Jonathan Sallet

Between Sept 2018 and June 2019, the Federal Trade Commission conducted a series of public hearings to study the landscape of competition and consumer protection. The next step—and the crucial one—is for the FTC to integrate the lessons learned from those proceedings into its day-to-day work.

Benton Foundation Senior Fellow Jonathan Sallet's remarks at the Federal Trade Commission's hearing on Consumer Protection Issues in US Broadband Markets:

As the Federal Trade Commission considers the actions it can take to further broadband competition, I believe that it should consider three important points:

The connective tissue that unites Louis Brandeis’s view of legislative action, the creation and enforcement of antitrust law, and the use of sectoral regulation is the willingness to experiment. We are well-acquainted with Brandeis’s invocation of the “laboratories of the states” but his reliance on experimentation, what we might today call innovation, runs much deeper than that well-known aphorism.

In the world of competition law, Louis Brandeis applauded “the introduction of two governmental devices designed to protect the rights and opportunities of the individual.” One was, of course, antitrust. The second was the creation of “[c]ommissions to regulate public utilities.” Brandeis always preferred competition to regulated monopoly, but he recognized that there were times when sectoral regulation was needed, as, for example with local gas, water, and telephone monopolies. He viewed such instances as “exceptional” but obviously important.

For Louis Brandeis, antitrust would serve both social and economic goals. He saw complete harmony in critiquing the economic justification for corporate power, on terms familiar to modern antitrust analysis, while pressing the larger case for democracy and industrial liberty. Legislatures can, and should, take an expansive view. As a starting point, Brandeis believed that values other than economics would be served by the protection of competition through antitrust, chief among them the preservation of democracy and individual initiative. This was not a subtle view.

The Federal Trade Commission is tackling a central question of competition: Are the goals of antitrust enforcement in the United States best pursued by applying what’s known as the consumer welfare standard? But what does it mean just to safeguard “consumer” welfare?

American democracy, like any democracy, requires the freedom to speak. But American democracy has always recognized the corollary: the strength of speech rests on access to communications networks. From the Post Office, to the telegraph, the telephone, and broadband, governmental action of various stripes has helped connect Americans to each other. The Benton Foundation serves that mission. Our goal: To bring open, affordable, high-capacity broadband to all people in the U.S.

In the wake of the government’s setback in the AT&T/Time Warner case, it’s natural enough to ask: what will be that case’s impact on the government’s ability to challenge vertical mergers in the future? I think the answer is “very little if anything.” The government could take steps to build an even stronger foundation for the review of vertical mergers in the future. Here are some suggestions. First, the current 1984 guidelines on the treatment of vertical (technically, non-horizontal) transactions should be withdrawn. Second, new vertical guidelines should be created.

Let’s remember that the core notion of democracy underlying antitrust is the value of individual opportunity, free from the workings of political or economic power. Individual choice in democratic elections and individual choice in competitive markets share an intellectual legacy. These democratic roots of antitrust are best served by upholding the ability of antitrust enforcement to carry out its duties free from the jousting and scuffling of day-to-day politics.

[Commentary] A few years ago, Yale Law School Professor Jack Balkin explained that “a system of free speech depends not only on the mere absence of state censorship, but also on an infrastructure of free expression.”  He wisely observed that policies that facilitate open innovation “better serve the interests of speech in the long run.” To innovate, to speak, to learn, to trust – these are outcomes squarely within the power of the Federal Communications Commission to advance.