The Department of Justice, normally a staid, even boring department of the U.S. government, is not known for issuing colorful press releases. But today, the DOJ issued a press note in which it came out against network neutrality and argued that the broadband service providers can charge extra for prioritizing web traffic. The DOJ also filed a late notice to this effect with the Federal Communications Commission.
“Consumers and the economy are benefitting from the innovative and dynamic nature of the Internet,” said Thomas O. Barnett, assistant attorney general in charge of the DOJ’s antitrust division. “Regulators should be careful not to impose regulations that could limit consumer choice and investment in broadband facilities.”
It is strange logic — most believe that the U.S. broadband duopoly is one of the main reasons why some of the more innovative and dynamic services aren’t coming to market. The seemingly politically motivated arguments being made by DOJ’s Barnett read oddly:
The Department also noted that differentiating service levels and pricing is a common and often efficient way of allocating scarce resources and satisfying consumer demand. The U.S. Postal Service, for example, allows consumers to send packages with a variety of different delivery guarantees and speeds, from bulk mail to overnight delivery. These differentiated services respond to market demand and expand consumer choice.
Yes, but there are other options — namely DHL, FedEx (FDX) and UPS (UPS). And we are free to choose. (I wonder if the U.S. Postal Service would have delivered different service tiers had there been no free market competition.) I think the whole broadband and network neutrality argument should be viewed from the prism of competition.
Cynthia Brumfield sums up this press offensive best.
It’s possible that the inherently free-market thinkers that typically populate the antitrust division find the imposition of regulations in the absence of any evidence of market harm so loathsome that DOJ feels it necessary to skip all the tedious intellectual back-and-forth. That’s understandable, but somewhat disappointing.