The perfect storm of the Comcast/Time Warner Cable merger and the Net neutrality fight will decide our future for decades to come.
Now it’s on to the next cliffhanger: whether or not we will destroy the nation’s innovation and communication by handing the big ISPs either of their two huge wishes. The first wish is to allow Time Warner and Comcast to merge into one massive company that would control everything from last-mile access to content providers like NBC, Universal Studios, and a massive list of other media; the second is to essentially eliminate regulation on all data services they provide.
I doubt the U.S. economy can survive if both wishes are granted. We’ll be hard up for decades if either come to pass, but both? That’s probably the end of the line.
It was a scant 30 years ago that we sliced AT&T into pieces and removed a telecommunications monopoly from power. Prior to that, there were no other options for phone service, rates were whatever they were, equipment had to be rented from the provider, and customer service was pedestrian. Innovation from outside AT&T along telecom lines was next to nothing. Bell Labs was a shining diamond in this midst, but it was the R&D arm — the business side was a black hole. The tale of the answering machine’s birth in the 1930s and subsequent burial for several decades provides some insight there.
This is the kind of monster we’ve already allowed to rebuild in the United States in the form of Comcast and Time Warner separately — yet without the regulation that AT&T functioned under. They openly collude to remain uncompetitive with each other, marking out territories for service that the other will not enter, and even trading territories when convenient to both parties. Then they have the unmitigated gall to claim they are indeed competing. Furthermore, they’ve resurrected Nixon’s Silent Majority to back up this claim. It’s a theater of the absurd.
To put not too fine a point on it, we already have big problems with collusion and monopolistic practices in Internet service in this country without allowing the two major nationwide ISPs to merge into a massive, unholy, monolithic beast. To anyone with any sense of what dealing with these companies is actually like, we should be actively looking toward fostering more competition by opening up a free market in Internet services allowed under Title II common carrier status. This has already succeeded in many countries, but we are somehow heading in the opposite direction.
Meanwhile, in major markets where there is competition, we’re seeing massive innovations. In mobile, we now have data service speeds that put Comcast and Time Warner Cable’s wired data services to shame, but are hamstrung by data caps. However, in the past seven years we’ve seen huge leaps in mobile technology and in smartphones in general. We’ve gone from flip phones to the iPhone 6 in that time. Meanwhile, Time Warner is handing out the same horrible DVR set-top box it introduced in 2004 and charging more rent for it 10 years later.
We are only 30 years removed from the breakup of AT&T. No reasonable person could claim that we’ve forgotten the reasons why it was necessary — they can only claim that the lobbying and vast sums of money being spent to buy legislation is paving the way for this debacle to succeed. As Upton Sinclair said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
At precisely the same time, we’re faced with the real specter of a tiered Internet, which would be a huge win for the ISPs and the ISPs alone. There is no upside to a gated or tiered Internet for the consumer — there is only more money to be made by the ISPs, which are already enjoying substantial margins on publicly funded investments in their infrastructure. AT&T snapped up $100 million from the FCC recently and wants to deploy substandard service for that money in order to maximize the return.
The truth of the matter is that through the Universal Service Fund and other avenues, taxpayers have built substantial parts of the Internet’s infrastructures in the United States. These infrastructures are then sold back to us at exceptionally high margins and ever-increasing rates by companies with no fear of competition and no real regulation.
If that wasn’t enough, those same companies want to merge, then be allowed to control who does or does not reach their customers via the Internet. This would make them arguably the most powerful corporation in the United States. They could quite literally decide what companies succeed or fail simply by (legally) delaying or dropping packets, or demanding a massive extortion payment for access.
That is far worse than anything AT&T was capable of doing, and you can be certain there’s nothing like Bell Labs within Comcast or Time Warner Cable. No good can come from either situation if the companies get their way. At this point, if Comcast and Time Warner support an idea, that idea is bad for U.S. citizens, bar none.