October 23, 2006 ·
Former FCC Chairman William Kennard published an op-ed in the New York Times Saturday. The main point of the piece is to lament the truly awful state of broadband access for the poor in the United States. One statistic (not mentioned by Kennard) says it all: As the OECD reported, the United States has the 4th highest level of students (by 15 years old) who have never used a computer — worse than Greece, Poland, Portugal, and the Czech Republic.
What I found extraordinary about the piece, however, was its slam of “network neutrality” legislation. As he wrote:
Unfortunately, the current debate in Washington is over “net neutrality” — that is, should network providers be able to charge some companies special fees for faster bandwidth. This is essentially a battle between the extremely wealthy (Google, Amazon and other high-tech giants, which oppose such a move) and the merely rich (the telephone and cable industries). In the past year, collectively they have spent $50 million on lobbying and advertising, effectively preventing Congress and the public from dealing with more pressing issues.
So let’s get this straight:
After 8 years of deregulating broadband in America (begun by Kennard, completed by Martin), both DSL and cable are free of any real obligation to protect the original neutrality of the Internet. Once some rules imposed in merger agreements expire, last-mile broadband providers will be free to pick and choose the content and applications they want the network to carry. They will use this power, as at&t Chairman Ed Whitacre explained, to tax the most successful content and application providers on the net. That tax, as I and many have argued, will effectively block the next generation greats.
Over these same 8 years, following this policy of deregulation, we’ve gone from 1st in the world to rivaling, as Kennard puts it, Slovenia. Broadband on average is slower in the US, and more expensive. In France, a triple play “Internet, Telephone, and TV” package is $32. Comcast offers less for $150.
At some point, you might think some would begin to worry about whether the US strategy makes sense. (compare: State of Denial). Forget the theory, forget the hand-waiving by academics and ideologues: Just ask one simple question — is the policy working as well as the (different) policies of our competitors?
I. and many, have concluded it is not. I take it, that is the view of the more than a million who have written to policy-makers arguing for network neutrality legislation. These people want policy that will finally push broadband providers to provide at least the quality and price of broadband in France. The online campaign to get Congress to do something here has been amazing, rivaling only the campaign to stop the FCC from passing rules that would permit even more concentration in media ownership.
But now comes Kennard to belittle this extraordinary online movement. It’s not a battle, he tells us, about whether competition in applications and content, ultimately driving penetration, will continue. It is instead a battle about whether the “extremely rich” will prevail over the “merely rich.” Nothing important in that battle, he tells us (except perhaps to these various flavors of the rich); Congress should therefore move on from this agenda for billionaires, and take up the real challenge of serving the poor.
It’s funny, I hadn’t realized I was a Google tool. I had thought we were pushing to reverse a failed policy because we wanted to enable the next Google (that was my point about YouTube). I thought we were angry because the “merely rich” had yet to provide broadband as broadly as in other comparable nations. And I thought we were fighting the efforts of the “merely rich” to further reduce competition, either by buying up spectrum that would enable real wireless competition, or by getting state laws passed to make muni-competition illegal. I had thought these were important issues for the new economy — keeping the platform as competitive as possible, to keep prices and quality moving in the direction they move in the rest of the developed world.
Now that Kennard has set us straight, however, I’m relieved to know we can finally move onto other, more important issues. Global warming is at the top of my list. Maybe you have other priorities.
But before we move on, let’s not forget:
Even if America’s broadband strategy doesn’t make sense for America, it makes lots of sense for certain companies. Kennard knows this well, because he sits on the board of many of those who benefit most from this deregulation. His op-ed acknowledges his work with the Carlyle Group. He is also on the board of Sprint Nextel Corporation, Hawaiian Telcom and Insight Communications (a cable provider). These companies will benefit directly if Kennard succeeds in getting Congress to forget Network Neutrality. They will become “merely richer” at the expense, I believe, not of Google or eBay, but of the next gang of kids with the next great idea that Google, and eBay (and Comcast and at&t) just don’t get.
I don’t know Kennard personally. People who do tell me he’s an extremely bright, ethical man. I’m sure that’s right. But there’s something unseemly to me when an FCC Chairman moves to the boards of the companies he used to regulate, and then uses the op-ed page of a paper on whose board he now sits, to argue for the poor by pushing the agenda of the “merely rich.” (How can a paper that obsesses to pretend its most brilliant writers have no opinion of their own not wonder about the weirdness here?)
They say Washington has to be like this. You could never get great people into government if they couldn’t cash-out once they left. But I bet if the next President demanded of nominees to the FCC that they promise not to take jobs in the industries they regulated for some “limited time” (let’s say, the life of a copyright), the President would find lots of qualified nominees. Maybe then it would be easier to hear the pleas for the poor, without the echo of the interests of the “merely rich” confusing the message.