Can't Live with 'Em, Can't Live without 'Em: How Big Telecoms Firms Put a Chokehold on America's Communication Pipelines-And What Should Be Done about It

By Froomkin, Dan | Nieman Reports, Winter 2013 | Go to article overview

Can't Live with 'Em, Can't Live without 'Em: How Big Telecoms Firms Put a Chokehold on America's Communication Pipelines-And What Should Be Done about It


Froomkin, Dan, Nieman Reports


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CONSIDER TWO POSSIBLE AMERICAN futures. In both, because one cannot imagine it any other way, ubiquitous high-speed connectivity to the Internet is essential in order to fully engage in society, the economy, and the public sphere.

In one possible future--call it utopian-such access is available to everyone; it's fast, and it's not prohibitively expensive. But in the other future--call it dystopian--a handful of giant corporations share almost complete control of wired and wireless access. They don't compete with each other and feel no pressure to provide the kind of high speed, low prices, and universal service available in other countries. Large swaths of American society can't afford or obtain adequate service, making them essentially second-class citizens. As the U.S. stagnates, better-wired economies in Europe and Asia leap ahead.

In "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,' telecommunications policy expert and Cardozo School of Law professor Susan Crawford chronicles and contextualizes the extraordinary rise of industry behemoth Comcast, culminating in its 2011 merger with media and entertainment giant NBC Universal. In telling this story, Crawford compellingly and disturbingly makes clear that we are well on our way to that dystopian future--if not there already--with Comcast boldly leading the charge.

IT'S HARDLY UNUSUAL FOR AMERI cans to complain about their individual cable experiences--and, more recently, about their wireless data plans. But Crawford's book will be enlightening to consumers who don't fully recognize how collectively crippling these trends are and will be going forward. Crawford, who briefly served in the Obama White House as a special assistant to the president for technology policy, is soundly on the pro-consumer side of the telecommunications debate. But she is no radical. So it is telling that her book, which is at heart a historical chronicle, is also a strong polemic calling for a massive reapplication of governmental power to an industry whose interests have dramatically diverged from the nation's. That's where the facts lead her.

Just a decade ago, of course, the U.S. led the world in Internet access. But between 2002 and 2005, as Crawford explains, the Bush-era Federal Communications Commission (FCC) dramatically deregulated what was then a fast-moving telecommunications industry.

Historically, American companies entrusted with the delivery of public services have been subject to "common carriage" regulation, obliging them, among other things, to serve all comers at fair and affordable prices. Similarly, regulators have traditionally demanded a separation between the ownership of the conduit and the ownership of the content in the communication and transportation industries, to ensure that market forces, not self-dealing, are at work.

That's how it worked with phone service delivered through copper wires. But with the advent of the digital era, the FCC chose not to extend the traditional consumer protection regulations associated with copper to its new competitors, such as cable, fiber and wireless. The idea was that free market competition and innovation, rather than regulation, would create the best options for consumers.

But the actual result was consolidation, not competition, and the creation of the biggest trusts since the Gilded Age. Ten years later, two duopolies--Comcast and Time Warner for high-speed wired access, and Verizon and AT&T for wireless--have exploited high barriers to entry, carved up territories, squelched or absorbed would-be competitors, used their vast market power to intimidate vendors, and generally established a firm chokehold on the nation's communication pipelines, according to Crawford. As she wryly puts it: "Unregulated duopolies do well when they are selling services that Americans cannot live without."

Most notably, neither Comeast nor Time Warner has any incentive to replace its cable wiring with optical fiber. …

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