Antitrust and Trade Regulation Commons^™

Paying The Price For Sports Tv: Preventing The Strategic Misuse Of The Fcc's Carriage Regulations, David Hutson

Federal Communications Law Journal

Cable companies and sports leagues have embarked upon parallel courses of vertical integration by creating and acquiring interests in cable sports networks. Cable companies carry regional sports networks (RSNs) on basic cable tiers. Some league-owned networks have sought high prices for carriage on basic tiers, causing some cable companies to balk because of the price increase they would have to pass on to consumers. The 1992 Cable Act prohibits cable companies from discriminating in carriage terms between affiliated and nonaffiliated networks. Cable companies that own RSNs are, therefore, left vulnerable to discrimination complaints by league-owned networks. This Note argues that …

Business Solutions To The Alien Ownership Restriction, Greg Snodgrass

Federal Communications Law Journal

The alien ownership restriction on broadcast licenses has had a profound effect on the entertainment industry over the past few decades. While the origins of the restriction were based on national security fears that no longer apply, the restriction is unlikely to be repealed without significant lobbying. Given the unlikelihood of repeal, this Note concludes that entertainment conglomerates should apply a two-pronged approach to overcome the barrier imposed by the ownership restriction. First, conglomerates should build powerful nonbroadcast superstations. Second, conglomerates should push the FCC to gradually loosen its application of the restriction. While this is not a perfect solution, …

The Enduring Lessons Of The Breakup Of At&T: A Twenty-Five Year Retrospective, Christopher S. Yoo

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

The Decline And Fall Of At&T: A Personal Recollection, Richard A. Posner

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

In his luncheon talk at the conference, presented here in slightly revised form, Judge Posner discusses his personal involvement with the events that led up the Justice Department's major antitrust suit against AT&T that culminated in the breakup of the telephone monopoly. The stages of his involvement included participation in the work of President Johnson's Task Force on Communications Policy, consulting for AT&T in the lawsuit itself, and his negative advice to the chairman of …

An Oligopoly Analysis Of At&T'S Performance In The Wireline Long- Distance Markets After Divestiture, Paul W. Macavoy

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

The antitrust law books promise competition from breaking up the monopoly firm in a Sherman Act case remedy. Not in this case; the question is what "kind" of oligopoly.

Will Access Regulation Work?, Gerald R. Faulhaber

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

The FCC is transitioning from a rate regulation regime to an access regime. A rate regulation regime gives all customers full access to network facilities (common carrier) at regulated rates-generally, rate base rate of return regulation. An access regime is one in which all competitors are given full access to incumbents' networks, with little or no retail rate regulation, thereby allowing competition (over incumbents' networks) to discipline the market. Is this a good idea? Is …

Did At&T Die In Vain? An Empirical Comparison Of At&T And Bell Canada, Eli M. Noam

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

Did the Divestiture of AT&T achieve its purpose? It is helpful to turn to Canada, whose telecommunications industry and regulation were similar but which did not experience a divestiture. Since AT&T was split up in 1982-4, national telecom market concentration in the U.S. has bounced back to a national duopoly structure, with an HHI concentration index of 2,986, higher than for Canada's similar national duopoly with an HHI of 2,463. Local telecom wireline competition is …

Essential Facilities And Trinko: Should Antitrust And Regulation Be Combined?, Timothy J. Brennan

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

The Supreme Court's 2004 decision in Trinko represented a radical change from prior doctrine ensuring that antitrust laws applied in regulated industries. The change resulted from a failure to appreciate that regulation and antitrust can be complements. Regulation can boost the value of antitrust by creating incentives to refuse to deal in order to reap monopoly profit otherwise proscribed by regulation. Ironically, the essential facilities doctrine rejected by the Trinko court and the Trinko decision …

The Bell System Divestiture: Background, Implementation, And Outcome, Joseph H. Weber

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

By 1982, the Bell System had operated an integrated telecommunications network connecting almost everyone in the United States for almost 100 years. That system had been designed and operated as a monopoly, but by the 1960s, new technologies were being developed which led to pressure to allow competitive entry. After many incremental changes, the Bell System divestiture--complete separation of long-distance service and manufacturing fiom local service provision-was finally adopted as a way of implementing this …

Toward A Unified Theory Of Access To Local Telephone Networks, Daniel F. Spulber, Christopher S. Yoo

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

Over the past several decades, regulatory authorities have imposed an increasingly broad array of access requirements on local telephone providers. In so doing, policymakers typically applied previous approaches to access regulation without fully considering whether the regulatory justifications used in favor of those previous access requirements remained valid. They also allowed each access regime to be governed by a different pricing methodology and set access prices in a way that treated each network component as …

The At&T Consent Decree: In Praise Of Interconnection Only, Richard A. Epstein

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

This article examines the consequences of the Bell consent decree of 1982. In the short run, the decree sought to end the AT&T's Corporate domination of the telecommunications network. But it did so in an overambitious way that chose to break up the basic system into constituent parts even though the preferred remedy was a more modest initiative that would have opened the network up to interconnection by rival carriers. In charting the wrong path, …

Are Regulators Forward-Looking? The Market Price Of Copper Versus The Regulated Price Of Mandatory Access To Unbundled Local Loops In Telecommunications Networks, Jerry A. Hausman, J. Gregory Sidak, Timothy J. Tardiff

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

Around the world, since 1996, regulators have mandated that incumbent local exchange carriers (ILECs) offer competitors access to their network at regulated prices that reflect forward-looking cost. Regulated prices for unbundled network elements are based on total element long-run incremental cost (TELRIC), which in turn is calculated using engineering models that estimate the costs of a hypothetical carrier employing the most efficient telecommunications technology currently available and the lowest cost network configuration, given the existing …

Reexamining The Legacy Of Dual Regulation: Reforming Dual Merger Review By The Doj And The Fcc, Philip J. Weiser

Federal Communications Law Journal

"The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective."' Conference held at the University of Pennsylvania Law School on April 18-19, 2008.

A central challenge for competition policy merger review is to structure the analysis of merger remedies so that the antitrust agencies play an effective and central role, with regulatory agencies complementing-as opposed to overlapping or contradicting--their judgments. At present, the U.S. system sometimes veers towards a worst-case scenario where federal antitrust authorities-the FTC and DOJ-impose regulatory remedies that overlap with regulatory policy and regulatory agencies perform duplicative merger reviews and impose remedies unrelated to the …

The Politics Of Competition: Review Of Clifford Winston's Government Failure Versus Market Failure: Microeconomics Policy Research And Government Performance And Mark K. Landy, Martin A. Levin & Martin Shapiro, Eds., Creating Competitive Markets: The Politics Of Regulatory Reform, Russell P. Hanser

Federal Communications Law Journal

Two recent books focus attention on the role of regulation in the modem economy and the reasons why efforts at deregulation succeed or fail. Clifford Winston's Government Failure Versus Market Failure: Microeconomics Policy Research and Government Performance reviews empirical studies of regulation and its alternatives, arguing that economic regulation has quite often done more harm than good. In Creating Competitive Markets: The Politics of Regulatory Reform, editors Mark K. Landy, Martin A. Levin and Martin Shapiro collect essays addressing the political dangers faced by those pursuing market liberalization, both before and (especially) after reform is enacted. Read together, these books …

Antitrust Language Barriers: First Amendment Constraints On Defining An Antitrust Market By A Broadcast's Language, And Its Implications For Audiences, Competition, And Democracy, Catherine J.K. Sandoval

Federal Communications Law Journal

This Article explores whether the language of a broadcaster's program appropriately defines an antitrust market, consistent with First Amendment and antitrust principles. In its evaluation of the 2008 private equity buyout of Clear Channel Communications, the Department of Justice ("DOJ") defined the antitrust market by the language of the broadcast, as it had done for the 2003 merger of Univision and Hispanic Broadcasting Corporation. This Article uses social science research on Spanish and English-language radio and television to evaluate that decision. It argues that the distinct content and messages that characterize Spanish and English-language programming show that market definition is …

Forward, John S. Applegate, Robert L. Fischman

Indiana Law Journal

Scientific information has become a centralr ationalef or environmental regulation, and scientific uncertainty is viewed as a major obstacle in developing, justifying, and enforcing environmental laws and policies. In the context of environmental regulation, scientific information may be analyzed as subject to both supply and demand. A regulatory system that supplies more scientific information than it demands can operate effectively to impose protective regulation. By contrast, a system that demands more information than it supplies will face a "data gap "and will fail to accomplish its protective goals. The data gap can be addressed by applying regulatory techniques that increase …

Carl Ramey's Mass Media Unleashed, Henry Geller

Federal Communications Law Journal

Book Review: Carl R. Ramey, Mass Media Unleashed: How Washington Policy Makers Shortchanged the American Public (2007).

This superb book treats an important issue: the proper regulatory policy for broadcasting in the twenty-first century. In it, Carl Ramey critiques the Federal Communications Commission's public trustee and deregulatory market policies and suggests that to meet the dynamic market and technological changes of this new century we should, among other things, free commercial broadcasters completely from public trustee requirements and eliminate FCC enforcement of its ownership and related rules. Based on the long experience of a communications lawyer who knows so well …

Skating Toward Deregulation: Canadian Developments, Timothy J. Brennan

Federal Communications Law Journal

Canada had recently undertaken significant steps to forbear from regulating the last regulated offering in the telecommunications sector, local exchange service. Tests that Canada's telecommunications regulatory agency had imposed were overturned by order from the Canadian Cabinet Ministers. Notably, competitors to the incumbent local exchange carriers ("ILECs"), primary cable systems offering voice over Internet protocol ("VoW"') service, argued for the retention of regulation to prevent the ILECs from cutting price to customers who had switched to cable VoIP or were most likely to do so. We review here both the institutional developments leading to the forbearance decision and a number …

Space, The Final Frontier-Expanding Fcc Regulation Of Indecent Content Onto Direct Broadcast Satellite, John C. Quale, Malcolm J. Tuesley

Federal Communications Law Journal

The vast majority of viewers today receive video programming from multichannel video programming providers-mostly cable television or direct broadcast satellite ("DBS")-rather than directly over-the-air from broadcast stations. While the FCC has not hesitated to sanction broadcasters for what it deems to be indecent content, it consistently has found that it lacks the authority to regulate indecency on subscription services like cable television. Citizens groups and some in Congress now seek to extend indecency restrictions to DBS services under existing law or through the enactment of new legislation. It is true that DBS, because of its use of radio spectrum to …

Summing Up The Public Interest: A Review Of "Media Diversity And Localism: Meaning And Metrics," Edited By Philip M. Napoli, Victoria F. Phillips

Federal Communications Law Journal

Philip Napoli's Media Diversity and Localism: Meaning and Metrics, is a thoughtful and first of its kind compilation of some of the ongoing research and scholarship examining the concepts of diversity and localism underlying the Federal Communications Commission's public interest standard in broadcasting. The collection of essays addresses these fundamental goals from a variety of disciplines beyond the law, including political science, communications policy, sociology, and economics. The essays explore the values associated with these two goals, apply performance metrics to assess existing regulatory policies intended to preserve and promote these goals, and reflect on their meaning in the new …

Deal Or No Deal: Reinterpreting The Fcc's Foreign Ownership Rules For A Fair Game, Cindy J. Cho

Federal Communications Law Journal

With the changing racial and linguistic composition of the American market and the emerging strength of the Mexican market, American broadcast companies are facing a new competitive playing field.. Section 310 of the Communications Act of 1934 ("Act") establishes the guidelines for when a foreign national is eligible to apply for a broadcast license from the FCC. The FCC currently interprets these limits on foreign ownership very leniently, favoring a policy of deregulation in an attempt to further open up the United States market. This Note argues that once foreign nationals have cleared the hurdle of § 310's foreign ownership …

The Telecommunications Economy And Regulation As Coevolving Complex Adaptive Systems: Implications For Federalism, Barbara A. Cherry

Federal Communications Law Journal

Satisfying the constraints for sustainable regulatory telecommunications policies is more challenging for regulatory regimes based on competition than monopoly. In an earlier paper, Johannes Bauer and I used complexity theory to improve our understanding of the requirements for sustainable telecommunications policies, showing that regulation has a diminishing capacity to achieve specifically desired outcomes and greater attention must be paid to the adaptability of policies and policymaking processes themselves. The present Article examines the implications of the complexity theory perspective for federalism. Federalism is a distinctive (patching) algorithm that confers system advantages for adaptability through diversity and coupling of policymaking jurisdictions-mechanisms …

Competition After Unbundling: Entry, Industry Structure, And Convergence, George S. Ford, Thomas M. Koutsky, Lawrence J. Spiwak

Federal Communications Law Journal

In the last few years, U.S. telecoms policy has shifted from encouraging the sharing of existing networks to facilitating the deployment of advanced communications networks. Given the large capital expenditures required for these networks, there can be only a few of such networks. In light of the natural forces that limit the number of facilities-based suppliers, it is vital for policymakers to investigate and implement rules that make markets more conducive to facilities-based entry and eliminate any existing rules that discourage deployment. The purpose of this Article is to provide a simple conceptual framework to evaluate the effect of particular …

Does Video Delivered Over A Telephone Network Require A Cable Franchise?, Robert W. Crandall, J. Gregory Sidak, Hal J. Singer

Federal Communications Law Journal

This Article examines whether, on legal or policy grounds, video services provided over a telephone network should be regulated as a traditional cable service or whether a different approach is warranted. The Authors find that municipal franchise requirements for video services provided over telephone networks would reduce consumer welfare. The Authors estimate that, even without considering any welfare gains owing to higher quality, the consumer welfare gains from entry exceed the potential loss in franchise fee revenue to municipalities by a factor of nearly three to one.

You Said What? The Perils Of Content-Based Regulation Of Public Broadcast Underwriting Acknowledgments, Andrew D. Cotlar

Federal Communications Law Journal

Public broadcast stations in the United States are forbidden to air promotional announcements in exchange for payment from commercial entities. However, these stations must acknowledge any financial contribution from donors that support particular programs without promoting the goods and services offered by those donors. While the FCC has attempted to maintain the conceptual distinction between promotional and nonpromotional information, it has struggled to apply this distinction within the context of an evolution in advertising practice.

As a result, many noncommercial educational licensees find it difficult to apply the FCC's rules. A careful analysis of how the FCC underwriting determinations yields …

Municipal Broadband: Challenges And Perspectives, Craig Dingwall

Federal Communications Law Journal

This Article reviews the status and challenges of municipal broadband and provides recommendations for responsible municipal broadband deployment. The Author reviews broadband demand; possible justifications for and the status of municipal broadband deployment; speed, feature, and price considerations; regulatory and technical issues; and relevant laws and legislation. The Author offers specific national policy recommendations and concludes that government/industry partnerships offer perhaps the best solution for municipal broadband deployment where broadband needs aren't met.

Analyzing The World Bank's Blueprint For Promoting "Information And Communications", Sherille Ismail

Federal Communications Law Journal

Book Review: Information and Communications for Development 2006: Global Trends and Policies, issued by the World Bank.

This Review provides a summary and brief analysis of foreign private investment, the book's blueprint for reform, and how investments have fared in promoting economic growth and reducing poverty. The book is a valuable asset for governments, scholars, investors, and the international community seeking to serve end users in developing countries.

Broadcast Technology As Diversity Opportunity: Exchanging Market Power For Multiplexed Signal Set- Asides, Michael M. Epstein

Federal Communications Law Journal

This Article proposes an access system based on a theory of quid pro quo: a bargained.for-exchange in which broadcasters would trade media access for market power. Under this quid pro quo approach, the FCC would administer a scaled metric whereby the greater a media company's audience reach, the more access that company must provide to citizens with diverse and local content. Since digital technology permits broadcasters to "multiplex" their television signal bandwidth into multiple signal programming streams, an opportunity exists for the government to require public access to one or more of these programming streams in return for relaxing caps …

The Legal Status Of Spyware, Daniel B. Garrie, Alan F. Blakley, Mathew J. Armstrong

Federal Communications Law Journal

This Article examines the legal status of Spyware under federal and common law in the United States of America. The Authors begin with a technical overview of Spyware technology, which covers Spyware's functionality, methods of dispersion, and classification. The Authors then analyze the treatment of Spyware under the Computer Fraud and Abuse Act, the Stored Communications Act, the Wiretap Act, and under general tort claims of trespass to chattels, invasion of privacy, and intrusion upon seclusion. The Authors conclude that none of the aformentioned causes of action provide an adequate remedy at law for Spyware victims. Moreover, the Authors note …

Opening Bottlenecks: On Behalf Of Mandated Network Neutrality, Bill D. Herman

Federal Communications Law Journal

This Article calls for mandated "network neutrality," which would require broadband service providers to treat all nondestructive data equitably. The Author argues that neutral networks are preferable because they better foster online innovation and provide a more equitable distribution of the power to communicate. Without mandated network neutrality, providers in highly concentrated regional broadband markets will likely begin charging content providers for the right to send data to end users at the fastest speeds available. The Author demonstrates that regional broadband competition and forthcoming transmission technologies are unlikely to prevent broadband discrimination, ad hoc regulation under current statutory authority is …