January 16th, 2013 Internet Society NY Chapter's Captive Audience: The Future of Information in America


On Wednesday, January 16, 2013, OLC attended Internet Society's event at Cardozo School of Law. Susan Crawford was the features speaker at the event titled, Captive Audience: The Future of Information in America, which is the title of her newest book about the current state of Internet providers and why Americans pay so much for high speed Internet access.

"In the 30s," Susan Crawford began, "electricity was for the rich. Series of private companies controlled electricity, covering only areas where they deemed profitable." She explained that Franklin Delano Roosevelt accused the electric companies of deception and forced the companies to distribute electricity throughout the United States. "Now," Crawford said, "we take electricity for granted."

Crawford outlined the problem that the United States, as a whole, was facing. "About a quarter of households don't have Internet access. And another third don't subscribe to high-speed Internet. These people don't have high speed Internet even though it is essential for jobs, progress in education, getting healthy, getting employed.... It gets felt like they're left in the dark," she said. "People are charged up the nose for Internet access." People treat communications like private entities, but gas, heat and water are considered public.

"Is competition going to help Americans?" she asked. "No," she answered. "Where consolidation is possible, competition is impossible." Crawford understands that for profit maximization, the cable companies worked together and divided up the country amongst themselves. On phone companies, she revealed that digging up copper wires to replace with fiber topics proved too expensive for the phone companies so they backed away from providing fiber optics networks around the country.

"Verizon and AT&T own about 70 percent of the market," Crawford said.  However, "Cable gets the lion's share of Internet subscriptions because of the lack of FTTH (Fiber to the Home)," that was shelved by Verizon and other phone companies to co-market with cable companies instead of competitively leveraging the market. "FTTH will not be available to 80 percent of Americans," she said. "Cable companies are their only choice," which allows for price gouging. "No one will say, 'I wish our Internet was slower,' so people have no choice but to pay for expensive high-speed Internet."

Verizon and AT&T run a wireless duopoly. "They are currently shifting from wired to wireless. Verizon actually sold off a bunch of telephone lines to transform their character," Crawford said. She compared the US to Europe and explained that Europe paid less for their Internet due to more competition and Internet being viewed more as a commodity. She revealed, "Verizon and other companies are steadily removing regulations on their own, claiming that they are 'speakers' and are attempting to convince the Supreme Court."

"What should we do?" Crawford asked the audience. "What can we do?" She outlined a variety of proposals to counter the co-marketing companies: 1) No entry: States bans on municipal broadband—make it easier for cities to disrupt the cable companies, but it is difficult to start because incumbents persuaded states to outlaw them. 2) Make it easy for broadband creators to get capital. 3) Remove built-in conflict of interest—separate content from conduit. 4) Get the problem out into the public consciousness.

"The country as a whole has fallen behind significantly versus the rest of the world," Crawford said. An audience member asked how to deal with the wireless duopoly. Crawford simply said, "Make more competition in the wireless space. If more fibers are placed, then it will be easier for competition to start up and challenge Verizon or AT&T. Even just having T-Mobile in the picture allows for a 'Bring Your Own Device' plan."

"This issue is about infrastructure. It does relate to copyright and freedom of information, but this is an issue that works on a different level," she said. "There should be a Federal view on what is basic for Americans."

Crawford also revealed the deregulated state of fiber optics. Verizon allegedly claimed that Hurricane Sandy destroyed the copper wiring and they had to replace the wiring with fiber optics, but due to its unregulated state, "it is a frightening venture."