Why are cable and wireless bills so high?
One theory: The smartphone-toting nation is returning to a phone monopoly, and that’s not just frustrating — it may set us back as a global economic power.
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That’s the argument put forth by Susan Crawford, a former telecom and tech policy adviser to President Obama who is among the cable and phone industry’s biggest agitators.
Her new and controversial book, “Captive Audience: The Telecom Industry and Monopoly Power in the Gilded Age,” is a harsh critique of regulatory decisions at the Federal Communications Commission that have led to sweeping consolidation. Most U.S. consumers have the pick of only one or two broadband Internet service providers, while other countries are offering their citizens faster speeds at lower prices.
How did we get here? Crawford chronicles key victories by deep-pocketed cable and phone companies that have vigorously and successfully persuaded federal regulators to approve mergers and shed rules for their industries.
She focuses on Comcast’s takeover of NBC Universal, a deal that created a media and telecom juggernaut. Comcast has argued that it consistently offers faster speeds for its 22 million cable subscribers. It has also launched a $10 service to help expand broadband access in poor areas.
Crawford is a controversial figure in tech policy circles. She’s called for comprehensive regulation of the industry, saying Internet service providers should be treated like utilities such as power and water.
She has many supporters among public interest groups, Silicon Valley firms and academics who have called for the FCC to work harder to resist mergers and put stronger rules on companies to usher in new competitors.
Crawford took time recently to discuss her book. Here’s an edited version of our conversation:
As you see it, the country that invented the Internet suffers from too many bottlenecks in the pipelines that provide access. How did this happen?
Years of enormous consolidation have left Americans paying more for second-class service, and a lot of Americans are being left out altogether because service is too expensive.
At the beginning of the 2000s, we assumed the cable modem for Internet access, DSL, telephone, high-speed Internet access and wireless would all be competing with one another and that competition would protect Americans. So we, the FCC, said there was no need for regulation. Those assumptions turned out to be wrong.
What happened?
On the wired side, it turned out to be much cheaper to update the electronics for the cable system to bond together a few TV channels for very fast download speeds. That was much cheaper than to dig up copper wire — which can’t compete with cable — and replace it with fiber. So telephone companies backed off and ceded the field to cable companies.
You focus your book on the Comcast merger with NBC Universal. Why was this such an important deal and its approval such a crucial mistake by regulators?
Anyone trying to build fiber in competition with Comcast has to enter two markets at once: programming and infrastructure.
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