« Paul Krugman: Republicans Are Coming for Your Benefits | Main | Links for 12-08-17 »

Wednesday, December 06, 2017

Net Neutrality Likely to Accelerate the Trend in Media Consolidation

The conclusion of a post by Harold Feld at ProMarket:

Will Repeal of Net Neutrality Accelerate the Trend in Media Consolidation? The History of Cable Suggests “Yes,” by Harold Feld, ProMarket: ...Based on the history of both the cable industry and the broadband industry (which is, after all, almost entirely derived from the cable industry), we should expect repeal of the net neutrality to rules to accelerate the trend toward vertical and horizontal consolidation. This is particularly true in light of the public statements of chairman Pai and other Republican commissioners indicating they believe that consolidation can offer benefits to consumers and that the dangers of anticompetitive behavior are exaggerated. This is not only true about net neutrality, but generally. Although chairman for less than a year, Pai has already announced that the FCC will simply defer to the Department of Justice on antitrust and to the Federal Trade Commission on consumer protection, and has either repealed or begun the process of repealing the FCC’s longstanding limits on vertical and horizontal media ownership.
Additionally, although Pai and the other Republican commissioners repeatedly refer to state consumer protection laws as providing an additional layer of protection, the draft order repealing net neutrality also contains sweeping language preempting the states from any laws “inconsistent” with the “deregulatory policy” the FCC will adopt on December 14. Charter Communication (which now owns Time Warner Cable) has already rushed to use this language to file a motion to dismiss a lawsuit by the New York state attorney general relating to Time Warner Cable’s 2014 conduct denying New York subscribers access to Netflix. Whether or not this particular motion to dismiss succeeds, we can expect broadband provider to use the broad preemption language in the net neutrality repeal order to block precisely the kind of state consumer protection statutes chairman Pai claims will make FCC oversight unnecessary.
In short, the net neutrality repeal order does for broadband exactly what the 1984 Cable Act did for cable—create an environment with virtually no effective restraint on the ability of providers to favor their own content and discriminate against rivals. We should therefore expect the same result: rapid horizontal and vertical consolidation. While chairman Pai and other supporters of the repeal order dismiss these concerns, they offer no plausible explanation for why this round of deregulation should produce different results beyond an airy wave that all that consolidation is ancient history and how could that possibly happen again?
As we all know, those who refuse to learn from history are doomed to repeat it.

    Posted by on Wednesday, December 6, 2017 at 10:57 AM in Economics, Market Failure, Regulation | Permalink  Comments (53)


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.