Antitrust Lawyer Blog Commentary on Current Developments

Questions Raised over Unbundled Network Elements in Broadband Market

On May 9, a judge with the U.S. Court of Appeals for the D.C. Circuit raised questions about EarthLink, Inc.'s (“EarthLink”) assertion that the FCC erred when it stopped requiring the Bell operating companies (“BOCs”) to make available unbundled network elements for the broadband market because there isn't any competition in the sector. The judge noted that telcos are not the leading provider of high-speed Internet services nationally. Judge David B. Sentelle asked EarthLink attorney Mark O'Connor how the Bells could be the dominant player in the market, as the Internet service provider charged, when they have less of the market than cable modem service providers.
The debate took place during the oral arguments for EarthLink v. FCC (case 05-1087). O'Connor called the FCC's October 2004 ruling that triggered EarthLink's appeal “an attempt by the FCC to rewrite competition law.” However, FCC attorney Nandan Joshi defended the Commission's action, saying the broadband service market “shows every sign” of being competitive. He noted that prices are coming down, more companies are investing in new technology, and that more people can now sign up for service. He also said statistics clearly show that telcos do not have a corner on the high-speed Internet marketplace. According to Joshi, “The FCC found broadband markets are emerging … and that the BOCs are playing catch-up. The question for the FCC here was, was it necessary to saddle the number two provider with an unbundling requirement.”