profit excessively by withholding access to consumers.

Several specific recommendations caught our attention as particularly relevant approaches, including:

Regulators should utilize Section 2 of the Sherman Act to a greater degree by taking enforcement actions against antitrust violators, up to and including undoing previous mergers that have proven anti-competitive after the fact.

Roosevelt Institute Examines Comcast's Internet Essentials

In 2011, Comcast commenced its Internet Essentials program with great fanfare from then FCC Chairman Julius Genachowski. We looked at the program in detail and described Comcast's decision to withhold the program for two years to use as a carrot in a bid to secure the NBC merger. In addition to acquiring NBC, Comcast received great public relations press.

The Roosevelt Institute's Next New Deal Blog, recently ran an article by John Randall in which he examined the program in depth. He concludes that the program is an effective distraction from the real problem - lack of competition. In addition to placating policy makers to prevent meaningful changes, the program turns a hefty profit for Comcast and efficiently mines for new customers.

The program, touted as a way to reduce the digital divide, established onerous criteria to qualify for the $9.95 monthly service. Children in the household must qualify for the National School Lunch Program, there cannot be any unfinished business between the household and Comcast, participants must be new customers, and households must be located in an area served by Comcast.

I have had my own experience with the Internet Essentials program. My small family qualified and we now receive up to 3/1 Mbps from Comcast; prior to the program, we paid twice as much for 1 Mbps Wi-Fi. Randall is correct when he describes the program as a "customer acquisition program." A common expression goes "The slowest speed you will accept is the fastest speed you've experienced." So true. As more of my kids' homework depends on a usable Internet connection, we will need to sacrifice somewhere else to keep our 3 Mbps and we will do it. Our choices are limited because competition is scarce, even though we live in a major metropolitan area. Comcast, you have us. Nicely played!

If Comcast really wanted to help close the digital divide, it would make Internet Essentials a permanent program and ease the restrictions. I qualify because my kids qualify but there are millions of other people, including single adults and seniors, who do not and they need the Internet just as much as I do.