Internet Regulation and Consumer Welfare: Innovation, Speculation, and Cable Bundling

Authors

John E. Lopatka, University of South CarolinaFollow
William H. Page, University of Florida Levin College of LawFollow

Document Type

Article

Publication Date

4-2001

OCLC FAST subject heading

Antitrust law

Abstract

The goal of telecommunications policy has shifted from the control of natural monopoly to the promotion of competition. But the question remains how extensive and persistent the government's regulatory role should be in the operation of communications markets. One might think that regulators could find the answer to this question in antitrust law. But antitrust has itself been torn between interventionist and laissez-faire tendencies. Over the past two decades, the dominant Chicago School approach to antitrust has focused on economic efficiency, a standard that has led to the abandonment or contraction of some categories of liability. More recently, however, post-Chicago theorists have suggested that the particular characteristics of the "new economy," particularly the economics of networks, justify a more interventionist approach. As it happens, telecommunications lies at the heart of the new economy. Couching the inquiry in antitrust terms, therefore, does not resolve the critical policy issues.

These issues have come to the fore in the dispute over regulation of broadband Internet access. The Internet is sometimes viewed as a world of laissez-faire, largely distinct from the established regime of telecommunications and mass media regulation. For historical and political reasons, the same standards of content and economic regulation that apply to other media have not been extended to Internet communications. But the contradictions that this dichotomy raises have been unavoidable in the broadband context.

The question we address specifically is whether government should require open access. But this question is only one aspect of a larger issue: when should the government regulate competitive conduct in the new economy, which is characterized by extraordinary rates of innovation, modest capital requirements, economies of scale in production and consumption, and frequent entry and exit? This question has no simple answer.

Comments

A part of Symposium: Consumers in the Digital Age: Perspectives on the Intersection of Law, Technological Innovation, and Consumer Protection.

Recommended Citation

John E. Lopatka & William H. Page, Internet Regulation and Consumer Welfare: Innovation, Speculation, and Cable Bundling, 52 Hastings L.J. 891 (2001).