Ma Bell’s Ghost Rising

     One of the Courthouse News web page editors sent me an odd press release the other day that came from the Federal Trade Commission.
     The press release said the FTC would not go along with the Justice Department in an amicus brief before the Supreme Court. It also said something about reversing 60 years of law against using a price squeeze to corner a market.
     Without knowing what the press release was about, I said to our editor that this might involve the Department of Justice antitrust division doing everything it can to undermine the law on antitrust, as opposed to its traditional job of enforcing that law.
     Because that would be typical of this White House, using the appointment power to fill agencies with people ideologically committed against the role of that very agency.
     That tactic would result, in the antitrust area, with the reversal of an earlier position challenging Microsoft’s monopoly power and then the stuffing of the antitrust division with lawyers who think antitrust enforcement should be pulled back.
     Sure enough, that was exactly what was going in the price squeeze area. Not only that, the issue involves a child of Ma Bell, the predecessor in many ways to Microsoft, and it involves dominance of the market in high speed access to the Internet.
     A small internet provider said Pacific Bell, dba AT&T, was using its control of local infrastructure to squeeze out competitors in the business of providing high speed DSL lines.
     AT&T is setting its wholesale rate so high that an internet provider cannot compete against the price the phone company charges the retail consumer for high speed service, according to the little guy.
     An opinion by the Ninth Circuit U.S. Court of Appeals, the judicial bête noire of the political right, said such claims are viable and can go forward. In the phone company’s current appeal to the Supreme Court, the Justice Department’s antitrust division has filed an amicus brief in support of the phone giant and against the Ninth Circuit ruling.
     The antitrust division says such claims should not be allowed and that AT&T is under no obligation to offer wholesale rates, despite its absolute dominance of the local infrastructure.
     Breaking with the tradition of forming a common front on administration positions before the Supreme Court, the Federal Trade Commission voted 3-0 against an endorsement of the antitrust division’s brief. Expressing a legal opinion in direct opposition to that brief, the trade commissioners said the Ninth Circuit ruling is “unquestionably correct.”
     “There is no apparent justification,” the commissioners added, “for turning back 60 years of case law that embraces price-squeeze claims under Section 2 of the Sherman Act.”
     It is going back a way to remember life before the break up of Ma Bell. Telephones were the principal means of communication, outside of letter writing, and you paid through the nose and you had to use their equipment.
     It was little like being given the keys of the realm simply to be able to go into a store, after the break up, and shop for phones of different styles and colors that you could own.
     And the dramatic lowering of rates that came with access by competitors to the long distance lines gave an immense and direct benefit to Courthouse News Service and many other businesses that rely on communication.
     It is as though the Justice Department under this administration wants to reverse time and law and take us back to the era when the phone company could monopolize the means of communication.

%d bloggers like this: