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The Honourable Bob Goodlatte, Chairman of the House Judiciary Committee, has prefaced the Senate hearing on Net Neutrality by expressing his scepticism of claims that additional regulation in the Internet marketplace is needed to encourage competition and promote innovation, contending that the Internet has flourished precisely because it is a deregulated market.
“Regulation and antitrust law have long had an uneasy relationship,” told the hearing. “Antitrust law serves to protect a competitive process by prosecuting anticompetitive conduct if and when it occurs. Regulation typically dilutes or casts aside reliance on antitrust enforcement and attempts to constrain or direct market forces by imposing new rules of conduct. These approaches generally are at odds with each other and a natural tension has arisen between the two.”
Goodlatte said there were few more important issues that will impact the future of the Internet than the question of whether to apply antitrust law or regulation to protect the Internet from anticompetitive and discriminatory conduct. “Proponents of imposing additional regulation on the Internet marketplace argue that it is needed to encourage competition and promote innovation. I am deeply sceptical of these claims. In my experience, regulation generally stifles rather than facilitates competition and innovation. In fact, it is my belief that the Internet has flourished precisely because it is a deregulated market,” he declared.
“That is not to say that we should stand by and allow companies to engage in discriminatory or anticompetitive activities. I believe that vigorous application of the antitrust laws can prevent dominant Internet service providers from discriminating against competitors’ content or engaging in anticompetitive pricing practices. Furthermore, antitrust laws can be applied uniformly to all Internet market participants, not just to Internet service providers, to ensure that improper behaviour is prevented and prosecuted,” he suggested.
“In 2007, the Department of Justice expressed its preference for antitrust enforcement over regulation when it warned that [t]he FCC should be highly skeptical of calls to substitute special economic regulation of the Internet for free and open competition enforced by the antitrust laws.” DOJ further stated that regulation “could in fact prevent, rather than promote, optimal investment and innovation in the Internet, with significant negative effects for the economy and consumers.’” he advised.
“I understand that the nature of the Internet and the speed at which the market evolves could present challenges to enforcing the existing antitrust laws in the Internet context. We may need to consider amending the current antitrust laws to ensure that they can be applied promptly and effectively to protect the competitive nature of the Internet marketplace,” he admitted.
“The Judiciary Committee has long played a role in ensuring that antitrust laws are properly equipped and can be applied effectively in the telecommunications industry. This Committee will continue to play a strong role advocating for key antitrust enforcement and certainly will examine these issues closely to the extent telecommunications laws are rewritten over the coming years,” he confirmed.