DOJ: No Need for Network Neutrality Laws

The Department of Justice claims higher fees based on bandwidth consumption could lead to greater innovation.

The Department of Justice gave Congress another reason to avoid a vote on network neutrality. In a Sept. 6 filing with the Federal Communications Commission, the DOJ said lawmakers should not rush into "premature regulation" of the Internet.

Proponents of network regulation for the last two years have sought to pass regulations that would keep broadband carriers such as AT&T and Comcast from charging Internet content, application and service providers extra fees based on bandwidth consumption, a practice that network regulation proponents claim would amount to price discrimination.

Efforts to pass a network neutrality law that would have banned such pricing failed in the 109th Congress in 2006. The issue seems to have little momentum in the new 110th Congress, although legislation has been introduced in the Senate.

"Even assuming that a potential danger exists, the ambiguity of what conduct needs to be prohibited raises a real possibility that regulation would prohibit some conduct that is beneficial, while failing to stop other conduct that may be harmful," the DOJ stated in the filing.

The DOJ said differentiating service levels and pricing is a common and "often efficient way" of allocating scarce resources and satisfying consumer demand.

"No one challenges the benefits to society of these differentiated products," the DOJ said. "Whether or not the same type of differentiated products and services will develop on the Internet should be determined by market forces, not regulatory intervention."

The DOJ added that it "may make economic sense" for content providers to pay higher fees for a higher level of service in order for broadband carriers to pay for necessary upgrades to provide the service.

"Any regulation that prohibits this type of pricing may leave broadband providers unable to raise the capital necessary to fund these investments," the DOJ said in the filing.

Finally, the DOJ said new network neutrality regulations are unnecessary since the DOJ already has authority to punish any carriers that engage in anti-competitive behavior.

"Anti-competitive conduct about which the proponents of regulation are concerned will remain subject to the antitrust laws and enforcement actions by government as well as private plaintiffs," the DOJ said. "The [DOJ] will continue to monitor developments, taking enforcement action where appropriate to ensure a competitive broadband Internet access market."

The DOJ filing follows a June 27 report from the Federal Trade Commission also advising Congress to move cautiously on any laws involving network neutrality. In a statement issued with the report, FTC Chairman Deborah Platt Majoras said the broadband market is moving toward more—not less—competition.


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"In the absence of significant market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area," Majoras said.

The Open Internet Coalition, which includes eBay, Google and a number of public policy advocacy groups, moved quickly to criticize the DOJ report, particularly questioning the DOJs assessment of the broadband market. Telecom carriers and cable companies currently control 98 percent of the U.S. broadband market.

"The [DOJs] assertion contradicts the FCCs most recent study of market concentration of broadband markets, which found that a typical residential broadband market is three times more concentrated than what the Department of Justice itself defines as highly concentrated," the Open Internet Coalition said in a Sept. 6 statement.

The group added that after-the-fact regulation by the DOJ "will not serve the best interests of consumers."


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