ASPEN, CO – Addressing an audience Monday at a summit held in Aspen by The Progress & Freedom Foundation, Federal Trade Commission (FTC) Chairman Deborah Platt Majoras expressed strong doubt concerning the need for Congress to pass legislation mandating so-called “net neutrality,” arguing that “in this policy debate, we should start by acknowledging that competition generally produces the best results for consumers over time.”“I just question the starting assumption that government regulation, rather than the market itself under existing laws, will provide the best solution to a problem,” said Majoras.
While Majoras conceded that proponents of net neutrality have raised some valid concerns, she asserted that, absent any evidence of an existing problem, the question is “whether we should give the market a chance to work before stepping in to regulate this still nascent, dynamic industry.”
Noting that the FTC “frequently is asked to weigh in on proposed legislation,” Majoras claimed that “we virtually always assert the principle that, absent clear evidence of market failure or consumer harm, policymakers should not enact blanket prohibitions of particular forms of business conduct or business models or place requirements on how business is conducted.”
Majoras warned about the potential for unintended side-effects stemming from legislating net neutrality, saying that “dangers typically lie in legislating without clear evidence demonstrating the problem we wish to solve.”
“Broad regulatory mandates that employ a ‘one size fits all’ philosophy, without regard to specific facts, always have unintended consequences, some which may be harmful and some of which may not be known until far into the future,” Majoras argued. “Even the most thoughtful drafters of legislation cannot foresee all of its effects. Consequently, we should look at whether any net neutrality or similar legislation could have the effect of entrenching existing broadband platforms and market positions, as well as adversely affecting the levels and areas of future innovation and investment in this industry.”
If net neutrality provisions are not carefully considered and narrowly crafted, the “end result could be a diminution, rather than an increase, in competition, to the detriment of consumers,” Majoras said.
Saying that markets are “usually self-correcting,” Majoras further opined that in the market sector, “consumers reign, as best I can tell.”
“Consumers are powerful and tough customers,” Majoras said. “I ask myself whether consumers will stand for an that suddenly imposes restrictions on their ability to freely explore the or does not provide for the choices they want.”
Majoras also stressed that while she believes there is no clear need for new legislation, the FTC and other governing authorities would move quickly and decisively to punish anticompetitive practices under existing laws, should evidence of such practices arise.
“While I am sounding cautionary notes about new legislation, let me make clear that if broadband providers engage in anticompetitive conduct, we will not hesitate to act using our existing authority,” Majoras said. “But I have to say, thus far, proponents of net neutrality regulation have not come to us to explain where the market is failing or what anticompetitive conduct we should challenge; we are open to hearing from them.”
Majoras also pledged that the FTC will “continue our consumer protection work by, for example, holding ISPs accountable for any false or deceptive representations to consumers concerning the nature of the access provided.”
In her speech, Majoras also encouraged all those concerned to attend a series of public hearings the FTC is holding this November in Washington, DC. The Commission has invited to the meetings “an array of experts from around the world to inform us about what they see as emerging trends, applications, products, services, and issues over the next ten years,” Majoras said.
The hearings, which the FTC has named “Protecting Consumers in the Next Tech-Ade,” will be held from November 6th – 9th at George Washington University’s Lisner Auditorium. The hearings held from November 6th – 8th are open to the public, while the November 9th hearings will be limited to government and law enforcement personnel. The public hearings will also be made available as a webcast.
Full text of Majoras’ speech available here: http://www.ftc.gov/speeches/majoras/060821pffaspenfinal.pdf
For more information on the “Protecting Consumers in the Next Tech-Ade” hearings, go to: http://www.ftc.gov/techade
