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Antitrust

Broadband Roundup: Texas Reaches T-Mobile Settlement, Closing the ‘Homework Gap,’ Broadcast Ownership

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Photo of Texas Attorney General Ken Paxton from via Attorney General's office

Texas Attorney General Ken Paxton announced Monday that his office reached a settlement with T-Mobile, resolving the state’s antitrust claims against the proposed merger of mobile wireless telecommunications service providers Sprint and T-Mobile.

The terms of the agreement commit the new T-Mobile to build out a 5G network throughout Texas during the next six years. The settlement is also designed to prevent T-Mobile from increasing prices for wireless services on Texans for five years after the merger is complete.

“Our objectives in joining the initial lawsuit were to protect Texans from unnecessary price hikes and to ensure that Texans living in both urban and rural areas will not get stuck with substandard service,” said Paxton.

“This settlement ensures that the New T-Mobile is not in a position to overcharge Texans for wireless service, and at the same time, obligates the New T-Mobile to invest in a high-quality 5G network that will serve the needs of Texas’ growing economy,” he said.

The agreement also outlines provisions to help Texans receive affordable wireless coverage. One of which includes giving customers access to T-Mobile limited data rate plans at a cost far below what is currently offered in the industry.

Rep. Grace Meng, D-N.Y., introduces measure to close the “homework gap” through mobile hotspots

Rep. Grace Meng, D-N.Y., introduced Monday the Closing the Homework Gap Through Mobile Hotspots Act. The bill would create a $100 million grant program for schools, libraries, U.S. territories, and federally recognized Indian Tribes to purchase mobile hotspots to help close the nation’s homework gap.

“We cannot allow this to go on. My bill is simple and does not require investing funds in developing new technologies to close the “homework gap;” instead, it builds on and expands existing infrastructures,” Meng said. “Mobile hotspot devices already exist, and with my bill, we can get them to more students who need them.”

Federal Communications Commission Commissioner Jessica Rosenworcel praised the legislation: “This Homework Gap is the cruelest part of our digital divide. The good news is that technology can help – wireless hotspots can help children get online, do research, learn new ideas, download assignments, and communicate with their teachers—in short, help them succeed.”

American Library Association President Wanda Brown emphasized that libraries are uniquely positioned to bridge the digital divide.

“The nation’s more than 120,000 libraries play a vital role in providing access to high-speed internet,” she said. “Many offer fee-free Wi-Fi 24/7 and parking for users after hours. Many also lend hotspots – but we can’t keep enough of them on our shelves to meet the demand in our communities. More hotspots in our nation’s libraries is the surest way to make progress in achieving digital equity across the country”

Long-contested efforts to ease broadband ownership rules likely headed to Supreme Court

The Federal Communications Commission and the National Association of Broadcasters may take broadcast ownership regulation to the Supreme Court, John Eggerton from Broadcasting & Cable reports. This issue stems from the 3rd U.S. Circuit Court of Appeals refusing to hear the FCC’s appeal of a lower court decision to throw out FCC Chairman Ajit Pai’s deregulation order.

“For more than 20 years, Congress has instructed the FCC to review its media ownership regulations and revise or repeal those rules that are no longer necessary,” said Pai in September when he signaled that the agency would challenge the 3rd Circuit’s decision.

“But for the last 15 years,” he continued, “a majority of the same 3rd Circuit panel has taken that authority for themselves, blocking any attempt to modernize these regulations to match the obvious realities of the modern media marketplace.”

Pai’s deregulation efforts aim to better match regulations to a video market increasingly populated by pay TV providers, including cable, satellite, telco and streaming companies.

NAB Executive Vice President of Communications Dennis Wharton would only say the trade group was disappointed with the court’s decision not to grant en banc review and that the association was “reviewing its options.”

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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Antitrust

Watchdogs Cannot Allow Another T-Mobile/Sprint Merger Under New Consolidation Guidelines, Event Hears

A Yale economics professor called on the FTC and DoJ to make it easier for them to pursue harmful mergers.

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Screenshot of Yale economics professor Fiona Scott Morton

WASHINGTON, May 10, 2022 – A professor of economics said at an Information Technology and Innovation Foundation event late last month that the Justice Department and the Federal Trade Commission, during its recently announced review of mergers, should ‘plug those holes’ that previously allowed T-Mobile to acquire Sprint.

“I would say that one thing that we have accumulated a great deal of evidence on is that we are missing problematic mergers – that we are not [stopping] mergers that turn out to be harmful,” said Fiona Scott Morton, the Theodore Nierenberg Professor of Economics at Yale University School of Management, at the April 28 event, referring to the FTC’s failure to stop the Sprint/T Mobile merger and accused it of not appropriately protecting consumers.

“We are under enforcing as a general matter and we should therefore use this review of the merger guidelines to plug those holes,” she said, adding, “Are we catching nascent competitors that are going to prove to be important competitors in the future? It turns out we are not doing that,” she said.

She also responded to critics asserting that the FTC simply needs more money to effectively enforce their guidelines.

“Here is where I am going to play fiscal conservative,” she said. “How about we change the rules to make it easier for the government to bring these cases and then we do not need to spend $2 billion more, we could spend half a billion dollars more because there would be a significant deterrent effect and the government would have less work to do.”

Merger guidelines will give industry more certainty

In January, the FTC under Chair Lina Khan and the Justice Department’s antitrust division launched a public inquiry into modernizing merger guidelines established under previous leadership, on which Khan said was an attempt to “accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals.” Public comments were due on April 21.

Howard Shelanski, a partner at law firm Davis Polk, said at the ITIF event that FTC guidelines serve several purposes.

“One thing is certainly, just to let parties considering mergers to have an idea of what kind of scrutiny they are in for at the agencies,” he said.

He explained that the guidelines serve to inform stakeholders at which levels of industry concentration presumptions of harm will be triggered and what theories of harm the FTC will pursue.

“I think [guidelines] also let parties know how agencies will consider different kinds of defenses that [will] likely be raised,” Shelanski added. “So, the guidelines certainly serve a public purpose, but they also signal to courts about what lies behind the [FTC’s] thinking when it chooses to investigate and ultimately challenge a merger.”

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