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Antitrust

T-Mobile/Sprint Merger Settlement Fiercely Criticized by Activists, and Dish Network’s Charlie Ergen is ‘Insulted’

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WASHINGTON, July 31, 2019 — The Justice Department’s recently announced settlement on the T-Mobile/Sprint merger has drawn widespread criticism, even though the agreement maintains four nationwide carriers by drawing Dish Network into the marketplace.

Dish has fiercely defended its ability to quickly emerge as a strong fourth competitor in the wireless market. The company plans to have a 5G broadband network reaching 70 percent of the country’s population by June 2023.

When the deal was first announced late last week, Dish Chairman Charlie Ergen pointed to the company’s past success in entering the pay-TV industry as a direct competitor to entrenched cable corporations.

“As we enter the wireless business, we will again serve customers by disrupting incumbents and their legacy networks, this time with the nation’s first standalone 5G broadband network,” Ergen said.

In a press call on Friday, representatives from several non-profit groups opposed to the merger urged state attorneys general to continue their suit against it in spite of the DOJ settlement and likely approval from the Federal Communications Commission.

“Rather than simply rejecting the deal, the Department of Justice has proposed a risky bet on creating a new facilities-based competitor,” said Philip Berenbroick, senior policy counsel for Public Knowledge. “This creates significant potential risk that consumers will be left with a substantially less competitive marketplace with higher prices, lower service quality, and less innovation.”

The behavioral conditions included in the settlement are at high risk of being ineffective, gamed, or unenforced, Berenbroick continued, adding that Sprint today is far stronger than any other fourth competitor in the foreseeable future.

“Based on what we know now, blocking the transaction remains the best way to preserve competition and prevent consumer harm,” concluded Berenbroick. “In the meantime, the FTC should put this new proposed transaction out for public scrutiny and comment.”

However, Dish Network challenged that assertion. In a second quarter earnings call on Monday night, Ergen said that he was insulted by people questioning the credibility of Dish as a competitor.

“This project is certainly challenging, but we have so much more infrastructure in place and we know what we’re up against,” he said. “It’s not our first rodeo and I think we will be a competitive threat in this business.”

Job loss fears, noncompliance history, and failures to meet buildout requirments

The merger is estimated to kill 30,000 jobs, according to Debbie Goldman, telecommunications policy director for the Communications Workers of America.

The divestiture of nine million prepaid customers does not replace the competitive loss of Sprint, which has 33 million postpaid subscribers and 12 million wholesale subscribers, said Goldman. Far from creating a new competitor, the deal gives T-Mobile its new biggest customer, since Dish will likely remain dependent on T-Mobile’s spectrum.

She said Dish has a long history of noncompliance with federal rules, including past failures to meet promised buildout requirements, and the company has never built or operated a wireless network.

“The DOJ has caved to political pressure and chosen to ignore the record evidence of the harm to consumers,” said Carri Bennet, general counsel to the Rural Wireless Association.

Calling the conditions “drastically insufficient” and the penalties “woefully inadequate,” Bennet warned that Dish would not be able to compete as a viable fourth nationwide network.

The proposed settlement will “degrade the choices available to consumers, degrade the options for network actions, and degrade the incentives to create better and more innovative service,” said George Slover, senior policy counsel for Consumer Reports.

Slover pointed out that the loss of Sprint means more than just the increased market concentration, since the network has historically made reaching rural areas and underserved communities a priority.

The Dish scheme is “needlessly convoluted” and “half-baked,” said Joshua Stager, senior counsel at New America’s Open Technology Institute, in a press release.

The remedy will require years of monitoring to ensure ongoing compliance, Stager continued, claiming that “no one who has followed merger enforcement over the past decade can seriously believe this will work.”

(Photo by Alonzo, used with permission.)

Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

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Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

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Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

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Antitrust

Critics and Supporters Trade Views on American Innovation and Choice Online Act

American Innovation and Choice Online Act is intended to protect fair competition among businesses, but panelists differed on its impact.

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Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

WASHINGTON, May 10, 2022 – Experts differed on the effect that antitrust legislation targeting big tech companies allegedly engaging in discriminatory behavior would have on small businesses.

Small businesses “want Congress not to do anything that will screw up or weaken the services that they rely on for their business,” said Michael Petricone, senior vice present of the Consumer Technology Association, at a Protocol Live event on Thursday.

Petricone said that antitrust bill would encourage tech companies to relocate to other countries, harming the American economy. He said small businesses would be affected the most.

Instead, Petricone called for  a “smarter immigration policy” to allow foreign innovators access to American tech market, as well as the defeat of the antitrust legislation.

But other said that small businesses suffer from predatory behavior by big tech companies. “Companies can’t get their foot in the door when there is already self-preferencing,” said Awesta Sarkash, representative for Small Business Majority, an advocacy organization, adding that 80% of small businesses say they want antitrust laws to protect them.

Self-preferencing on online platforms is detrimental to the success of small businesses who rely on social media advertising for business, she said. The new antitrust proposals would ensure an level playing field and promote fair competition, she said.

The American Innovation and Choice Online Act would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The bill sponsored by Sen. Amy Klobuchar, D-Minn, was introduced to the Senate on May 2 and is awaiting Senate floor consideration.

The debate follows concerns raised by both democrats and republicans about America’s global competitiveness as the bill would weaken major American companies.

If passed, the bill will follow the European Union’s Digital Services Act which similarly sets accountability standards for online platforms, preventing potentially harmful content and behavior.

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