Winehole23
03-19-2013, 01:25 AM
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 Comcast nor Time Warner has any incentive to replace its cable wiring with optical fiber. Fiber allows data to flow much more quickly than cable, especially when it comes to users uploading rather than downloading—something that will be increasingly important as people rely on cloud-based data centers.
Instead of plowing their enormous profits into new infrastructure that would benefit the whole nation, cable company executives pump all that cash into dividends and stock buybacks, enriching themselves and their biggest stockholders while keeping Wall Street analysts happy, Crawford argues.
Part of Crawford's tale is about how legislators and regulators—catering to big money and powerful lobbyists—have aided and abetted this downward slide. "Instead of ensuring that everyone in America can compete in a global economy … U.S. politicians have chosen to keep Comcast and its fellow giants happy," she writes. And that includes Barack Obama, who she says has not lived up to his promises to make "world-leading, reasonably priced, wired open Internet access for everyone" a priority. In Crawford's view, Obama FCC chief Julius Genachowski is as timid as his predecessors when it came to confronting the powerful telecom interests,
Crawford also despairs at how consistently the press has missed the big story in favor of smaller ones about new deals and shiny objects. She is particularly critical of the paltry coverage of the Comcast/NBC Universal merger, the immensity and destructiveness of which is her book's main argument.
Crawford also dispels the common misperception that wireless is an adequate substitute for wired service. Wireless provides dramatically lower speed for dramatically higher prices. The kinds of high-bandwidth activities that are rapidly becoming essential at home or in the office are simply impossible, whether it's streaming video, running a small business, or taking advantage of cloud computing. The reality, Crawford writes, is that "a racial and economic digital divide is emerging in America: Hispanics, rural Americans, African Americans, and low-income Internet users disproportionately rely on wireless connections for access to the Internet."http://www.nieman.harvard.edu/reports/article/102838/Cant-Live-with-em-Cant-Live-without-em.aspx
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 Comcast nor Time Warner has any incentive to replace its cable wiring with optical fiber. Fiber allows data to flow much more quickly than cable, especially when it comes to users uploading rather than downloading—something that will be increasingly important as people rely on cloud-based data centers.
Instead of plowing their enormous profits into new infrastructure that would benefit the whole nation, cable company executives pump all that cash into dividends and stock buybacks, enriching themselves and their biggest stockholders while keeping Wall Street analysts happy, Crawford argues.
Part of Crawford's tale is about how legislators and regulators—catering to big money and powerful lobbyists—have aided and abetted this downward slide. "Instead of ensuring that everyone in America can compete in a global economy … U.S. politicians have chosen to keep Comcast and its fellow giants happy," she writes. And that includes Barack Obama, who she says has not lived up to his promises to make "world-leading, reasonably priced, wired open Internet access for everyone" a priority. In Crawford's view, Obama FCC chief Julius Genachowski is as timid as his predecessors when it came to confronting the powerful telecom interests,
Crawford also despairs at how consistently the press has missed the big story in favor of smaller ones about new deals and shiny objects. She is particularly critical of the paltry coverage of the Comcast/NBC Universal merger, the immensity and destructiveness of which is her book's main argument.
Crawford also dispels the common misperception that wireless is an adequate substitute for wired service. Wireless provides dramatically lower speed for dramatically higher prices. The kinds of high-bandwidth activities that are rapidly becoming essential at home or in the office are simply impossible, whether it's streaming video, running a small business, or taking advantage of cloud computing. The reality, Crawford writes, is that "a racial and economic digital divide is emerging in America: Hispanics, rural Americans, African Americans, and low-income Internet users disproportionately rely on wireless connections for access to the Internet."http://www.nieman.harvard.edu/reports/article/102838/Cant-Live-with-em-Cant-Live-without-em.aspx