FTC on Net Neutrality: Proceed with Caution

The Federal Trade Commission’s staff report on Broadband Connectivity Competition Policy released today largely gets it right. The FTC staff acknowledged the high level of competition among broadband providers and correctly urged policy makers to go slow on regulating broadband business models, particularly network neutrality, which would prevent service providers from prioritizing Internet traffic or favoring some Web content and applications over others. FTC Chairwoman Deborah Platt Majoras punctuated the findings, stating that without evidence of “market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.” While the staff noted that an unfettered market for Web content management, applications prioritization and quality of service presents the potential for antitrust abuse, it also recognized that it has just as much potential to yield great benefits for consumers. Notable excerpts from the report’s executive summary:

“It is not possible to know in the abstract whether allowing content and applications providers to pay broadband providers for prioritized data transmission will be beneficial or harmful to consumers.” “In evaluating whether new proscriptions are necessary, we advise proceeding with caution before enacting broad, ex ante restrictions in an unsettled, dynamic environment.” “There is evidence that the broadband Internet access industry is moving in the direction of more, not less, competition, including fast growth, declining prices for higher-quality service… “…[W]e recommend that policy makers proceed with caution in evaluating proposals to enact regulation in the area of broadband Internet access.”