Communications Law Commons^™

Market Power And Switching Costs: An Empirical Study Of Online Networking Market, Shin-Ru Cheng

University of Cincinnati Law Review

In recent years, states have launched several antitrust investigations targeting digital platforms. A major difficulty in these investigations is demonstrating the extent of a digital platform’s market power. Market power is defined as the control of the output or the price without the loss of business to competitors. As will be explored in this Article, market power is a critical component in an antitrust analysis. On several occasions, courts have adopted the switching costs approach in their analysis of market power. According to this approach, market power may be inferred when the costs of switching from one supplier to another …

House Judiciary Inquiry Into Competition In Digital Markets: Statement, Herbert J. Hovenkamp

All Faculty Scholarship

This is a response to a query from the Judiciary Committee of the U.S. House of Representatives, requesting my views about the adequacy of existing antitrust policy in digital markets.

The statutory text of the United States antitrust laws is very broad, condemning all anticompetitive restraints on trade, monopolization, and mergers and interbrand contractual exclusion whose effect “may be substantially to lessen competition or tend to create a monopoly.” Federal judicial interpretation is much narrower, however, for several reasons. One is the residue of a reaction against excessive antitrust enforcement in the 1970s and earlier. However, since that time antitrust …

The Separation Of Platforms And Commerce, Lina M. Khan

Faculty Scholarship

A handful of digital platforms mediate a growing share of online commerce and communications. By structuring access to markets, these firms function as gatekeepers for billions of dollars in economic activity. One feature dominant digital platforms share is that they have inte­grated across business lines such that they both operate a platform and market their own goods and services on it. This structure places domi­nant platforms in direct competition with some of the businesses that de­pend on them, creating a conflict of interest that platforms can exploit to further entrench their dominance, thwart competition, and stifle innovation.

This Article argues …

Law School News: 'Marketplace Of Ideas' Imperiled (04-05-2018), David A. Logan

Life of the Law School (1993- )

No abstract provided.

Telecommunications: Competition Policy In The Telecommunications Space, Gene Kimmelman, Maureen K. Ohlhausen, Michael O’Rielly, Christopher S. Yoo, Stephen F. Williams

All Faculty Scholarship

In today’s rapidly evolving telecommunications landscape, the development of new technologies and distribution platforms are driving innovation and growth at a breakneck speed across the Internet ecosystem. Broadband connectivity is increasingly important to our civil discourse, our economy, and our future. What is the proper role of government in facilitating robust investment and competition in this critical sector? When technology companies constantly have to reinvent themselves and adapt to survive – what role should government play? This panel of experts at the Federalist Society’s 2014 National Lawyers Convention discussed the current regulatory environment and how government policies – particularly regarding …

Closing Fireside Chat With The Assistant Attorney General For The U.S. Department Of Justice Antitrust Division, William Baer, Philip J. Weiser

Publications

This Closing Fireside Chat was the final session of the 16th annual Silicon Flatirons Center conference, The Digital Broadband Migration: The Evolving Industry Structure of the Digital Broadband Landscape, held on Feb. 1, 2016 in the Wittemyer Courtroom of the University of Colorado Law School.

"At the time this conference was held, William J. Baer was Assistant Attorney General for Antitrust in the United States Department of Justice. On April 17, 2016, President Obama asked Mr. Baer to become Acting Associate Attorney General of the United States. Video of this interview with Assistant Attorney General Baer is available at https://www.youtube.com/watch?v=C351xEX0h4g …

An Approach To The Regulation Of Spanish Banking Foundations, Miguel Martínez

Miguel Martínez

The purpose of this paper is to analyze the legal framework governing banking foundations as they have been regulated by Spanish Act 26/2013, of December 27th, on savings banks and banking foundations. Title 2 of this regulation addresses a construct that is groundbreaking for the Spanish legal system, still of paramount importance for the entire financial system insofar as these foundations become the leading players behind certain banking institutions given the high interest that foundations hold in the share capital of such institutions.

Agency Boundaries And Network Neutrality, Tejas N. Narechania

Tejas N. Narechania

Teece's Competing Through Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

This essay reviews David J. Teece's book, Competing Through Innovation: Technological Strategies and Antitrust Policies (2013).

Apple And Amazon’S Antitrust Antics: Two Wrongs Don’T Make A Right, But Maybe They Should, Kerry Gutknecht

CommLaw Conspectus: Journal of Communications Law and Technology Policy (1993-2015)

No abstract provided.

Technological Determinism And Its Discontents, Christopher S. Yoo

All Faculty Scholarship

This book review takes a critical review of the claim advanced by Susan Crawford in Captive Audience that the merger between Comcast and NBC Universal would harm consumers and that policymakers should instead promote common carriage regulation and subsidize municipal symmetrical gigabit fiber-to-the-home (FTTH). First it evaluates the extent to which next-generation digital subscriber lines (DSL) and wireless broadband technologies can serve as effective substitutes for cable modem service, identifying FCC data showing that the market has become increasingly competitive and likely to continue to do so. Furthermore, the market is not structured in a way that would permit the …

The Wires Go To War: The U.S. Experiment With Government Ownership Of The Telephone System During World War I, Michael A. Janson, Christopher S. Yoo

All Faculty Scholarship

One of the most distinctive characteristics of the U.S. telephone system is that it has always been privately owned, in stark contrast to the pattern of government ownership followed by virtually every other nation. What is not widely known is how close the United States came to falling in line with the rest of the world. For the one-year period following July 31, 1918, the exigencies of World War I led the federal government to take over the U.S. telephone system. A close examination of this episode sheds new light into a number of current policy issues. The history confirms …

Fixing Frand: A Pseudo-Pool Approach To Standards-Based Patent Licensing, Jorge Contreras

Jorge L Contreras

Technical interoperability standards are critical elements of mobile telephones, laptop computers, digital files, and thousands of other products in the modern networked economy. Most such standards are developed in so-called voluntary standards-development organizations (SDOs) that require participants to license patents essential to the standard on terms that are “fair, reasonable and non-discriminatory” (FRAND). FRAND commitments are thought to avoid the problem of patent hold-up: the imposition of excessive royalty demands after a standard has been widely adopted in the market. While, at first blush, FRAND commitments seem to assure product vendors that patents will not obstruct the manufacture and sale …

Antitrust, The Internet, And The Economics Of Networks, Christopher S. Yoo, Daniel F. Spulber

All Faculty Scholarship

Network industries, including the Internet, have shown significant growth, substantial competition, and rapid innovation. This Chapter examines antitrust policy towards network industries. The discussion considers the policy implications of various concepts in the economics of networks: natural monopoly, network economic effects, vertical exclusion, and dynamic efficiency. Our analysis finds that antitrust policy makers should not presume that network industries are more subject to monopolization than other industries. We find that deregulation and the strength of competition in network industries have removed justifications for structural separation as a remedy. Also, we argue that that deregulation and competition have effectively eliminated support …

Antitrust And The 'Filed Rate' Doctrine: Deregulation And State Action, Herbert J. Hovenkamp

All Faculty Scholarship

In its Keogh decision the Supreme Court held that although the Interstate Commerce Act did not exempt railroads from antitrust liability, a private plaintiff may not recover treble damages based on an allegedly monopolistic tariff rate filed with a federal agency. Keogh very likely grew out of Justice Brandeis's own zeal for regulation and his concern for the protection of small business — in this case, mainly shippers whom he felt were protected from discrimination by filed rates. The Supreme Court's Square D decision later conceded that Keogh may have been “unwise as a matter of policy,” but reaffirmed it …

Competition In Information Technologies: Standards-Essential Patents, Non-Practicing Entities And Frand Bidding, Herbert J. Hovenkamp

All Faculty Scholarship

Standard Setting is omnipresent in networked information technologies. Virtually every cellular phone, computer, digital camera or similar device contains technologies governed by a collaboratively developed standard. If these technologies are to perform competitively, the processes by which standards are developed and implemented must be competitive. In this case attaining competitive results requires a mixture of antitrust and non-antitrust legal tools.

FRAND refers to a firm’s ex ante commitment to make its technology available at a “fair, reasonable and nondiscriminatory royalty.” The FRAND commitment results from bidding to have one’s own technology selected as a standard. Typically the FRAND commitment is …

Tying And Consumer Harm, Daniel A. Crane

Articles

Brantley raises important issues of law, economics, and policy about tying arrangements. Under current legal principles, Brantley was on solid ground in distinguishing between anticompetitive ties and those that might harm consumer interests without impairing competition. As a matter of economics, the court was also right to reject the claim that the cable programmers forced consumers to pay for programs the customers didn’t want. The hardest question is a policy one - whether antitrust law should ever condemn the exploitation of market power in ways that extract surplus from consumers but do not create or enlarge market power. I shall …

Antitrust Review Of The At&T/Tmobile Transaction, Allen P. Grunes, Maurice E. Stucke

Federal Communications Law Journal

In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation's four largest mobile wireless telecommunications services providers, AT&T Inc. and T-Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice's lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile? This Article examines the recent …

Unfit For Prime Time: Why Cable Television Regulations Cannot Perform Trinko's 'Antitrust Function', Keith Klovers

Michigan Law Review

Until recently, regulation and antitrust law operated in tandem to safeguard competition in regulated industries. In three recent decisions-Trinko, Credit Suisse, and Linkline-the Supreme Court limited the operation of the antitrust laws when regulation "performs the antitrust function." This Note argues that cable programming regulations-which are in some respects factually similar to the telecommunications regulations at issue in Trinko and Linkline-do not perform the antitrust function because they cannot deter anticompetitive conduct. As a result, Trinko and its siblings should not foreclose antitrust claims for damages that arise out of certain cable programming disputes.

Comcast/Nbcu: The Fcc Provides A Roadmap For Vertical Merger Analysis, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

The FCC’s analysis of the Comcast-NBCU transaction fills a gap in the contemporary treatment of vertical mergers by providing a roadmap for courts and litigants addressing the possibility of anticompetitive exclusion. The FCC identified the factors any judicial or administrative tribunal would likely consider today in analyzing whether a vertical merger would lead to anticompetitive input or customer foreclosure, and a range of economic methods potentially relevant to applying that template to the facts of a transaction. Notwithstanding the difference between administrative adjudication under a public interest standard and judicial decision-making under the Clayton Act, the legal framework and economic …

Are Those Who Ignore History Doomed To Repeat It?, Peter Decherney, Nathan Ensmenger, Christopher S. Yoo

All Faculty Scholarship

In The Master Switch, Tim Wu argues that four leading communications industries have historically followed a single pattern that he calls “the Cycle.” Because Wu’s argument is almost entirely historical, the cogency of its claims and the force of its policy recommendations depends entirely on the accuracy and completeness of its treatment of the historical record. Specifically, he believes that industries begin as open, only to be transformed into closed systems by a great corporate mogul until some new form of ingenuity restarts the Cycle anew. Interestingly, even taken at face value, many of the episodes described in the …

Antitrust Review Of The At&T/T-Mobile Transaction, Maurice E. Stucke, Allen Grunes

College of Law Faculty Scholarship

In this Essay, we review AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA, Inc., under federal merger law, under the U.S. Department of Justice and Federal Trade Commission’s 2010 Horizontal Merger Guidelines, and with a focus on possible remedies. We find, under a rule of law approach, that the proposed acquisition is presumptively anticompetitive, and the merging parties in their public disclosures have failed to overcome this presumption. Next we find that under the Merger Guidelines, there is reason to believe that the transaction may result in higher prices to consumers under several different plausible theories. Finally, we turn …

Plurality Of Political Opinion And The Concentration Of Media In The United States, William B. Fisch

Faculty Publications

This paper reviews regulatory efforts of the U.S. federal govern- ment to promote viewpoint diversity in broadcast media (radio, television, cable, and satellite) in the face of increasing concentration of ownership of such media, and the impact on such efforts of the free- doms of speech and press embodied in the First Amendment to the federal constitution. With respect to this issue, the regulatory work has been done overwhelmingly by the Federal Communications Commis- sion, operating under an act of Congress which has been amended from time to time to push the FCC in particular directions. The anti- trust laws …

Linkline's Institutional Suspicions, Daniel A. Crane

Articles

Antitrust scholars are having fun again. Not so long ago, they were the poor, redheaded stepchildren of the legal academy, either pining for the older days of rigorous antitrust enforcement or trying to kill off what was left of the enterprise. Other law professors felt sorry for them, ignored them, or both. But now antitrust is making a comeback of sorts. In one heady week in May of 2009, a front-page story in the New York Times reported the dramatic decision of Christine Varney-the Obama Administration's new Antitrust Division head at the Department of Justice-to jettison the entire report on …

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

All Faculty Scholarship

One of the most distinctive developments in telecommunications policy over the past few decades has been the increasingly broad array of access requirements regulatory authorities have imposed on local telephone providers. In so doing, policymakers did not fully consider whether the justifications for regulating telecommunications remained valid. They also allowed each access regime to be governed by its own pricing methodology and set access prices in a way that treated each network component as if it existed in isolation. The result was a regulatory regime that was internally inconsistent, vulnerable to regulatory arbitrage, and unable to capture the interactions among …

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

All Faculty Scholarship

On April 18-19, 2008, the University of Pennsylvania Law School hosted a landmark conference on “The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective.” This conference was the first major event for Penn’s newly established Center for Technology, Innovation, and Competition, a research institute committed to promoting basic research into foundational frameworks that will shape the way policymakers think about technology-related issues in the future. The breakup of AT&T represents an ideal starting point for reexamining the major themes of telecommunications policy that have emerged over the past quarter century. The conference featured a keynote address by …

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

Publications

Most debates over the structure of merger review in the telecommunications industry focus on the criticism that the role of the Federal Communications Commission (FCC) is entirely redundant in light of the review conducted by the antitrust agencies. The FCC's lack of a consistently applied standard only reinforces such criticisms. There are, however, cases where the FCC's review of a merger - and imposition of conditions that complement the existing regulatory regime - enable the antitrust agencies to clear mergers that would otherwise pose potential objections.

The central challenge for competition policy merger review is to structure the analysis of …

Internet 3.0: Identifying Problems And Solutions To The Network Neutrality Debate , Robert M. Frieden

ExpressO

What Internet Service Providers (“ISPs”) can and cannot do to diversify services lies at the core of the debate over network neutrality. In prior generations ISPs had little incentive or technological capability to deviate from plain vanilla best efforts routing for content providers and from standard “all you can eat” subscription terms for consumer access to the World Wide Web. The next generation Internet has the technological capability and ISPs have the commercial motivation to offer “better than best efforts” routing and premium services for both content providers and consumers seeking higher quality of service and more reliable traffic delivery. …

Mandating Access To Telecom And The Internet: The Hidden Side Of Trinko, Daniel F. Spulber, Christopher S. Yoo

All Faculty Scholarship

Antitrust has long played a major role in telecommunications policy, demonstrated most dramatically by the equal access mandate imposed during the breakup of AT&T. In this Article we explore the extent to which antitrust can continue to serve as a source of access mandates following the Supreme Court's 2004 Trinko decision. Although Trinko sharply criticized access remedies and antitrust courts' ability to enforce them, it is not yet clear whether future courts will interpret the opinion as barring all antitrust access claims. Even more importantly, the opinion contains language hinting at possible bases for differentiating among different types of access, …