I live at Hallowe'en central.  People are screaming, bands are playing -- the Greenwich Village parade is in full swing.  Meanwhile, I'm having trouble posting the FCC press release [warning, word doc] about its approval today of the ATT/SBC and Verizon/MCI mergers, because my home DSL upload speed is so slow.  So there's something about the sounds around me and the slow internet connectivity in front of me that provides the perfect sensory backdrop here. 

We've moved into a new era of Web 2.0 meets Telco Squared.

The 1996 Communications Act was all about competition and opening things up, and we've dismantled that.  In 1996 we could imagine protecting the internet from special-purpose legislation.  We couldn't imagine needing to protect it from the telcos, because it seemed impossible that they could ever interfere with it.  But now the internet is exposed, and at risk.

Today's mergers signal that the big carriers are now even bigger, and it's increasingly difficult to imagine real competitors for broadband internet carriers emerging (although I keep hoping -- go, BPL!).  They're becoming confident that complete dominion over the internet, complete control, is possible.  That's the big news from today.

Sure, there are some concessions - but they're tiny and probably welcomed by the merged entities.  The weak-at-the-knees policy principles adopted by the Commission in August are now part of the conditions imposed on the merger applicants -- but only for two years, and only in a wishy-washy way ("The applicants committed for a period of two years to conduct business in a way that comports with the Commission's Internet policy statement").  There may be a lot of breathing room between "comply with" and "conduct business in a way that comports with."

They have to provide naked DSL for a couple of years.  Probably something their customers are screaming for.

They have to post their peering policies for two years.  That's a good idea, but it doesn't mean that de-peering won't happen.  (They agree to keep the same number of backbone peers for three years.)

But that's it.  They don't have to allow competitors to use their networks.  They don't have to allow all devices to attach. They're free of any form of must-carry requirements.

Commissioner Copps, whose colloquially-phrased statement will be remembered for a long time, has this to say about the mergers:

I think we ought to be concerned. Thanks in part to our actions, the wireline market became increasingly the province of the few.  More than half of the wireless market came under the control of incumbent wireline providers.New services like VoIP have been held back by the high cost of broadband in this country.  And now the Internet backbone seems headed in the same direction of control by a favored few. . . . .

The more powerful and concentrated our facilities providers grow, the more they have the ability, and perhaps even the incentive, to close off Internet lanes and block IP byways.  I’m not saying this is part of their business plans today; I am saying we create the power to inflict such harms only at great risk to consumers, innovation and our nation’s competitive posture.  Because, in practice, such stratagems can mean filtering technologies that restrict use of Internet-calling services or that make it difficult to watch videos or listen to music over the web. . . .

[I]t may be that we are tacking back in time toward an era when concentrated power dictated what limited services we could and could not have and we had no recourse but to accept what was offered.

Copps calls for a "real national dialogue" on the issues of internet openness, consumer rights, broadband deployment, and other issues.  He's right.  We cannot assume that the Commission he serves is ever going to take a hard look at these problems.

Now is the time for all good antitrust lawyers to come to the aid of the internet.  There doesn't seem to be much hope that Congress will care about these problems.  As painful as litigation is, it may be the only way to straighten out the competitive situation that now obtains.

I can hear helicopters above the yelling crowd, police whistles being blown rhythmically, snare drums, screaming, bagpipes.  It's not an orderly marketplace out there -- and it shouldn't be.