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Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age Hardcover – January 8, 2013
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On Jan. 1, 1983, engineers launched the basic protocol for sharing bits between computers, setting in motion the networked world we live in today. Susan Crawford's book is published as the Internet enters its middle years, and it offers a timely diagnosis of the problems Americans face as we try to make the most of our digital age.
Crawford's basic prognosis is this: Internet users can no longer take the network for granted. For too long we have allowed powerful phone and cable incumbents to dictate Internet policy in America. The result is reflected in international rankings of broadband access and services, which have the United States falling far behind other developed nations. The tendency among paid corporate apologists and shills (one of whom has made an appearance in these reviews) is to blame the American geography for this decline: We're a rural nation that isn't as easily connected as, say, Singapore, they argue. Another tendency is to put the regulators at fault: If only we unchained the invisible hand of the marketplace, then the American Internet would be Numero Uno.
The truth, as Crawford points out lies somewhere else -- in our policymakers' failure to put the interests of the nation before those of profitable companies. Lobbying powerhouses like AT&T. Comcast and Verizon have flexed their financial muscle in Washington to ensure that the billion-dollar spoils of the Internet access business are shared only among a few corporations. The policies resulting from this largesse have led to the destruction of a competitive marketplace. Most Americans buying home Internet access today have just two choices: the local monopoly phone company or the local monopoly cable provider. AT&T and Verizon dominate the wireless Internet access market and also control the critical infrastructure that smaller and increasingly irrelevant competitors like Sprint need. We have no choice but to do business with these dominant companies. If we think they're ripping us off, we can't vote with our feet -- as there's nowhere else to go.
This concentration of gatekeeper power has very real -- and very negative -- consequences. Americans pay far more for far less than people in developed countries whose policymakers have promoted competition instead of profits. Crawford rightly notes that it's time our leaders in Washington, D.C., did the same.
The internet is more than a cloud; it's people, technology and physical infrastructure. As with any infrastructure, the Internet needs protection and maintenance to survive. Otherwise the wires and signals that send digital communications would cease to function. The online community also needs protections -- to prevent our ideas from being blocked, our identities from being hijacked and our wallets from being picked.
To connect every American to a world-class Internet, we need to confront the market power of phone and cable companies and open the way for alternatives, such as the municipal broadband networks communities are building across the country. We need to do this not just to benefit Internet users but to regain America's global standing in an increasingly networked world.
The good news is that in 2012 Internet users rose up en masse to protect these rights and keep the network open. When the entertainment industry tried to push an Internet-crippling copyright bill, more than 15 million people urged Congress to stop it. When governments used a U.N. telecommunications conference to propose new powers to censor the Web, Internet freedom advocates worldwide joined forces to scuttle the plan.
Politicians need to follow the lead of the netroots -- to stop listening only to the corporate lobbyists from AT&T, Comcast and the like and start representing Internet users, who demand more open and affordable access in a marketplace with real consumer choice.
This approach seems obvious. But too often in Washington simple solutions are pushed aside in favor of a blind adherence to a cashed fueled philosophy of deregulation and profits above all else.
Crawford warns of dire consequences should policymakers follow the lead of corporate lobbyists alone. Tens of millions of children will not have the tools they need to succeed in the modern world. Millions of good paying middle class American jobs will never be created. Tomorrow's innovative companies will not be created on our shores, but will be started in the garages of the countries whose leaders recognize the importance of public interest infrastructure policies and the need to protect our Internet freedoms.
As we celebrate 30 years of the modern Internet, we need to look to the future and figure out ways to make it better. There is a role for activism and advocacy, but also one for our government to promote the public interest by ensuring that every American can participate in a free and fair communications market.
Crawford's book is our call to action.
Comcast is the communications equivalent of Standard Oil in the Rockefeller era. Even before its merger with NBC Universal it was the nation's largest cable operator and the owner of many cable content properties - including 11 regional sports networks. It had almost 16 million subscribers. NBC Universal owned some of the most popular cable networks and one of the largest broadcast networks. The merged company would control 20% of all television viewing in the U.S. Mobile wireless is too slow to compete.
A similar situation happened in the 1880s when 15 holding companies controlled 85% of electricity distribution, and the FTC found they routinely gouged consumers. In response, thousands of communities formed their own electrical utilities, more than 2,000 U.S. communities such as L.A., San Antonio, and Seattle, provide their own power, and electricity is a regulated public utility. Only a few cities provide their own Internet service (eg. Chattanooga, TN and Lafayette, LA) , there's no regulation of Internet rates and service, and the leaders reap 95% profit rates.
New entrant Google is now offering 700 MB service in Kansas City for $70/month, Comcast sells 100-megabit service for $200/month. Using a standard cable connection, backing up 5 GB of data takes 90 minutes; with a gigabyte connection, it can be done in less than a minute. Cable wire is 20X faster than 4G wireless. With a fully fiber-based network video conferencing would become routine and every household could see 3D and Super HD images. Bringing fiber to all Americans would cost an estimated $50 - $90 billion, per Corning Glass.
Bottom-Line: American homes and businesses are being gouged by an oligopoly of Internet providers.