Experts Fear Biden Broadband Plan Won't Fix The Real Problem: Monopolization

from the do not pass go, do not collect $200 dept

We’ve already noted how the Biden broadband plan is good, but arguably vague. As in, the outline proclaims that the government will boost competition and lower prices, but it doesn’t actually get at all specific about how it actually hopes to do that. There are some promising aspects, like a pledge to embrace the growing wave of grass roots community broadband efforts popping up around the country, but again, it’s not clear how that’s going to happen. For example there are 17 state laws (usually written by telecom lobbyists) prohibiting such efforts, and federal efforts to shoot down those protectionists laws haven’t gone well.

The original Biden broadband plan promised to take $100 billion (from a total of $2.3 trillion in infrastructure funding) to ?revitalize America?s digital infrastructure” and “bring affordable, reliable, high-speed broadband to every American.” But experts like Victor Pickard and David Elliot Berman at the University of Pennsylvania argue that the plan likely doesn’t really go far enough. In part because it doesn’t really strike at the heart of the issue. Namely, regional telecom monopolization:

“it remains to be seen how the government will confront the broadband industry?s entrenched market power. Behemoths like Comcast and Verizon exert immense control over the Internet?s last-mile infrastructure. During the pandemic, these corporations have further tightened their grip, forcing hard-hit communities to plead with these giants for a modicum of reprieve from their exorbitant monthly subscription fees. As a recent damning Free Press report shows, these ISPs are enjoying record profits as they increase prices to their customers and reduce investments in their infrastructure. For instance, in Philadelphia?home to Comcast?s global headquarters?students living in low-income neighborhoods often lack the high-speed Internet connection they need to learn remotely. Meanwhile, Comcast?s profits are soaring.”

There’s no shortage of organizations and experts arguing that publicly-owned broadband is a major part of any broadband solution, and whereas past administrations demonized such concepts to a comical degree, the Biden team at least recognizes the importance of the concept. Still, while some 750 towns and cities have explored some variant of community owned broadband out of frustration with market failure, federal-level publicly-owned broadband as a concept remains a political non-starter in the US, and lobbyists are working hard to ensure any funding doesn’t go to piecemeal community-based efforts either.

The primary solution for broadband gaps in the US is to throw a parade of subsidies at the problem. But such efforts don’t help if that money doesn’t wind up where it needs to go. And it often doesn’t wind up where it needs to go thanks to intentionally terrible maps and a broken subsidization process (fixes for both seeming perpetually around the next corner). Such problems persist thanks to the rampant corruption of state and federal government officials. So if you don’t fix the corruption and the monopolization, you don’t fix the underlying causes of US telecom dysfunction.

For Pickard and Berman the answer, in part, lies in increasingly treating broadband like an essential public (and publicly owned) resource on a much broader scale, an argument the pandemic added a lot of fuel to:

“Public ownership and governance of the Internet?the development of which was funded by the public ?is essential as we look at the Biden plan and beyond. From ordinary people posting instructional cooking videos on YouTube to volunteers updating Wikipedia entries, our collective labor is what makes the Internet valuable. The Internet is our commonwealth, not the plaything of Comcast and Verizon. It?s a public good that yields tremendous positive externalities to all of society. Yet time and again, corporate ISPs have proven to be poor stewards of this public good.”

Of course getting from here to there is a pretty steep uphill climb. But even less aggressive options, like Biden’s $100 billion broadband plan, is having trouble making it through the lobbying gauntlet. The plan is already slowly shrinking in scope in a bid to appease to politicians in thrall to telecom monopolies (read: a majority of Congress, and the near-entirety of the GOP). And for all of its talk about the essential nature of broadband during the pandemic, the Biden team still hasn’t even gotten around to fully staffing the FCC yet, much less restoring any of the consumer protection authority stripped away by the Trump administration.

Fixing US broadband is going to require some extremely bold decision making that will almost certainly piss off AT&T, Comcast, Verizon, and other entrenched regional monopolies. And despite some promising rhetoric, it remains utterly unclear if anybody in DC actually has the backbone required to do so.

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Comments on “Experts Fear Biden Broadband Plan Won't Fix The Real Problem: Monopolization”

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28 Comments
united9198says:

Hmmm. I live in a somewhat rural area and we have several co-ops that provided telephone and internet. I am a customer of one of them. In every case, they are more innovative and quicker to offer improved technologies…..at a lower price than the big guys. The ONLY way to lower prices is to increase competition from smaller players who cannot be gobbled up by the big guys, and co-ops are the way to go because they are owned by the subscribers.

Samuel Abramsays:

Re: Re:

The ONLY way to lower prices is to increase competition from smaller players who cannot be gobbled up by the big guys, and co-ops are the way to go because they are owned by the subscribers.

I completely agree with this approach. It’s just that far too many states have?due to the bribery, erm, "lobbying" of the Telecoms?banned this approach from ever taking place. Like I said, I think community broadband and local independent ISPs should be done more often! It’s just that the Telecom monopolists have rigged the game.

Anonymoussays:

Re: Re: Re: Re:

Most of the protectionist legislation linked to on Tech Dirt actually only prohibits city councils from setting up and investing in such systems. They don’t seem to prevent the residents of a community coming together to set a telecoms co-op independently of the city.
And once it exists it can, of course, lobby the city for a sweetheart deal to access public infrastructure (eg roads), just like the monopolists. They could also lobby the city for a contract to provide services to the city as soon as the fibre has been laid.

Davesays:

Re: Re: Re: Re: Re: Re:

And once it exists it can, of course, lobby the city for a sweetheart deal to access public infrastructure (eg roads), just like the monopolists. They could also lobby the city for a contract to provide services to the city as soon as the fibre has been laid.

The problem here is that most of the time, the monopolist telecoms have already paid for exclusive use of such infrastructure.

Scary Devil Monasterysays:

Re: Re:

"…and co-ops are the way to go because they are owned by the subscribers."

Yeah. It’s possible as long as the co-op is in a market none of the major providers actually want. If it was a major town this concerned the lobbying would have killed any idea of a co-op or municipal broadband provider in favor of keeping the local monopoly afloat.

At scale what you need is regulation. For smaller areas a lot of other options exist.

Anonymoussays:

Re: Re: Re: Re:

Go look. Your rules are unnecessary… I’m not talking about sewer service or whatever.

There are places in the US where people do have a choice of internet service. Where this exists, prices are cheaper. I didn’t cite because it didn’t seem necessary. Examples abound.

Hell, sometimes the mere threat of overbuilding lowers prices.

Anonymoussays:

Re: Re: Re: Re: Re: Re:

Most of the places in the US where there is a choice between 2 ISP’s arose from the existence of non competing cable and phone networks; it used to be that people subscribed to both networks.. Convergence on digital technology resulted in both networks being able to provide broadband; people only subscribe to one of them, most often that is cable. The result is the trend is for the phone companies to abandon their fixed line networks, leaving behind a cable monopoly.

Fixed and mobile can exist together they meet different needs. Mobile is competitive, because it serves mobile users who expect the service to be available wherever they happen to go; and that has prevented local monopolies in the provision of mobile service..

sumgaisays:

Re: Re: Re:2 Re: Re: Re: Re:

Mobile is competitive….

Voted most funny of the week!

… because it serves mobile users who expect the service to be available wherever they happen to go….

Which is why fixed service has effectively dried up and blown away. It’s that very concept of convenience (no matter where a person is in geographical relation to the planet) that fixed can’t provide, thus…. QED.

… and that has prevented local monopolies in the provision of mobile service..

Perhaps you aren’t aware of who owns who in the Mobile Telecomm field, eh? Hint: only three (big) companies are in play, and they own absolutely all of the little guys – sometimes openly, sometimes not. Rest assured, they’re all in cahoots when it comes to acting like competitors, but in reality they exhibit every characteristic of an oligarchy. (Meaning in this case, a few very rich companies are putting on a good show for the public, and laughing up their collective sleeve all the way to the bank.)

Rockysays:

Re: Re: Re:2 Re: Re: Re: Re:

Fixed and mobile can exist together they meet different needs. Mobile is competitive, because it serves mobile users who expect the service to be available wherever they happen to go; and that has prevented local monopolies in the provision of mobile service..

How do you think your mobile internet is connected to the internet? Depending on where your cell-tower is located it can itself be connected to the internet through fiber, otherwise your connection well be routed through a couple of cell-towers by microwave until it gets to one connected to a fiber.

Mobile internet can’t be competitive without fiber, and if there’s not enough fiber to go around, your mobile internet won’t be particularly competitive.

Rockysays:

Re: Re: Re: Re:

The cost of not overbuilding is way higher than actually overbuilding. The economic concept is quite easy to understand:

  • If you need to upgrade your current infrastructure and double it, it will cost as much or more than what it cost to lay the existing infrastructure.
  • If you overbuild the capacity from the beginning, you pay almost the same for the work and permits but pay a little more for the physical infrastructure you are installing.

There’s not need to cite any real world examples because this is basic economics, and overbuilding some types of infrastructure are very common because of future benefits. There is something called Dark Fiber, go google it.

Scary Devil Monasterysays:

Re: Re: Re: Re:

"Citation of a real world example required, one that qualifies as infra-structure, and has been around for a long time."

Every sewer in every city in the western hemisphere? Every train network not permanently overburdened? Every currently functional water supply? The power grid?

That infrastructure needs to be planned for far larger capacity than is currently needed is considered a self-evident truth by now.

Chris-Mousesays:

One radical idea would be to break up the telecom companies. Instead of breaking them up by area, break them up by function. The telecom companies would keep their existing customer sales, service, and support functions. The other part would be a regulated non-profit ‘Last Mile’ company mandated to provide high speed data services to every residence and building. The last mile company would connect all these locations to central hubs, and then sell access to the hub to the telecom companies. The last mile company would be required to sell access to any ISP (or phone company) that can get a fibre link in to the hub, and residents can switch ISPs with no more difficulty than signing a contract with the new ISP.

Of course, while we’re at it, we might as well wish for unicorns and pixie dust. It’s about as likely.

Anonymoussays:

Re: Re:

I like this approach, though I don’t think it’s necessary to break up the backbone and the last mile. I prefer something like distributor (backbone and last mile, however structured) are forbidden by law from selling to anyone but a "connection provider" who then sells on and provides support, billing etc. to users like the public and corporations. The connection providers, like the distributors, should be banned from providing content. That way a lot of perverse incentives are removed from the system.

Of course, any attempt to require such a regime would probably be met with a landslide of legislation and vote buying.

sumgaisays:

Re: Re:

… any ISP (or phone company) that can get a fibre link in to the hub.

And therein lays the rub. It’s the "getting permission" to lay the fibre (or whatever) that flies in the face of both logic and common good sense. Any such efforts as yours would have to include a rule that says no matter who originally put up a pole or who dug a trench, any and all other utilities can use that facility without having to jump through bullshit hoops. (Said utility being private, public, a co-op or what have you.) Details such as safety requirements, liability insurance, etc. are just that – details, and I have no fear that they can be worked out.

Anonymoussays:

politics as usual

so the Biden Broadband Plan has lofty goals but no substance — welcome to the real world of American government and politics

silly to expect WashingtonDC and state politicians to suddenly change their stripes after a half century of intense intereference with natural competitive tendencies in cable and broadband markets

Biden himsel of course is merely a political figurehead, with no clue on any of this. Such grandiose plans emerge from his unseen handlers

PitchforkAndTorchessays:

Exclusivity Leases in DC

I live in DC building where the landlord – or management agency – has exclusivity deals with Comcast. Can’t get any other provider even if I were to pay for the wiring. Got 60% of residents asking for fiber with RCN and they still won’t consider it. Went to a brand new under development complex where they proudly state Verizon only during the tour and state it was negotiated during the build out.

Do they get a cut of the subscription fees?

That Anonymous Cowardsays:

Something something can not serve 2 masters.

We only elect them, but corporations give them perks, donations, glowing press.

We’re going to get screwed in this once again.

Until we the people can put aside the little bullshit they use to keep us distracted and demand better under threat of being voted out nothing will ever be different.

For all of their talk about us mattering, we don’t.
Nothing matters except their reelection campagin dollars.

Davesays:

Re: Re:

Until we the people can put aside the little bullshit they use to keep us distracted and demand better under threat of being voted out nothing will ever be different.

Voting out the current representatives won’t help either. The big corporations contribute to all the candidates’ campaigns.

Anonymoussays:

and they should be worried because it wont! will there is no broadband competition, as much help and money thrown at the few providers there are and so much lobbying allowed, the broadband in the USA is going to remain as a completely crap industry to everyone except the heads of the companies and the politicians who cant do enough for them!

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