AT&T Has DC Pushing The Idea That 'Big Tech' Should Give 'Big Telecom' Billions For No Coherent Reason

Broadband

from the we've-been-over-this dept

Last month we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that “big tech” companies get a “free ride” on telecom networks, and, as a result, should throw billions of dollars at “big telecom” for no real reason. You’ll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn’t be allowed to “ride his pipes for free.” Whitacre was effectively arguing that in addition to paying him a premium for bandwidth, tech giants should pay him a troll toll. You know, just because.

Telecom lobbying and policy folks have done a great job capitalizing on the legitimate animosity over “big tech” to reseed this idea in the press using captured lawmakers and unskeptical news outlets. For example here’s Axios this week parroting GOP claims that they genuinely want to address the shortfall in broadband subsidy funding by… having technology giants pay for it:

“It’s just simply asking them to pay a fair share and start contributing on an equitable basis for these networks that they benefit from so tremendously,” Carr told Axios.”

Again, this is a self-serving 20 year old AT&T policy argument parroted by captured regulators and politicians. Namely that tech giants are mean old freeloaders, and should be throwing billions of dollars at telecom giants. Telecom giants that have long coveted Silicon Valley ad revenues, but have repeatedly proven too incompetent to develop their own modern media and advertising alternatives. So instead, they come up with creative ways to game DC’s revolving door regulators and campaign cash slathered lawmakers in a bid to obtain money they legitimately believe they’re “owed.”

But it’s all bullshit. For one, nobody gets a “free ride” when it comes to US telecom. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That’s on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like those quoted in the Axios piece).

Axios, like many outlets, has also helped push the narrative that the modern GOP is genuinely interested in “antitrust reform”:

“The interest in taxing Big Tech coincides with some GOP support for antitrust bills that would prevent the companies from buying up smaller rivals or favoring their own products.”

I’m in the minority in thinking the GOP’s support for “antitrust reform” (with a tiny few exceptions) is populist, performative bullshit. In reality, they’re just generally pissed that some wealthy Californians belatedly (and sloppily) prevented them from spreading disinformation and racist dog whistles on the internet. So they’re looking for any leverage over those companies they can find. They’re also listening to the siren calls of AT&T and Rupert Murdoch, who want their competitors in “big tech” saddled with additional scrutiny as they successfully obliterate government oversight of their own sectors (media and telecom).

I’m not saying tech giants haven’t engaged in dodgy business practices or that we don’t need meaningful reform. But I am saying that a lot of corrupt, bad actors have capitalized on the public’s legitimate animosity over big tech to push idiotic, self-serving ideas via corrupt lawmakers. And while the FCC’s broadband subsidy (E-Rate, USF) systems do need a funding overhaul, there are plenty of ways to accomplish that that don’t involve forcing Netflix to pay AT&T billions of additional dollars for no reason.

Axios doesn’t bother to mention it, but the FCC’s broadband subsidy programs are a broken mess that routinely dole out billions of dollars for network build-outs that make no coherent sense. We also throw billions in tax breaks, subsidies, and regulatory favors (like killing net neutrality) at companies like AT&T in exchange for jack shit. Those genuinely interested in shoring up broadband funding gaps should probably start looking at the vast, unaccountable subsidy trough that gives giants like AT&T untold billions in exchange for perpetually half-completed fiber networks.

Filed Under: brendan carr, fcc, free ride, net neutrality, networks
Companies: facebook, google