What Can Regulation Learn from Antitrust? And Vice Versa?

By Jonathan Sallet (Benton Foundation)

A look at the relationship between antitrust enforcement and sectoral regulation. Telecommunications companies have been familiar participants in the world of antitrust at least since the Kingsbury Commitment of 1913. And in sectoral regulation under the Communications Act of 1934. But our increasingly-digital age has sparked renewed interest in both antitrust and sectoral regulation.

On one side, there are calls for greater antitrust enforcement, and even reform of existing antitrust laws. At the same time, the current administration and regulatory agencies under Trump are spearheading significant de-regulation. It is, therefore, very timely, that TPRC consider the relationship between antitrust enforcement and sectoral regulation.

They certainly are not the same. Antitrust tends to operate on a case-by-case basis, examining historical fact and applying economic analysis usually labeled as the consumer welfare standard. Sectoral regulation is much more likely to operate by rules, looking to the future, in order to vindicate both economic and non-economic goals, such as localism and diversity of speech.

Of course, this topic links to specific policies, such as net neutrality, but the purpose of this panel is to look more broadly at the lessons from the history of both antitrust action and telecommunications regulation to ask not whether one is better than the other but, rather, what each can learn from the other.

Sample topics would include: What can antitrust teach regulators about the appropriate application of economic analysis in rule-making proceedings? What can regulators teach antitrust about the protection of non-economic interests? How can antitrust and regulation best collaborate with each other, such as during merger reviews, and in pursuit of competitive markets? What forms of non-economic expertise are of particular importance in considering either antitrust and regulation and what can be done to emphasize such expertise for the benefit of both? Should rulemaking processes play a bigger role in antitrust (for example through the use of presumptions)? Should experience in case-by-case adjudication inform how telecommunications regulators deal with new questions of policy that arise in dynamic fields?

To do so it is important to have panelists who represent both economic and legal disciplines and whose experience includes both antitrust and regulation. Thus, this proposal includes the following participants, each of whom has confirmed his or her willingness to participate:

• Moderator, Jamillia Ferris, former chief of staff to the Antitrust Division, who managed the FCC staff’s review of the AT&T/ DirecTV merger;

• Jonathan Baker, antitrust economist and former Director of the FTC’s Bureau of Economics and Chief Economist of the FCC;

• William Kovacic, former Chairman, FTC;

• Roslyn Layton, antitrust economist and expert in telecommunications at the American Enterprise Institute;

• Jonathan Sallet, former FCC general counsel and former deputy assistant attorney general in the antitrust division; and

• Howard Shelanski, former head of OMB’s OIRA, Director of the FTC’s Bureau of Economics, and Chief Economist at the FCC.

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