Disclosing interconnection agreements creates anticompetitive risks

[Commentary] The Federal Communications Commission announced that it had begun reviewing the recent interconnection agreements that Netflix signed with Internet service providers Comcast and Verizon.

The Commission’s growing interest in the heretofore unregulated interconnection market has prompted some commentators to renew their calls for all interconnection agreements to be filed with the Commission and made publicly available. Greater transparency, they argue, would provide consumers a better understanding of the economics of the Internet ecosystem beyond last-mile broadband networks, and would help the public police potential anticompetitive risks.

While transparency is often a laudatory goal, a mandatory public disclosure requirement in this case may ultimately harm the very competition that proponents seek to protect. Even absent any actual anticompetitive effects, the increased antitrust scrutiny invited by price transparency will impose additional costs on the industry, which will ultimately be passed along to consumers in the form of higher prices.

[Lyons is an associate professor at Boston College Law School]