StateScoop – January 26, 2017
Commentary: The chairman’s track record of opposition to equitable telecom policy could lead to fewer choices in the market and the upending of one of the internet’s most treasured aspects — but the fight’s not over yet.
Donald Trump picked his FCC chairman much earlier than anyone expected, though Ajit Pai is not a very big surprise. Formerly a lawyer for Verizon, Pai has been a constant voice in favor of large incumbent cable and telephone positions, especially opposing the Open Internet Order, known more commonly as network neutrality.
He has served on the FCC for four years, giving a strong sense of what his priorities are. In speaking to staff on his first day, he focused on the digital divide but offered few clues as to what he might be planning to improve access aside from cutting regulations — as though the only thing holding back the nation’s ISPs from offering high-quality lower-cost access in low-income neighborhoods was prohibitions against the practice.
Pai opposed efforts to help low-income families access the internet via the Lifeline program, advocating instead for a cap that would create a waiting list rather than covering all qualifying families. And more telling, he actually opposed efforts to rein in the ripoff charges in many prisons, where the incarcerated have to pay incredibly inflated rates to make phone calls. For those who don’t care if people in prison are ripped off, consider that the amount of contact a prisoner has with family is correlated with recidivism. That means you are paying higher taxes to house prisoners so CenturyLink and others can charge them a buck a minute or more to talk to their families.
Pai’s opposition to equity extends beyond individual programs and into the content of the internet itself. Pai has proven himself an opponent of net neutrality and said in December that its days are numbered under Trump.
To be fair, Pai has claimed at times to adhere to some net neutrality principles — such as no blocking of websites. But to be honest, he has also consistently argued that the FCC should not have the power to effectively enforce such rules.
The issue with Pai, and more broadly among the Republicans running the federal government these days, is that they believe the market for internet service works well. In fact, the party line seems to be that if there is a problem, it is the possible need for even more consolidation — AT&T buying Time Warner properties like HBO and CNN, for instance.
The belief is that if one provider engages in anti-consumer behavior, the market will correct it. It’s a great theory, but I’m not exactly sure where it gets the average American living in a large urban area. I live in St. Paul, Minnesota, and if I get annoyed at the Comcast bandwidth cap, my other option is a much slower CenturyLink DSL connection. I can say from my own infuriating personal experience with these providers that this “market” is not self-correcting.
Many claim that I have more options. Any number of think tanks that get checks from the big cable and telephone companies are happy to remind me that I could get even slower service from Verizon Wireless over LTE, though the cost of blowing through my monthly data cap would exceed my mortgage. Even statistics collected by the FCC or the NTIA support the view that my neighborhood is full of choices, but it’s an illusion. It’s just that there is a business corridor in my census block that has a few more choices, so “Hey, presto,” I too have more choices officially! But not really.
What are the real markers for whether the market is working? Try comparing the consumer satisfaction of the big cable companies to their profits.
Hypothesis: if the market is competitive, cable companies cannot have high profits when their customers hate them because their customers would switch to one of the many other choices in the market.
And the hypothesis is proved wrong: Comcast’s profit in one quarter of 2016 exceeded $2 billion and yet it was among the most hated companies in the country according to Consumer Reports rankings.
Some people are so frustrated with their options that they are starting to write four-figure checks to get better service. In Ammon, Idaho, some 70 percent of households in the city’s first municipal fiber zone decided to join, despite supposedly having lots of other service options. In Kitsap County, Washington, neighborhoods can petition for fiber service from the public utility district and the greatest demand is in the areas that already have cable and DSL service.
The market has spoken. The market is broken. But at the federal level, policy will be made more than ever by the biggest cable and telephone companies. We have a rough hand, but we aren’t powerless. To undo net neutrality, Pai’s FCC will have to take comments — and millions of people commented in favor of preserving net neutrality last time. Don’t miss that window. Pressure your elected officials — make them choose between the lobbyists and your vote.
In any given community, only one or two cable and telephone companies call the shots. They rule the state legislature. We need to support competition where it exists and create it where it doesn’t, which is what more than 450 communities are already doing with municipal investments across the country.
The battle for equitable broadband access and a free and open internet isn’t over just because the big cable and telephone companies again control Washington. We can win by building power at the local level.
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Commentary originally published on StateScoop.
