//  11/30/17  //  Commentary

In an earlier post, I explained that vertically-integrated broadband carriers can harm competition by excluding competitors to affiliated services from their platform (or from certain platform features). This may be especially true where these adjacent industries are characterized by significant first-mover advantages and large network effects. This means that ex post enforcement is often too little and, perhaps more importantly, too late. But I am sometimes asked whether these potential harms to competition are outweighed by the efficiency gains from the vertical integration.

The short answer is that it’s hard to tell. Scholars have debated the question, in general terms, without reaching a clear conclusion. Related economic models and studies say different things. Maybe it’s worth stomaching some exclusion to enjoy these gains. But maybe these gains aren’t really all that large, and the harm to competition is quite high. (Both the Obama and the Trump Administrations signaled their belief that the latter view is the better view.)

If these models can’t offer a straightforward answer, maybe a better approach is a simple error cost calculation.

If we don’t have net neutrality protections, then the risk is that phone companies will block competing voice services, cable companies will undermine threats to their video distribution businesses, and so on. That risk is credible: As I noted in my previous post, carriers have attempted to do precisely that.

If we do have net neutrality protections, then a risk is that we may lose some innovation though vertical integration that, say, optimizes an affiliated application for the platform (and vice versa). Is that risk credible? It is certainly possible. But carriers have also publicly disclaimed any interest in breaching the protections of the net neutrality rules—suggesting, perhaps, that the carriers don’t see much potential for innovation by doing so. Moreover, the FCC relies on the carriers’ representations in its draft order.

The cost of erroneously repealing the net neutrality rules is harm to competition along the lines of previous examples of exclusion. The cost of erroneously keeping the rules is, given carriers’ promises not to break them anyways, essentially nothing. Hence, under this calculus, the case for net neutrality comes down a pithy adage: Trust [that carriers won’t violate net neutrality principles], but verify [compliance through enforceable rules].


Versus Trump: Healthcare Update (With Guest Greer Donley)

4/11/19  //  In-Depth Analysis

This week on Versus Trump, Jason and Charlie talk with special guest Greer Donley, a law professor at University of Pittsburgh School of Law, to talk about the latest developments in litigation related to Obamacare, including the stunning DOJ reversal in Texas, and recent decisions prohibiting states from adding work requirements to Medicaid. Listen now!

Jason Harrow

Equal Citizens

Charlie Gerstein

Civil Rights Corps

Versus Trump: Stop The Drills!

4/4/19  //  Commentary

This week on Versus Trump, Jason and Easha discuss a recent decision reversing President Trump's attempt to de-protect Arctic Ocean waters and permit drilling in the Great White North. Listen now!

Jason Harrow

Equal Citizens

Easha Anand

San Francisco

Why SCOTUS Must Hear the Census Case on the Merits

4/1/19  //  In-Depth Analysis

The government's efforts to insulate Secretary Ross's decision from judicial review are wholly without merit. Here's why.

Joshua Matz

Publisher