The FCC’s Flawed Understanding of Competition

Federal Communications Commission Chairman Tom Wheelr’s understanding of what “competition” means is flawed, because, under his leadership, the FCC’s competition analyses often narrowed the scope of markets by excluding existing competitors, as well as potential competitors, from the assessments.

When competition assessments are skewed by narrowing market definitions, it’s easier for the Commission to argue that it must retain its traditional grip on regulatory power – even as, in reality, communications markets become more competitive, right before our very eyes.

The agency has just proposed new regulations which are intended to mandate the use of a new “open standard” set-top TV box – a “navigation device” – that would be designed, over two or three years, by a government advisory committee. This new navigation device supposedly would be used by subscribers to access video programming provided by their multichannel video provider, regardless whether such provider is a cable operator, satellite provider, or telephone company. As a result of technological and marketplace developments, the traditional set-top box navigation device is on the verge of being replaced entirely by apps that will sit on your smartphones, tablets, laptops – and right on the new Smart TVs. The FCC, locked in yesterday’s world, decrees that the government must engage in a costly process to design a new “open standards” device with uniform specifications.

This example of improper competition assessments show there is a difference between simply proclaiming “competition, competition, competition” as a mantra and understanding what competition really means and how to elevate it.

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