Daily Digest 6/13/2018 (AT&T Defeats Department of Justice)

President Donald Trump knew right away how he felt about AT&T’s proposed $85 billion acquisition of Time Warner. He hated it. “It’s too much concentration of power in the hands of too few,” Trump said on the day the deal was struck in October 2016, adding that, if he were elected, his administration would block the purchase. Judge Richard Leon considered the matter for several months and in a lengthy opinion June 12 ruled that President Trump’s take, shot from the hip, was off the mark. The merger of media giants can move forward, despite legal objections by the Justice Department. It is hard to imagine that Attorney General Jeff Sessions, left to his own devices, would have brought such an unusual case that eschewed Republican business principles. President Trump made a snap judgment, as a candidate, and when the Justice Department followed through on his wishes, the result was a major loss.

[Speech] In America we want institutions that make our democracy strong—that seems like a no brainer. So as one line of thinking goes, antitrust enforcers should step beyond consumer welfare and think about what would be good or bad for our democracy, or for values like the free speech the First Amendment protects. The suggestion is that perhaps enforcers should broaden the consumer welfare lens to think about effects on democracy or expression. I’d like to focus my remarks today on two responses to that suggestion. First, we shouldn’t go down that road, because enforcement actions purportedly aimed at supporting our democracy carry too great a risk of inadvertently undermining our constitutional values. Second, we don’t need to go beyond the consumer welfare standard, because it can get the job done on its own.  As you consider the health of our democracy and the role of media platforms and other institutions in it, I urge you to recall the surest path to undermining the First Amendment: exercising government power based on viewpoint. The consumer welfare standard does not blind us as enforcers; it focuses our decisions on appropriate considerations like price, output, innovation, quality, and choice. Enforcement of the free markets for the benefit of consumers can be achieved with greater success, and greater fidelity to the rule of law, within the contours of the consumer welfare standard, than without.  

[Makan Delrahim is the United States Assistant Attorney General for the Antitrust Division]

When Federal Communications Commission Chairman Ajit Pai decided to do away with the widely popular “network neutrality” rules that governed the Internet, his justification was that the regulations were slowing deployment. But a new analysis by the Center for Public Integrity plus other factors cited by industry experts show that reasoning to be shallow at best and ridiculous at worst. Most pointedly, while wireline deployment did slow while network neutrality rules were in place, it was due to at least one reason that had nothing to do with regulation: carriers were running out of potential customers, according to a Center analysis of Census and FCC data. Between December 2012 and December 2014, the average population density of areas to which providers deployed wireline Internet access for the first time was 4,467 people per square mile. Between December 2014 and December 2016 — by the time regulatory talk surfaced — the average population density of areas to which providers deployed wireline Internet access for the first time was a sparse 1,593 people per square mile. Another aspect to consider regarding the slowdown in deployment is that household income in areas receiving wireline connectivity post-Title II was slightly lower than income in the more urban areas serviced earlier, between 2012 and 2014, according to the Center's analysis. Other data crunchers have shown that certain deployments of broadband, which the FCC defines as a download speed of at least 25 megabits per second, actually increased in the wake of net neutrality regulation.

I would like to explore three rather divergent policy issues, unified by my views on what I see as being in the best interests of American consumers.

1. Regulatory Free Arena: [T]he app economy is stealing consumers by the millions, eviscerating operating and profit margins, attracting the best and brightest employees, and setting the entire marketplace on its head. In my view, the only logical take-away from this information is to either support greater deregulation of Federal Communications Commission regulatees that must compete with these services or advocate for new Congressional powers to regulate these services, which would seem futile and unnecessary in a thriving market. 
2. Net Neutrality: [B]ecause the FCC order restored a light-touch approach through deregulation, any action by states to increase regulatory burdens on broadband providers would run directly counter to our efforts. State efforts to enact net neutrality rules are legally flawed and would impose substantial and unnecessary compliance burdens on providers. The rules and the costs they impose could chill innovation and curtail the broadband deployment we’ve all been working so hard to promote.
3. 9-1-1 Fee Diversion: With the responsibility for funding and operating 9-1-1 chiefly being a state-level responsibility, a concerted effort is going to be required against recalcitrant states and territories. For now, naming and shaming is one of my best tools against this practice but I could certainly use more voices in utilizing this to its fullest potential. 

Senator Ed Markey (D-MA) released the following statement after Facebook provided responses to questions posed by Sen Markey in the wake of the Facebook-Cambridge Analytica privacy breach. In his questions, Sen Markey asked Facebook to commit to not include advertising in children’s offerings and to commit to not share children’s information for targeted advertisements, once young users turn 13. “Our youngest and most vulnerable Americans should be able to navigate the digital world without being bombarded by advertisements at every turn,” said Sen Markey, House author of the Children’s Online Privacy Protection Act (COPPA). “I am disappointed that Facebook once again refuses to promise that it will never include advertising in Messenger Kids, an offering specifically targeted to children ages 12 and under. It is equally concerning that while Facebook has stated it will not ‘automatically’ share kids’ data with advertisers when users turn 13, the company stops short of declaring that it won’t share this data at all, automatically or otherwise. Companies like Facebook should not be able to cash in on children or teen’s personal information.”

Federal Communications Commission Chairman Ajit Pai sent letters to Rep. Bobby Rush (D-IL) and six other members of Congress and Rep. Anna Eshoo (D-CA) and 67 members of Congress on June 1, 2018, to respond to their letters regarding the Lifeline program. Chairman Pai said the 2017 Lifeline Order increased consumer choice by eliminating restrictions that barred Lifeline consumers from changing Lifeline providers for a year and protected consumers by barring low-quality services that offered mobile broadband in theory, but failed to do so in practice. Chairman Pai also answered specific questions on the Lifeline National Verifier.

Senators Brian Schatz (D-HI) and Ron Wyden (D-OR) called on the Federal Communications Commission to share more information about the reported distributed denial-of-service (DDoS) attack on the FCC’s website while it was open for comments on net neutrality in 2017. The letter comes over a year after reports of a DDoS attack on the FCC’s website, which prompted an initial letter from Sens Wyden and Schatz that questioned FCC’s ability to defend against such an attack and blunt any impact it could have on people’s participation in the debate around net neutrality. “Beyond your initial internal analyses that you reference in your June 15, 2017, response, have any subsequent FCC or third-party (e.g., vendor, contractor, or government agency) analyses or investigations verified that a cyberattack on ECFS occurred in 2017 and, if so, that the attack is best classified as a DDoS attack?” the Senators wrote. “If not, why was no investigation conducted?  Please provide any and all reports, findings, and other relevant details of any such investigations.”