In Two Tech Actions, Trump Administration Stresses Enforcement

Over just two days this week, the Trump administration has both sued AT&T Inc. to block its planned takeover of Time Warner Inc. and proposed allowing internet-service providers -- like AT&T -- to form closer alliances with content companies, like Time Warner.

The two government moves seem to go in opposite directions, on the one hand restricting a major telecommunications merger and on the other giving internet providers broad new powers to shape their customers' online experiences.

But the actions reveal one consistency, and what might be viewed as an emerging Trump administration regulatory philosophy: Instead of new bright-line rules, such as those put in place under the Obama administration, it is stressing the enforcement of longstanding laws and regulations.

The moves are a shift in emphasis from the approach taken by the Obama administration, which in 2015 adopted highly specific rules governing internet providers in the name of "net neutrality," the principle that all web traffic be treated equally. The providers were prevented from cutting deals, known as "paid prioritization," that would give fast lanes to some kinds of content in return for a price.

And the Obama administration carried that approach into the antitrust realm, insisting in Comcast Corp.'s acquisition of NBCUniversal, Inc. earlier this decade that Comcast live up to elaborate net-neutrality restrictions, as part of the so-called behavioral remedies that were conditions of antitrust approval.

In other words, net-neutrality regulation took the place of an antitrust challenge.

Now the tables are turned. When it comes to internet policing, the FCC will ease back on its rules and turn a measure of oversight authority to the antitrust cop, the Federal Trade Commission, a deliberate action outlined Tuesday by FCC Chairman Ajit Pai.

"As a result of my proposal, the Federal Trade Commission will once again be able to police [internet providers], protect consumers and promote competition, just as it did before 2015," Mr. Pai said. "Notably, my proposal will put the federal government's most experienced privacy cop, the FTC, back on the beat to protect consumers' online privacy."

In the case of net neutrality, Mr. Pai's FCC moved fairly quickly by regulatory standards. It is too soon to know whether this enforcement emphasis will extend to other parts of the Trump deregulatory agenda, which involves rolling back a broad range of Obama-era rules covering power-plant emissions, financial services and other industries.

In the financial sector, Mr. Trump's regulatory team has launched a review of stricter rules adopted after the 2008 bailouts. In general, officials say they want to recalibrate standards governing bank lending and other areas without scrapping them entirely.

It isn't clear whether financial regulators will maintain the streak of aggressive enforcement actions that began under the Obama administration. Fines levied by the Securities and Exchange Commission fell to a four-year low in the last fiscal year, though SEC officials caution against reading too much into a single year's data.

At the Environmental Protection Agency, Administrator Scott Pruitt has touted a "back-to-basics" approach involving the reversal of numerous Obama regulations and has said he would emphasize enforcement.

"There's a difference between creating regulatory certainty and holding polluters accountable for violating environmental laws," said EPA spokeswoman Liz Bowman.

Environmental groups say the EPA's actions so far this year don't suggest a robust emphasis on enforcement. The agency counters that those groups' estimates are low because it can take months or years before such an action can be completed.

Consumer groups argue that clear regulations are necessary across industries to keep companies from harming consumers. With the internet, they say, antitrust enforcement is too cumbersome, slow and potentially arbitrary to keep up with the speed of technological change.

Because the FTC doesn't have the authority to create and enforce broad rules, it isn't in a position to police fast and slow lanes that may harm competition, said Jonathan Zittrain, professor of law and computer science at Harvard University and a former chairman of the FCC's Open Internet Advisory Committee. The agency can only take "individual enforcement action on the vague notion of unfair trade practices," he said.

Conservatives who believe in a lighter-tough regulation, like Mr. Pai, generally argue that hard-and-fast regulatory rules are overly prescriptive and will slow investment and innovation.

Some free-market advocates take that even further, saying the antitrust action this week goes too far, especially given that the AT&T-Time Warner tie-up is a "vertical" merger, or one that combines two companies that operate at different stages of a supply chain.

"If this one [transaction] isn't good, what vertical integration transaction is going to be good? Virtually none," said Fred Campbell, director of Tech Knowledge, a free-market think tank and a former head of the FCC's wireless bureau about a decade ago. "Isn't it a de facto regulation then that we're just going to prohibit vertical integration?"


Douglas MacMillan

, Ryan Knutson, Ryan Tracy and Timothy Puko contributed to this article.

Write to John D. McKinnon at

(END) Dow Jones Newswires

November 22, 2017 05:44 ET (10:44 GMT)