Dispelling the myth of a "terminating access monopoly"

By: David Young

As the FCC moves forward with its Open Internet proceeding, we (and others) have repeatedly explained why using Title II is unnecessary, illegal (particularly with respect to mobile broadband) and bad for investment in networks, online services and manufacturers.

Central to the rationale that Title II advocates persist in using to justify common carrier regulation is the claim that broadband providers supposedly enjoy a “terminating access monopoly” that allows them to restrict consumer choice and disadvantage competitors. 

This is simply not true. And today, we filed a declaration by Professor Janusz Ordover, former Deputy Assistant Attorney General for Economics in the Antitrust Division of the U.S. Department of Justice, and Dr. Andres Lerner confirming that there is no “terminating access monopoly” for wireless broadband. As Drs. Ordover and Lerner explain, the basic premise for that case is both flatly inconsistent with the competitive reality of the mobile broadband marketplace and deeply flawed as a matter of economic theory.  

The declaration also makes clear that there is no terminating monopoly in the case of Verizon’s wireline broadband services, including Verizon’s FiOS broadband service, since these services face near-ubiquitous competition with next generation cable broadband. Verizon has invested tens of billions of dollars deploying fiber to pass nearly 70 percent of the premises in our wireline footprint.

The lack of a “terminating monopoly” eviscerates the case for Title II reclassification. When these economic considerations are added to the many other legal, factual and public policy arguments against Title II regulation, the risk of pursuing the radical Title II path becomes all the more clear.

Download the paper [PDF]

David Young has an engineering background, which enables him to develop positions on emerging public policy issues and asses key technology and communications industry trends. Prior to 2000, he spent six years working in Verizon’s Research and Development (R&D) group on many advanced technologies including VoIP, data network architectures, and audio, video and image compression. He has been awarded ten U.S. government patents for his R&D work. David is a member of the IEEE and IEEE Communications Society.