Internet Access: Getting the U.S. Up To Speed (Episode 67)

Date: 7 Mar 2019 | posted in: Building Local Power, MuniNetworks, Podcast | 0 Facebooktwitterredditmail

Susan Crawford, Author

Host Christopher Mitchell speaks with Harvard Law Professor and broadband champion Susan Crawford about her book Fiber: The Coming Tech Revolution — And Why America Might Miss It. Christopher and Susan talk about bringing better connectivity to rural and urban areas.They also discuss:

  • What cities should be doing to get better Internet access including examples of places where local leaders are building fiber networks.
  • Reasons to be hopeful about the future of Internet access in the U.S., including bipartisan support for better connectivity.
  • How we can foster more competition in telecommunications. Susan explains why quality service will only come from an open access approach.
  • What the federal government can do to take action on broadband and policy recommendations that the executive branch can implement.
  • The transformative impact of treating Internet access like other utilities. Susan details the story of Tiffany Cooper who was able to gain high-quality connectivity while living in public housing and has seen major improvement in her son’s grades and her own employment opportunities as a result.

 

“What we need to do is to help people understand that the best interests of our country depend on reframing this entire issue. That this [Internet access] is not a luxury, that’s it’s basic to every form of business and every policy we care about.”

 

Lisa Gonzalez: Hey, Chris, read any good books lately?
Chris Mitchell: Oh, always. So many good books.
Lisa Gonzalez: Have you read any good books on fiber lately?
Chris Mitchell: I’ve read one good book on fiber lately.
Lisa Gonzalez: And who was the author of that book?
Chris Mitchell: Susan Crawford.
Lisa Gonzalez: Oh, I know her. In fact, she even mentions me in this interview that we’re gonna listen to on Building Local Power.
Chris Mitchell: Yes, the woman behind the scenes, who keeps things rolling, you finally got your moment in the sun. And well deserved, from Susan Crawford.
Lisa Gonzalez: Why thank you. And thank you, Susan.
Chris Mitchell: I know who Susan is, you know who Susan is. Can you describe Susan for our audience?
Lisa Gonzalez: Susan Crawford, in addition to being a professor at Harvard Law, and an author of Fiber: The Coming Tech Revolution and Why America Might Miss It, is one of America’s broadband champions. One of the most well-known broadband champions. And she’s gonna be the guest on this week’s Building Local Power Podcast.
Chris Mitchell: And she’s touring the country promoting that new book. I’ve read it. It’s wonderful. You’ve read it. Katie read it, Jess read it. We’ve all enjoyed it. It’s getting very good reviews. It’s selling hot. But we wanted to introduce the interview to make sure that people have a sense of all the concepts we’re gonna talk about. Because when I did the interview, I kind of forgot to do it for a general audience. I was doing it primarily for an audience that’s focused on broadband issues already. And we thought the interview was so good and made so many great points, we wanted to share it with this audience, also.
Lisa Gonzalez: Right, because we originally published the interview in the Community Broadband Bits Podcast, which is from the Community Broadband Networks Initiative at ILSR.
Chris Mitchell: Right, and we’re very much a community here.
Lisa Gonzalez: Yes. We certainly are.
Chris Mitchell: Community, community, community. So one of the things that we wanted to make sure people were familiar with is that Susan had written a previous book called Captured Audience, which was about the fact that most of the country has a cable monopoly as the best or only option for high quality Internet access in their area. And so it’s useful to know that. We’ll be making reference to that, effectively. But also that a number of urban areas are seeing some fiber to the home investment, which is the best broadband access you can get today. They’re seeing some of that rolled out by companies like AT&T and CenturyLink to kind of some parts of some neighborhoods scattered across cities. So there is this sense that some people, particularly in wealthier neighborhoods, are getting this higher-quality fiber optic service. But that it is not evenly distributed and we do not envision a future in which it would be evenly distributed just by market forces alone.
Lisa Gonzalez: And in this interview, Christopher and Susan get into why fiber is important. And not only to reach homes that have fiber to the home, but also because it’s gonna be used for wireless connectivity, for mobile connectivity, for 5G, which is mobile connectivity, but also for some of the more futuristic-type applications, which you hear a lot in the news such as Internet of Things and for connecting street lights and for connecting traffic lights, and all of those applications that we are trying to implement in order to just improve the quality of life in urban and rural areas.
Chris Mitchell: And one of the ways that Susan actually would like to see that rolled out, and makes a strong case that this would be the beneficial way, is that cities do dark fiber, which is obviously the opposite in some ways of lit fiber, not to be too obvious about it. But if a city like Chattanooga or Wilson builds a city-wide network and offers services directly, they’re putting fiber on the poles or in the ground, and then they are lighting it, which means you’re putting information across it. Dark fiber would be where a city basically puts fiber all around the community and then different companies would lease strands of it and they would light it themselves. So they’re not really getting a telecommunications service from the city, the city’s not really competing in a market of broadband, but it’s providing the infrastructure that would lower the cost for Internet service providers to be able to develop their products and offer service to any street corner, any home, or anything like that.
Lisa Gonzalez: And in some of the communities that Christopher and Susan talk about, including Wilson and Chattanooga, and Lafayette, those communities do actually offer those services directly to the general public. They do that through their utilities.
Chris Mitchell: So if I’m like, “Hey, Lisa, I have a problem. My Internet’s down.” I don’t call Comcast. Lisa, you would tell me, “Well, call the electric plant board.”
Lisa Gonzalez: Yes. Like LUS Fiber in Lafayette, or EBP Fiber in Chattanooga, or Green Light Community Network in Wilson.
Chris Mitchell: Right. And so these are actual companies that compete with AT&T, Comcast, Time Warner, used to be Time Warner, Charter Spectrum now. They are providing the services as a municipality. They’re offering telephone, television, and Internet service. Just like a big company like Comcast. Except those cities do it at a reasonable price and with good customer service.
Lisa Gonzalez: Right. And you don’t have all sorts of gimmicky prices and things like that.
Chris Mitchell: Yeah, they keep it pretty transparent.
Lisa Gonzalez: In comparison to something like an open access fiber network, which Christopher and Susan also talk about. That’s when the city owns the infrastructure and they invite competing ISPs to offer services over the infrastructure.
Chris Mitchell: That’s right. And it’s a really exciting model that is growing and I think has tremendous potential. Particularly where cities don’t want to get involved in that day-to-day marketing battle with a big company like a Comcast.
Lisa Gonzalez: And we’re seeing more communities, especially regional networks, start to build those.
Chris Mitchell: And the final point in your educational lesson before this interview with Susan Crawford is that many rural areas are getting these very high quality fiber networks being deployed by cooperatives. In some cases, that’s telephone cooperatives, and in other cases it’s electric cooperatives that have started offering services. And in a very few number of isolated cases so far, there’s new cooperatives that are offering broadband service. So we just talk off hand about how rural areas are getting better service, but that’s what we’re referencing.
Lisa Gonzalez: So all in all, it’s a pretty interesting interview and we do recommend the book. Because Susan explains a lot of these things, and she does it in a much more interesting way than we do just sitting here talking about it.
Chris Mitchell: Right. In fact, if you’ve read the book and you’re sitting there rolling your eyes, then here’s the interview. You’ll enjoy this part a lot better.

I’m Chris Mitchell with the Institute for Local Self-Reliance in Minneapolis, and I have one of my favorite guests back today, Susan Crawford, a professor at Harvard Law and more recently the author of Fiber: The Coming Tech Revolution and Why America Might Miss It. Welcome to the show, Susan.

Susan Crawford: Well, it’s an honor to be here, Chris. This is really your movement, all I’m doing is writing it down.
Chris Mitchell: Well, you have supercharged it and I am eternally grateful for you doing that. Do you differentiate between rural and urban Internet access problems?
Susan Crawford: Well, problems, yes. But solutions, no. I don’t see any reason why people living in rural areas should have second-class access. And it’s just a policy decision. We did that as a country for telephone systems and for electricity and it should be the same for the basic communications network. So when we get to the end of this policy road, everybody should have ubiquitous, mostly fiber if not exclusively fiber, cheap, persistent, reliable connectivity in their homes and businesses wherever you are in America.
Chris Mitchell: I think, I entirely agree with you. And one of the things that I like about your analysis is the focus on fiber. And I think that’s important for several reasons that you and I agree on. But since the last time we’ve talked, the cable companies are on a path to do DOCSYS Symmetrical, where it looks like they’ll be able to offer very high quality, symmetrical, very fast speeds. And so I’m curious, then, if you would think that the urban problem is kind of solved?
Susan Crawford: Actually not. First, at what price is really important. How much are people having to pay for this service? Because it looks to me as if the entire country is paying rent to about four or five companies that are doing extremely well. So that’s one issue that remains for urban areas. At what cost? And how many people are left out of that great network connectivity because they simply can’t afford it?

And the second point is that, yes, that looks good as an upgrade to their existing capacity, but unlike hybrid fiber-coaxial lines, the glass fiber really is, as far as we can tell, infinitely upgradeable. There is a top limit to what you can do with those cable capacity that we’ll not approach what’s possible with fiber. So the two technologies are just not the same. And the idea of making sure that we’re matching the rest of the world with our basic wire makes a ton of sense to me. And it does to most people in these other countries that I keep visiting. So long story short, that is not a solution if it’s too expensive and not upgradeable without extraordinary effort.

Chris Mitchell: And so then I feel like we’re actually left in a situation in which, as you say, rural areas have second-class service. They should not into the future. But given your analysis of the cable monopoly, it strikes me that we’re moving into an era in which, over time, more rural areas will actually have the first-class service and people like me in a cable monopoly area in an urban region will have second-class service in some ways.
Susan Crawford: I think that’s right. And I think that sets up some terrific incentives for people in the urban areas to be even more interested in the idea of a public option or a wholesale network or a dark air conduit available to lots of competing fiber providers in every city, or dark fiber available for lease. Something that is a wholesale version of a public option that is available to everybody at a reasonable price. So the retail market emerges in those urban areas.

Look, nobody wants to see cable not competing, except for the cable companies. So I’m happy for them to be successful businesses, but they have to be subject to competition like everybody else.

Chris Mitchell: Now I think the final step of this, walking through this analysis, is that in some areas, and I would be very clear, in fact in some ways, some parts of some neighborhoods in urban areas are seeing fiber investment from AT&T, from CenturyLink, from some other of the telephone companies. And so where we see that, you’ve just mentioned creating an open market. Why isn’t that competition between like AT&T and CenturyLink fiber good enough for a first-class city? In this case, a first-class city?
Susan Crawford: Again, because of the switching costs. There’s a huge lock-in effect when you sign up for any one of these operators. It’s very difficult to move to a competitor. And that’s a problem, because over time the company that has you locked in can just steadily raise prices and you’ll feel helpless to do anything about it. So as a matter of public policy and just respect for human ingenuity, we should make sure that that competition is real, not just temporary and fake.
Chris Mitchell: Okay. So now that we’ve gotten there, what is the argument that you’ve made in the book in terms of what cities should be doing? Because I think it’s clear, we celebrate Chattanooga and Lafayette and Wilson, and they’re champions in the book. You tell great stories about them. And yet if you’re advising a city, you’re not advising them to go down that particular path.
Susan Crawford: Right. And so many of these cities that are heroes now have depended on their existing municipal electric utilities as a first step towards bringing fiber. And that can’t be necessary because there are only a few thousand cities in the United States that have a municipal electric facility available. So there has to be a broader plan. So what we’re all advocating for, Christopher, and I think you more effectively than anybody else in the country, is taking stock of local realities with a broad cross section of the community…. making sure that civic officials and the business community and residents and local government all understand the opportunity that they’re missing by not figuring out what to do about their fiber situation. Then getting in help to do a feasibility study about what might be possible there, and then moving ahead with political leadership at the political level. It’s all about lowering the cost of capital ultimately because it’s not rocket science to build these networks, but it is about lowering the cost of capital and getting sterling leadership in place and supporting that leadership to move forward.

Increasingly, I’m excited about regional opportunities, not just municipal ones. Watching what’s going on in the South Bay just south of Los Angeles, where a whole bunch of communities are talking about getting together and issuing a joint RFP for dark fiber services. That makes a lot of sense to me. There are ongoing economies of scale that operate at the public level, just the same way they do at the private one. But the first step is getting everybody together, having a real consensus that this is important, and then taking the necessary block and tackle steps to figure out what needs to be done, what the gaps are, where the capital will come from, and what the plan is.

Chris Mitchell: I’m curious, what gives you hope that we’re gonna see more of these approaches and more of these regional collaborations, as opposed to this just being a footnote over a period in which we’ll muddle along for many more years.
Susan Crawford: Well, MuniNetworks.org gives me hope because every day you’re putting out stories of different places working on this and learning from each other. This is such a terrific community of people learning from past mistakes, making things work better, becoming increasingly professional in their approach to these networks. And Americans at their best are never cynical. What also gives me hope is that this is such a thoroughly bipartisan movement across the country. So many of these areas working on fiber are Republicans or labeled that way, as well as Democratic. And that everybody once they understand this issue deeply enough is moved to do something about it.

So far, every conversation I’ve had, let’s say with my dry cleaner or the local music store or anybody on the street, once you take the time to explain it, they just say, “Well of course that’s the way things should be. Why aren’t they?” And Americans don’t like to be behind, and we are so behind the rest of the world. So, I’m optimistic because of the American character. I’m very proud of being American. And I know that we want to get this right, and we won’t be frustrated by a few companies doing it.

Chris Mitchell: Well, I really appreciate that. I know that Lisa will too. My son is now three years old, so I know that Lisa has done almost all of the work on MuniNetworks.org for the past three years because that’s when I handed it off. Since then, I still get the credit, but she does all the work.
Susan Crawford: Yay Lisa. Yay.
Chris Mitchell: One of the things that you just said actually reminded me of a conversation I just had in North Carolina with a small business owner who has CenturyLink Fiber. We were commiserating because I also have CenturyLink Fiber in our office now. In my experience, 100 megabit symmetrical service is amazing. He has not had as good of a result, and we both agreed that the voiceover IP that CenturyLink uses is just awful. I mean, I frequently can’t complete calls. I have all kinds of problems with it. That’s just a reminder of something we were talking about earlier in terms of just one fiber line is not enough.
Susan Crawford: Right. Quality of service will only come from competition. The only way that Telco or communications competition has ever emerged is requiring structural separation between a wholesale operator or the dark fiber or dark air part of this, and the retail services. As soon as people are allowed to choose hats or wear multiple hats, they start carving up markets and discriminating against others and making sure that they don’t have to invest any more capital than they need to. So, I think what we’re driving at with this idea of dark fiber, dark air, wholesale networks is encouraging investment in tremendously useful facilities for all Americans. That will mean great persistent voiceover IP, as well as very high capacity data services that I hope someday we will simply take for granted.
Chris Mitchell: I’m curious who you aimed the book at when you were writing it. In part, I have to say, the timing is almost miraculous in that it came out in January and here we are at the beginning of February, and I think we’re starting to see the media finally catching on to the fact that a lot of the 5G hype was bait-and-switch, and you lay that out in the book. When I was reading it, I was thinking it might go over the heads of a number of people, but increasingly I think it was just right for certain kinds of people. But I’m curious who you were aiming at.
Susan Crawford: I was aiming it at anybody who is curious and reads a newspaper. It’s very approachable as a book. It really tries to tell the story in very human terms and get everybody all excited about the capacity of fiber. So, I was writing it for any small business owner, householder, trying to make this as … It should be a pedestrian subject frankly, and it has seemed technical and far away, but that’s because that’s the way it’s been framed by the incumbents. Actually it’s very sensible. So, that was my audience. Everybody is my audience.
Chris Mitchell: Your first book, Captured, came out, and the cable companies had a plan to try and ruin you. They attacked you relentlessly. One of the things I remember is they had, on the day it was published, multiple one-star reviews on Amazon. Now I think they’re just desperately trying to ignore you and hoping that no one notices you. Is that your impression?
Susan Crawford: I think that’s true. I’m still seeing a little bit. I have a particular detractor funded by Comcast who is always putting comments on Facebook and Amazon, so he’s still out there. But I think their goal right now is just to make sure this goes away. What I’m hoping is that it won’t. I’m doing my best to get into mainstream news outlets, whatever I can do to keep pushing this story along.
Chris Mitchell: Well, I went to, for an employee of the Institute for Local Self-Reliance’s great extremes. I wrote a review on Amazon.
Susan Crawford: Thank you.
Chris Mitchell: And I really hope that other people will too, even if they are also scared of Amazon because Amazon remains one of the key places people turn to to look for reviews. So, I hope people that have read the book or who are about to read the book will do a review on Amazon, even though I hope you buy the book somewhere else.
Susan Crawford: Oh, I appreciate that. And yes, I support independent bookstores and I want people to buy it there. I should do a better job of urging people to write reviews on Amazon. I just don’t. In part, I feel my role is just to write the book and then everybody else will do what they want to with it. Other authors are more active in promotion, and this is just a failing of mine not to get an army writing about it. But I appreciate the plug and I hope that does happen.
Chris Mitchell: Well, I did notice that you don’t start off every answer to a question with, “As I say in my book.”
Susan Crawford: No, I don’t do that, and I really should.
Chris Mitchell: I am totally on board, as anyone knows who’s listened to us, with our arguments that local leaders are the ones that have to step up. You make that case very compellingly, but I’m curious because you have worked in the executive branch for President Obama. When you think about this, my impression is that the Obama administration in the last two years tried to figure out any way the executive branch could encourage these types of networks, and more or less came to the conclusion that they just don’t have much authority or power to do so. If we had a president right now that was both competent and willing to take action on this, do you think there’s anything that the executive branch can do today?
Susan Crawford: Oh, absolutely, and in fact in the last chapter of my book, I make a lot of these recommendations. Setting a standard for what constitutes the basic telecom service in the United States, that’s the role of the executive branch, and having a lot of tax and loan guarantee and subsidization programs depend from that definition, would be extremely helpful. For example, operators still running copper lines across the country could be essentially forced through tax policy to abandon those lines and replace them with fiber, and with wholesale fiber, by the way. Operators in particular regions could be given loan guarantees by The Fed, which operates regionally, to lower their cost of capital there, and increase and incentivize the deployment of wholesale networks. Gosh, we could just make another Tennessee Valley Authority operation exist in rural areas that would be a wholesale provider of transmission services with connections only to publicly operated or publicly supervised glass mile networks.

There are all kinds of things the federal government could do, but setting the standard and declaring that this is a priority of the United States would be a very first step, and that the Obama administration did not do.

Chris Mitchell: That’s a very good answer. I did not see that coming, even though I read the last chapter. I think I was, as I noted, I was so euphoric for some of the stuff that came right before then in the local stories. I want to note something that some of the people who listen to this show are more of a fan of cooperatives and that sort of approach than municipal networks. There is some animosity between them. When you say the kind of authority that might do the wholesale access, I assume you’re including the cooperatives as a major component of that.
Susan Crawford: Oh, absolutely, and I’m also harking back to what happened at the time of the formation of the TVA, that its policy was to make business arrangements only with cooperatives and municipals, so a definite bias in favor of these alternative modes of getting basic network connectivity out to people in rural areas.
Chris Mitchell: There’s a line that I read from a 1950’s political science paper about the meeting where that decision was made. Harold Ickes, who was a person I actually have, I don’t know it’s like 2500 pages of diary for him that was published that I want to read that I haven’t gotten around to yet. But apparently in one of the early meetings about rural electrification, they were trying to figure out how to make it work. One of his people on the committee said, “Well we’re gonna have to work with the electric trusts.” And Harold Ickes said something along the lines of, “I won’t have it. We’re not gonna talk to those sons of,” we have a clean tag, so I’m not gonna finish that off. And he said, “We’re gonna find another way.” As you said, they focused on the cooperatives and the munis, and I think we’ve said probably trillions of dollars in rents because of that.
Susan Crawford: I think that’s right. It takes character to do that because in the current American context, that sounds like heresy. What? Not have the private sector do absolutely everything? I’m not saying that public-private partnerships couldn’t work, but they would be the public in charge and the private operator as a vendor essentially helping with construction or operation of networks, but at the behest and under the control of the public entity or the cooperative.
Chris Mitchell: Now, I want to talk about Greensboro, North Carolina because I think Greensboro makes this book work so much better than if you had excluded it. In this book, you talk so much about the great things that Wilson has done, RS Fiber with Mark Erickson and the many people that made that possible. You talk about Mynet and we actually just interviewed Don Patton recently, using some of the material from the book. You talk about Chattanooga. You talk about so many that where there’s great things happening. Greensboro, you actually mention that you read it just after reading George Packer’s The Unwinding, which is a fantastic book. Why is Greensboro important for your argument?
Susan Crawford: Greensboro is important because I went to Greensboro expecting to find this scrappy spunky North Carolinian we can do anything attitude about fiber as well as everything else. And what I found was not that.

What I found was that Greensboro was sort of sinking into genteel irrelevance in a state that is booming really. Greensboro hasn’t really gotten over its past of excluding poor and Black people from the civic life, it was my finding, and can’t really see its way past its current Internet access situation, too. These things are really of a piece, so the reason why Greensboro is so important to the narrative is that the overall story here is that places that can think about fiber as part of the decent respectable life, just a basic affordance, can also think about treating everybody with respect and making sure that the entire community is thriving. That’s more and more true in places like Wilson, but it is not yet true in Greensboro. They haven’t made that turn. It’s still suffering from the past and kind of convinced that it’s important just because it’s Greensboro.

What I’ve found was that, although there’s some champions in Greensboro, they’re not gaining any traction because the local government isn’t really interested in fixing the Internet access situation which is dominated utterly by Spectrum and there doesn’t seem to be much will for overcoming this somnolence, really the sleepiness of the city’s business approach. That’s why it’s important. It was in contrast to these other places.

Chris Mitchell: Right. For me, it was such a reminder of the importance of true local leadership, not just someone who’s willing to say, “Yeah, that’s nice.”
Susan Crawford: Right, exactly. Yeah, they would sort of wave their hands at it and then not do anything. There are great people there and I hope they see that I respected what I was up to when I wrote the book, but that I could also see that nothing was going to happen. That it was sort of a plan towards a procedure towards a process without any real leadership behind it.
Chris Mitchell: Right. Well, one of the things that I felt a little bit shown up on is the story you tell about Tiffany Cooper, because it’s so great. It just so illustrates why Wilson’s municipal broadband network in North Carolina, on the eastern part of North Carolina, which we’ve talked about many times in this show because they’re so path breaking. Her story is just a reminder that talking about low income households isn’t just sort of a policy issue, it’s real people’s lives. I’m curious if you want to tell us a little bit about her.
Susan Crawford: Oh, I’d be delighted to, and I also hope people will buy the book. I know I need to start plugging. I’m delighted to tell the story because it’s an important centerpiece here and it’s so moving. I just about burst into tears when she said it. I went to visit Tiffany Cooper who is a young mom of three sons living in public housing in Wilson. She told me that being able to add $10 to her rent bill in public housing and have that result in a terrific fiber connection from the city of Wilson was the best thing that had ever happened to her, and that she hoped it would happen to everybody else in this country. She said a funny thing. She said, “Whoever came up with this idea? This was genius,” essentially.

What she was really excited about was that her sons grades were improving because they could do their homework from home. She can’t get them to the library. She has no ability to drive anywhere and public transit in Wilson isn’t great. She knows that they are doing better and really focusing on grades because of the network’s presence in her home. She’s also getting new training, medical certification, for new sorts of jobs by having this fiber connection right there.

Whenever I tell this story across the country, people just gasp. Of course you should be able to just treat this like a utility and pay an affordable amount and have it present wherever you are, in public housing, expensive houses, wherever. Wilson really saw this through and they said, “Look, we’ve got this network cost going to public housing. We’re going to make this available to people in multi-dwelling units in public housing across the city, and we’re very proud of it.” It’s one of my proudest moments in this book was being able to report that, and then have other people from other cities just gasp when they hear this story.

Chris Mitchell: It’s a great story. I’ll note that there are many similar moments like that in the book. I wrote two case studies with Todd O’Boyle, who’s a Wilson native, about how Wilson built their network and then how Time Warner Cable fought back in the legislature. As I entered those parts of the book I was thinking, “Well, I’m going to know all this.” There was details in there I wasn’t aware of. If you found things that surprised me, anyone who picks this book up is going to find interesting things they did not know.
Susan Crawford: Yeah. Thank you for that nice compliment. What’s particularly great about the Wilson part of the story is that they were willing to talk about the shenanigans with Time Warner Cable in getting the state law passed, and talk about them in detail. I don’t think that’s been on the record before. We all sort of know it, but it’s great to have it written down and important for us as we attack this issue across the country.
Chris Mitchell: I think that’s right, and I mean, I know that’s right. I was trying to get into this point, which is that I think one of the challenges is many of us are bitter about the way in particular Republican state legislators, but sometimes Democrats, have accepted the arguments from the industry. I think whenever we talk about that we use language that is guaranteed to antagonize half of the people thinking about politics in the US. When I’m trying to talk to people in North Carolina, and particular in legislators, I have to remember that I think a number of those Republicans who voted for those bills are now angry at Time Warner Cable. They might not say so publicly. I think we might think they should’ve known better at the time, but they did think that the private sector would do better than it has.
Susan Crawford: That’s right. We should always assume positive intent on everybody’s part, even on the part of the companies because, good lord, we haven’t restrained them. We haven’t given them any reason to act differently coming from the rule of law, right? Everybody’s acting according to their best interests. What we need to do is help people understand that the best interests of the country, and of our place on the global stage, and our ability to act coherently, and with respect towards everybody depend on reframing this entire issue. That this is not a luxury, that it’s not something that only rich people should have, that it’s basic to every form of business and every policy we care about. That reframing is just beginning to come into view, and whatever we can do to push that along is our job, I think, on Earth right now.
Chris Mitchell: As we wrap up, I want to ask you about a phrase that you used on the Diane Rehm Show, which is one of my favorite phrases. It’s a deep history behind it, but I wasn’t sure that everyone would’ve caught it, and that is ruinous competition. I’m sure you used that for a specific reason. Tell me about that phrase.
Susan Crawford: All of these businesses that seem to us today like ATMs with lawyers on top, like oil or communications, and sometimes-
Chris Mitchell: Electric companies.
Susan Crawford: … even banking. Electric companies. They have very high upfront costs to set up these initial networks, and so it is in the interest of the companies eventually to divide up markets. To say, “You take Minneapolis, I’ll take Sacramento.” Because if they start actually competing with each other, they’ll just run each other out of business. That’s what’s known as ruinous competition. There’s a long history of the use of that phrase in the railroad industry around the turn of the last century, and in oil. It’s only rational to have pricing power, to have control over entire markets, and that’s what’s happened with telecommunication. We can’t allow that to happen.

This is essentially a natural monopoly service. It only makes sense to have one wire connection going to homes and businesses, and that wire should be fiber. The way to create competition, we’ve known for a hundred years, is to make sure that that facility is shared and shared according to really clear rules that keep the operator of the wholesale facility from having any incentive to pick and choose retail providers. That’s where we need to get, and the problem is that absent any restraint from law or oversight, these companies and legislators, everybody will act in their own self interest to keep the status quo in place.

Chris Mitchell: Let me add onto that just briefly and see, and you can tell me that you think that I’m wrong. My way of thinking has shifted over the past 10 years. In part because of where we are, and also in part because of economic theory. If I could wave a magic wand and have a publicly owned or cooperatively owned fiber to everyone’s home and ban all other forms of access that would compete with that, I would not do that. That’s because I think it is important, even though I think it might be inefficient in some economic analyses, I think it is good to have a little bit of infrastructure competition to keep the owner honest. Even my thought is the local ownership and accountability provides the best opportunity for that in itself, but also having a competing provider, I think, creates the right incentives and if at least one of those pipes has to be open in the way that you envision to multiple providers. What do you think of that?
Susan Crawford: Yeah, and I do disagree because we’ve seen this over and over again. If we believe in intermodal competition, which is what we did when we deregulated the telecom world, that we thought these wires would fight it out with themselves and that would protect consumers. Inevitably there’s consolidation and they buy each other out and then you’re left with a monopoly and no oversight, so you get the worst of both worlds. Actually, I think the competition comes from benchmarking wholesale providers against each other. This is the way Japan does it, so there’s NTT East and NTT West. You have to keep prices down coming from that wholesale provider. Then a genuine retail marketplace does emerge on top of that wire, and that is the way it should work. Because otherwise you just have private equity buying out competing networks and consolidating markets.
Chris Mitchell: Well, I think this has been one of the best interviews we’ve had. I love all the different topics we got into, and I really hope that people appreciate it and they go out and buy your book. Thank you so much, Susan.
Susan Crawford: Thank you, Christopher. Talk to you later.
Lisa Gonzalez: Thank you, everyone, for tuning into this episode of Building Local Power. You can find links to what we discussed today by going to our website.
Chris Mitchell: Oh, I know that. ILSR.org.
Lisa Gonzalez: Very good, Chris, and clicking on the show page for this episode. That’s ILSR.org.
Chris Mitchell: Hey, I thought I was going to do that part.
Lisa Gonzalez: While you’re there you can sign up for one of our newsletters.
Chris Mitchell: The community broadband network’s newsletter is the best.
Lisa Gonzalez: I agree. Connect with us on Facebook and Twitter. If you like this podcast, please consider sharing it with your friends and leaving us a rating on iTunes or wherever you get your podcasts.
Chris Mitchell: Actually, let’s just say, “Leave us a rating,” because that’s the part we’d really like right now.
Lisa Gonzalez: A 10.
Chris Mitchell: I think it’s out of five.
Lisa Gonzalez: A 10. This show is edited by myself, Lisa Gonzalez-
Chris Mitchell: Lisa Gonzalez.
Lisa Gonzalez: …and produced by me, along with Hibba Meraay and Zack Freed.
Chris Mitchell: Hey, Hibba and Zack, sorry you have to put up with me.
Lisa Gonzalez: I feel sorry for you, too. Our theme music is Funk Interlude by Dysfunction Al. For the Institute for Local Self Reliance, I’m Lisa Gonzalez. I hope you join us again in two weeks for the next episode of Building Local Power.
Chris Mitchell: We demand that you join us again in two weeks. Thank you, everyone.

 

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

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Hibba Meraay
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Hibba Meraay

Hibba Meraay manages communications for the Institute for Local Self-Reliance. She works closely with all of our initiatives to build community power and combat monopolies. A native New Englander, Hibba is a graduate of Boston University. Contact Hibba for media inquiries.