Democrats are taking cable and telecom companies to task over what many consumers have long bemoaned: rising prices and a lack of competition in the industry.
According to a broad economic agenda that Democratic leaders announced Monday in Berryville, Va., too few Americans have a choice among providers of high-speed Internet, and carriers are all too often content to keep it that way.
The critique of Internet providers comes as the Democratic Party seeks to overhaul its policy platform, shifting away from a defense of its traditional economic policies and toward a slightly more populist agenda, including stricter enforcement of antitrust laws and a push against corporate monopolies. In announcing the new approach — which they've dubbed “A Better Deal: Better Jobs, Better Wages, Better Future” — Democrats are signaling they will take a much tougher line on large corporate mergers that they say have contributed to higher prices and less consumer choice.
The proposal highlights massive acquisitions such as AT&T's $85 billion proposed takeover of Time Warner and how it could negatively affect consumers, arguing that whenever two companies wish to merge, they should have to persuade regulators not just that the deal won't harm competition but also that it will also be a positive force in Americans' lives.
It's unclear how the new policy would be put into practice, but the Democratic proposal suggests new merger review standards that would automatically block a deal unless “the merging firms could establish the benefits” of it. Regulators typically look only at a proposed deal's effects on pricing and the structure of a given market.
In another departure, the party's approach would require any merger review to consider the impact of customer data, the control of which can powerfully affect a company's dominance in an industry, Democrats say.
If enacted, many of these proposals could make it more difficult for companies to merge, but with Republicans in control of the legislative and executive branches, such legislation doesn't appear to be happening anytime soon.
More broadly, Democrats are banking on their renewed agenda to carry them to victory in the 2018 midterm elections. And with cable and telecommunications companies ranking near the bottom of consumer satisfaction surveys, it's no surprise to see Democrats lumping broadband providers with other unpopular industries of the moment, such as airlines and big banks.
Many Internet providers have been reluctant to build service out to rural or lower-income parts of the country, because they can't make enough of a profit from them. This has produced what's been called a “digital divide” between Internet haves and have-nots, with broadband access in the United States unequally distributed. Federal policymakers are discussing how to speed broadband deployment in hard-to-reach areas, and businesses such as Microsoft and SpaceX have proposed using new technologies, such as TV airwaves and low-orbiting satellites, to beam Internet to underserved areas more inexpensively.
But until those technologies come online — and perhaps even then — large, established players in the broadband industry will have enormous say over how Americans can get online and at what cost. A spokeswoman for USTelecom, a major trade association representing companies such as Verizon and AT&T, declined to comment Monday.
That's why Democrats looking for a comeback in 2018 are focusing so heavily on these types of industries.