IF THERE’S ONE THING that brings Americans together, it’s our hatred of the giant companies that sell us high-speed data services. Consumers routinely give Comcast, Charter (now Spectrum),Verizon,CenturyLink andAT&T basement-level scores for customer satisfaction.
This collective resentment is fuelled by the sense that we don’t have a choice when we sign up for their services. By and large, we don’t: These five companies account for over 80% of wired subscriptions and have almost total power in their territories. According to the FCC, nearly75% ofAmericans have at most one choice for high-speed data. It’s about to get worse: President Trump’s FCC, under the leadership of its fiercely deregulatory chairman, Ajit Pai, wants to let these companies become even more powerful by letting them do whatever they want and allowing them to merge with one another.
Pai has already pushed Congress to erase rules that would have constrained these companies from using and selling our sensitive online information.And he is getting ready to wipe out the classification of high-speed data services as a utility—even though, without this legal label, the FCC’s authority to require these five companies to treat their customers fairly will be fatally undermined.Pai is responsible for a sector that accounts for a sixth of the American economy. But even that is an understatement: Everything we do, from manufacturing to governance, requires reliable, inexpensive, world-class data transmission.
Perhaps the most immediate concern is the commission’s so-called net neutrality rule, which treats internet providers as utilities and requires them to handle all data the same.The Big Five would love to get rid of this oversight, in part because they have become big players in providing content themselves, and Pai has put dismantling this structure at the top of his agenda. There’s nothing particularly complex about net neutrality.Try this thought experiment: Would you want five companies owning every road inAmerica and deciding who gets to travel where, at what price and speed? Taken further, should Verizon be able to require that the“internet of things” include only its things?
It’s not just that the existing giants want free rein over their customers. They also want even greater scale and even greater involvement in content as well as distribution— and they’re likely to get a green light from the FCC.Comcast bought NBCU a few years ago. Now behemoth AT&T, which already swallowed up DirecTV, wants to buy HBO’sandCNN’sprogrammingthroughan $85 billion merger with Time Warner.Verizon already bought AOL, is about to absorb Yahoo and is rumoured to be considering the purchase of Spectrum, the second-largest internet service provider in the country.
Combining untrammelled power over distribution with must-have content gives a network operator both the incentive and the ability to use its network to benefit itself, whether or not its actions are good for the public.This has been true of communications networks from the telegraph forward, and we’re seeing this same pattern play out with high-speed internet access. And the big picture is an even bigger problem.
Other countries—South Korea, Sweden, even China—have made the widespread adoption of universal, inexpensive, high-speed data transmission a priority. They believe such access is necessary for their competitive positions on the global stage and understand that markets if left to their own devices,won’t deliver this benefit to all citizens.
Pai, on the other hand, clearly believes that unconstrained companies, unthreatened by competition, will magically provide the networks we need. Given their track record, it’s hard to go along with him. The one bright light in this dismal story is the power of local authorities to encourage the construction of the communications equivalent of a street grid: fiber-optic networks running to every home and business. Hundreds of local governments, fed up with the existing network providers, have done exactly that.
According to a recent Pew Research Center survey, most Americans approve of this kind of local government effort.But the halls of state legislatures swarm with telecom lobbyists, and, amazingly, about 20 states already bar municipalities from making this choice. Not surprisingly, Pai has vigorously opposed federal proposals to block those state laws.
We have always relied on private providers to sell basic telecommunications services, but they have historically been subject to public obligations and the watchful eye of a regulator looking ahead for abuses of power. No one could possibly think it is reasonable to leave a few companies operating in the centrally important, highly concentrated internet access industry, free to do whatever they want.We dislike these companies for good reasons.
–Susan Crawford, Professor, Harvard Law School.