This week the FCC will vote on Chairman Ajit Pai’s Restoring Internet Freedom Order. Once implemented, the Order will rescind the 2015 Open Internet Order and return antitrust and consumer protection enforcement to primacy in Internet access regulation in the U.S.

Read the full piece here.

Summary

As the Commission’s NPRM notes, the 2015 Open Internet Order “has weakened Americans’ online privacy by stripping the Federal Trade Commission — the nation’s premier consumer protection agency — of its jurisdiction over ISPs’ privacy and data security practices.”1 The Restoring Internet Freedom NPRM further notes that:

To address the gap created by the Commission’s reclassification of broadband Internet access service as a common carriage service, the Title II Order called for a new rulemaking to apply section 222’s customer proprietary network information provisions to Internet service providers. In October 2016, the Commission adopted rules governing Internet service providers’ privacy practices and applied the rules it adopted to other providers of telecommunications services. In March 2017, Congress voted under the Congressional Review Act (CRA) to disapprove the Commission’s 2016 Privacy Order, which prevents us from adopting rules in substantially the same form.

The Restoring Internet Freedom NPRM proposes to return to the status quo in place before the Commission adopted its 2015 Open Internet Order with respect to privacy rules: not to adopt any new FCC rules, and leave regulation of privacy to the FTC.3 We offer these comments in response to the Commission’s request regarding that proposal.

Summary

“Federal administrative agencies are required to engage in “reasoned decisionmaking” based on a thorough review and accurate characterization of the record. Their analysis must be based on facts and reasoned predictions; it must be rooted in sound economic reasoning; it must be logically coherent; it must not entail subterfuge or misleading statements. On even these most basic grounds the 2015 OIO falls short.

The entire open Internet rulemaking enterprise is an exercise in post hoc rationalization — the formulation of policy, not statutory interpretation. Net neutrality was determined by certain activists to be “necessary;” proponents were unable to get it from Congress; the FCC was willing; and it tried at least three times to cobble together some statutory basis to justify its preference for open Internet rules, as opposed to determining that such rules were necessary to enforcing a particular statutory provision.

The post hoc/ultra vires problem with the 2015 OIO is disturbingly similar to the one at issue in State Farm, which sets the standard by which the sufficiency of the Commission’s analysis is judged. In that case, the Court held that an agency’s (NHTSA’s) decisionmaking did not follow from the anal- ysis it undertook, nor the statutory purpose it purported to further. The same is true here. If deployment really were the aim of the 2015 OIO, the FCC could have directly encouraged it through any number of more direct (and almost certainly more effective) means. Instead, the Commission concocted a regulatory Rube Goldberg apparatus to do so only, at best, indirectly — and in a way that happened also to further a different, arguably ultra vires objective. Perhaps most tellingly, the

Commission was forced to undertake a series of actions, superficially independent of the 2015 OIO, in order to engineer several of the factual predicates necessary to enable it to justify its rule under the statute. An agency properly acting within the scope of its au- thority would not have to work so hard to fit the round peg of its chosen policy into the square hole of its statute.”

It’s fitting that FCC Chairman Ajit Pai recently compared his predecessor’s jettisoning of the FCC’s light touch framework for Internet access regulation without hard evidence to the Oklahoma City Thunder’s James Harden trade. That infamous deal broke up a young nucleus of three of the best players in the NBA in 2012 because keeping all three might someday create salary cap concerns. What few saw coming was a new TV deal in 2015 that sent the salary cap soaring.

Read the full piece here.

Summary

The agriculture sector has seen significant technological innovation and organizational change over the last two decades, leading to increases in both farm productivity and profitability. These scientific breakthroughs, most notably in crop protection science biotech seed traits and precision farming, were the result of substantial research and development (“R&D”) investment. Further, these technological breakthroughs were accompanied by organizational changes — e.g., increasing vertical and horizontal collaboration — that have enabled an increasingly complex industry to productively implement them.

In recent years the need to innovate has only increased. As technology in the sector continues to evolve, companies are increasingly adapting with structural changes to enable more effective R&D. These adaptations include increased collaboration between companies and, at times, integration of firms through mergers and acquisitions (“M&A”). This M&A activity has harmed neither competition, innovation, or investment by new entrants. In fact, combining businesses with complementary R&D has spurred innovation and accelerated the development and deployment of new products, one of the primary goals of the antitrust laws. Advances in biotechnology, crop protection science, and AgTech have provided farmers with increasingly sophisticated tools to meet the challenges of increasing demand for food  and diminishing natural resources. Far from harming innovation, M&A activity in the agriculture industry has been accompanied by tremendous increases in R&D spending by existing and new companies and enhanced agricultural productivity.

Criticisms of agricultural industry M&A activity — and to the current, proposed Bayer-Monsanto and Dow-DuPont mergers in particular — are based on one or more of several common misconceptions about the industry, innovation, competition, and the deals themselves. This paper identifies and responds to several of those misconceptions, focusing in particular on the claims raised in a 2016 working paper produced by the Agricultural and Food Policy Center at Texas A&M University, entitled Effects of Proposed Mergers and Acquisitions Among Biotechnology Firms on Seed Prices (“Texas A&M Report” or “Report”).1 Fundamentally, the Texas A&M Report incorporates flawed or incomplete antitrust law and economics in its condemnation of the pending mergers by alleging likely harms without considering their likely countervailing and procompetitive benefits. Further, the potential harms alleged are premised on unsound or outdated economic theory, or rooted in inconsistent or inaccurate characterizations of the deals, the industry, and its competitive dynamics. The Report’s substantial flaws make it an unsuitable guide to proper antitrust policy regarding the proposed deals.

Modern agriculture companies like Monsanto, DuPont, and Syngenta, develop cutting-edge seeds containing genetic traits that make them resistant to insecticides and herbicides. They also  develop crop protection chemicals to use throughout the life of the crop to further safeguard from pests, weeds and grasses, and disease. No single company has a monopoly on all the high-demand seeds and traits or crop protection products. Thus, in order for Company A to produce a variety of corn that is resistant to Company B’s herbicide, it may have to license a trait patented by Company B in order to even begin researching its product, and it may need further licenses (and other inputs) from Company B as its research progresses in unpredictable directions.

Read the full piece here.