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Even though never making any finding on market power,
the Commission seems almost always to speak of fixed and
mobile broadband separately. Of course to a degree the
statute requires this. But if the Commission were the least bit
serious about the market dysfunction that might provide
support for its actions, it would consider competition between
the two. The frequent articles in the conventional press about
fixed broadband customers’ “cutting the cord” in favor of
complete reliance on mobile suggests it would be an
interesting inquiry.
None of the above is intended to suggest that the
Commission could not have made a sustainable finding that
every firm in every relevant market has market power. My
aim is simply to make two points: (1) that such a degree of
market power cannot be assumed, as the Commission itself
seems to acknowledge in its disclaimer of interest in market
power, Order ¶ 11 n.12; and (2) that the Commission’s
reliance on consumers’ “high switching costs,” id. ¶ 81
(discussed below in part II), which is an implicit assertion that
the providers have market power, poses an empirical question
that is susceptible of resolution and is in tension with the
Commission’s assertion that it is not addressing “market
power or its abuse, real or potential.”
In a move evidently aimed at circumventing the whole
market power issue (despite Title II’s origin as a program for
monopoly regulation), the Commission rests on its “virtuous
cycle” theory, to wit the fact that “innovations at the edges of
the network enhance consumer demand, leading to expanded
investments in broadband infrastructure that, in turn, spark
new innovations at the edge.” Order ¶ 7. The Commission
clearly expects the policy adopted here to cause increases in
broadband investment.
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