Thursday, September 16, 2021
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FCC is not ruling out steps to expand broadband access
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Federal Trade Commission Withdraws Vertical Merger Guidelines
FTC Releases Report on Unreported Acquisitions by Major US Tech Companies
Congressmembers Introduce Legislation to Establish a Voucher Program & Close the Digital Divide
News From the FTC Meeting
Digital Inclusion
Health
Education
Devices
More on Antitrust/Competition
Privacy
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Life as we Know it Now
Stories From Abroad
News From the FTC Meeting
The Federal Trade Commission voted to withdraw its approval of the Vertical Merger Guidelines, issued jointly with the Department of Justice (DOJ), and the FTC’s Vertical Merger Commentary. The guidance documents, which were published in 2020, include unsound economic theories that are unsupported by the law or market realities. The FTC is withdrawing its approval in order to prevent industry or judicial reliance on a flawed approach. In voting to withdraw, the FTC reaffirmed its commitment to working closely with the DOJ to review and update the agencies’ merger guidance. The withdrawn Vertical Merger Guidelines set out analytical techniques and enforcement policies for non-horizontal mergers, while the associated commentary had summarized a selection of prior investigations that largely utilized that framework. The guidelines noted several ways vertical mergers can harm competition, which the statement by the FTC majority recognizes provided valuable analysis. The statement by the FTC majority, however, notes that the 2020 Vertical Merger Guidelines had improperly contravened the Clayton Act’s language with its approach to efficiencies, which are not recognized by the statute as a defense to an unlawful merger. The majority statement explains that the guidelines adopted a particularly flawed economic theory regarding purported pro-competitive benefits of mergers, despite having no basis of support in the law or market reality. The majority noted that because the Vertical Merger Guidelines were adopted in 2020, they had yet to have a significant impact and that acting swiftly was paramount to preventing judicial reliance on this flawed discussion.
Going forward, the FTC will work with the DOJ to update merger guidance to better-reflect market realities. The FTC majority statement lays out several areas for consideration in that review. First, the FTC intends to explore ways to provide clear guidance on the characteristics of transactions that are likely unlawful. Second, the FTC will look at ways to provide guidance on ineffective remedies, based on an evaluation of past remedy practices and any evidence that past remedies may not have fully restored competition. Finally, the agency will look to expand on the harms identified in the 2020 Vertical Merger Guidelines to consider various features of modern firms, including in digital markets, and impacts of mergers on labor markets.
The Federal Trade Commission made public the findings from its inquiry into past acquisitions by the largest technology platforms’ that did not require reporting to antitrust authorities at the FTC and the Department of Justice. The inquiry analyzed the terms, scope, structure, and purpose of these exempted transactions under the Hart-Scott-Rodino (HSR) Act and the FTC's reporting requirements by Alphabet, Amazon, Apple, Facebook, and Microsoft between January 1, 2010 and December 31, 2019. These companies comprise the top five US companies by market capitalization. “While the Commission’s enforcement actions have already focused on how digital platforms can buy their way out of competing, this study highlights the systemic nature of their acquisition strategies,” said FTC Chair Lina Khan. “It captures the extent to which these firms have devoted tremendous resources to acquiring start-ups, patent portfolios, and entire teams of technologists—and how they were able to do so largely outside of our purview.” The technology platform inquiry focused on 616 transactions valued at or above $1 million.
The head of the Federal Communications Commission left the door open to taking further actions to ensure everyone has broadband access — including price regulation and combating digital redlining. Acting Chairwoman Jessica Rosenworcel said at Politico's Tech Summit that the FCC is “laser-like focused on getting this service to everyone, everywhere,” and that it is trying to take a broader approach to the issue than the agency had in the past. Lawmakers of both parties have lamented the dearth of fast internet service in much of the country. The pandemic laid bare just how poor — or nonexistent — adequate broadband service is in much of the country, across both rural and urban areas and places that fall in between. For others, the problem is having access to broadband that they can afford, something the FCC has been trying to address with the $3.2 billion Emergency Broadband Benefit program Congress authorized in 2020 that offers up to $50 per month to help eligible households buy broadband service. The FCC estimates approximately 5.5 million households are now benefiting from the temporary program. Rosenworcel said that there's also the need to combat "digital redlining," or the practice whereby internet providers invest more money in wealthier consumers or more profitable markets while offering lesser service to low-income consumers.
Health
Patients and doctors who embraced telehealth during the pandemic fear it will become harder to access
Across the country during the pandemic, the same pattern played out as federal and state regulators issued scores of waivers to telehealth access and coverage rules, making it easier for hospitals, health centers and clinics to offer a wider range of remote services and be reimbursed for delivering them. Yet a question that remains to be answered is how many rules will tighten once the public health emergency is over. There are signs of support for telehealth; Congress is considering legislation that would make some changes permanent. The bipartisan infrastructure bill includes $65 billion for broadband, which should give patients in rural areas access to Internet connections fast enough for video visits as well as uploading data from wearable medical devices. And in August 2021, the Biden administration announced a $19 million investment in telehealth in the form of awards aimed at stimulating innovation and expanding access to services in underserved areas. Physicians' experiences with everything from unreliable Internet access to state-based licensing arrangements are central to today’s telehealth debates in Washington. But day-to-day, the focus is less on policy than on integrating the tools of technology with the traditions of good care — a challenge that all practitioners face as they adapt to telehealth.
Broadband access is a critical component of high-quality education. Connecting “last-mile” rural communities will require smart policies to make certain investments in broadband infrastructure are maximized for actual and timely deployment so that our truly unserved students and communities receive broadband access without delay. This includes pole access reform; the complex and costly process for broadband providers to attach to utility poles is one of the single greatest barriers to rural broadband deployment. Pole owners – such as utility companies, cooperatives and municipalities – often impose unnecessarily complex requirements and potentially unfair fees for broadband providers to attach cables to these poles that allow for connectivity. However, the Progressive Policy Institute recently found that the cost of managing pole attachment regulations and fees cuts overall broadband deployment by up to 55 percent. Sens Richard Blumenthal (D-CT) and Roger Wicker (R-MS) have recognized the critical need for pole access reform to ensure that broadband funds are used most efficiently and effectively, but we need more members of Congress to join them to help eliminate this significant barrier to deploying broadband to all our nation’s rural students. We must close this homework gap for our rural students and pole access reform must be part of any solution to ensure these students have reliable access to broadband – and all the opportunities that it provides.
[Dr. Allen Pratt, Ed.D, is the executive director of the National Rural Education Association.]
Devices
Congressmembers Introduce Legislation to Establish a Voucher Program & Close the Digital Divide
Rep A Donald McEachin (D-VA) and Sen Reverend Raphael Warnock (D-GA) introduced the Device Access for Every American Act to ensure more Americans can afford connected devices (S.2729) (H.R.5257). While computer access is nearly ubiquitous amongst high-income households, 40 percent of low-income adults lack a desktop or laptop computer. Additionally, 4.4 million households with students lack consistent access to a computer. The Device Access for Every American Act would:
- Allocates $5 billion in federal funding for establishment and implementation of the voucher program
- Authorize the FCC to administer up to $400 vouchers for eligible individuals and families to purchase a connected device
- Permit up to two low-income individuals per household to receive a voucher, so families can receive multiple devices
- Direct the FCC to collaborate with connected device retailers, promote the program to eligible Americans, and provide individualized technical assistance to assist in enrollment
Antitrust/Competition
Former US national security officials claim antitrust could hurt US in China tech race
Twelve former top US national security officials are urging Congress to hit pause on a package of antitrust bills in order to consider how breaking up tech companies could harm the US in its competition with China. In its quest to "undermine US influence" and become "the world's leading innovator," the Chinese government employs policies designed to "create and support 'national champion' technology companies," the former officials wrote in a letter to House Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA). Antitrust legislation to break up US tech giants — without targeting Chinese companies like Huawei, Tencent, Baidu and Alibaba — could impede innovation that is "critical to maintaining America’s technological edge," they argue. The former officials praise the US Innovation and Competition Act — a sweeping, $200 billion China-focused package overwhelmingly passed by the Senate in June — but call on Congress to study the national security implications of the House antitrust proposals before moving forward. Since leaving public service, several of the letter's signatories have joined the boards of organizations that receive funding or do work for tech firms like Google and Amazon. "These arguments are the same arguments that Facebook and Google have been making for a very long time in an effort to avoid regulation," said Rep David Cicilline (D-RI), the chair of House Judiciary's Antitrust Subcommittee, about the letter. "And I think actually that the evidence is just the opposite."
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Grace Tepper (grace AT benton DOT org) — we welcome your comments.
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