The FCC Is Leading Us Toward Catastrophe

The FCC Is Leading Us Toward Catastrophe
Chairman Pai is trusting cable and telcos to do the right thing. Bad news for anyone who wants accessible internet.
By Susan Crawford
Apr 17 2017

I’ve spent the last few months visiting scrappy cities all over America that are charting their own destinies. They’re planning for economic growth and social justice; they’re looking hard at the challenges they face, including workforce development and affordable housing; and no one I talk to mentions Donald Trump.

What these cities have in common is that they treat fiber optic internet access as a utility, like water, electricity, sewer service, and their street grid: available to all, without discrimination, at a reasonable cost. That’s completely at odds with FCC Chairman Ajit Pai’s plans for the country. And the tension between these two views is shaping up to be an explosive issue for the next presidential election.

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Here’s what we know about Pai’s latest scheme: He’s planning to erase the utility designation the Obama FCC re-applied to high-speed internet access carriers in February 2015 (following an unprecedented 10-year period of deregulation). In parallel, in an empty bid to pay lip service to the idea of an open internet, he wants to shift authority to the Federal Trade Commission.

You can get an idea of his thinking by this approach to net neutrality, the principle that puts all online services on an equal footing and preserves the ability of smart new companies to attract investment and find their customers. His plan is wildly contingent and transparently toothless. He will (1) persuade carriers to voluntarily say something about net neutrality in their terms of service; (2) say that the FTC, an agency without rule-making authority or particular expertise in telecommunications, will go after carriers that act in ways that contradict the vague language the carriers insert into their multi-screen terms of service; and (3) remove the FCC’s legal ability to act as a regulator with respect to the private monopolies that control internet access in this country.

This is a breathtaking move. It should be deeply troubling to all Americans, no matter whom they voted for last fall. Because this move is not really about net neutrality: It’s about whether or not internet access is a utility rather than a luxury. If it’s a utility, it needs to be subject to rules, laid out in advance, about availability and quality. If it’s not, we’re saying we trust competition in the private market to protect consumers and ensure that everyone in the country gets world-class, open, nondiscriminatory internet access.

Pai is saying he trusts competition in the private marketplace. That’s nonsensical.

For about 10 years, beginning in 2004, the US departed from a long tradition of treating basic telecommunications like a utility. Michael Powell, now the lead lobbyist for the cable industry but at the time the Chairman of the FCC, told everyone that cable companies would battle it out with phone companies to provide internet access to Americans. The theory he promoted was that prices would stay low, quality would remain high, and everyone would be served because of this energetic competition for market share — so there was no need for oversight.

It turns out, though, that this plan didn’t do anything to address the monopolistic structure of telecom. Adding a little internet-y flavor to basic, physical telecommunications lines makes zero difference to the economics of building these essential connections. Because the upfront costs of building communications lines — very physical things, lots of labor costs involved — are high, because no one needs two lines to their house, and because it was cheaper to upgrade the cable systems to higher speeds than to dig up copper wires and replace them with fiber, we have ended up with a country subject to geographically divided markets, private, unconstrained monopolies, and big holes where internet access is rare and expensive where it exists at all. In urban areas, local cable monopolies generally wield tremendous power and charge as much as they like. Rural places, meanwhile, are often relegated to inadequate connections over copper phone lines.



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