Rigged? You Want Rigged?

Americans pay some of the highest rates for broadband cable in the developed world. So many of our Asian and European counterpart blanch at what Americans spend to access a media-rich Internet. Less affluent Americans use smart phones to access the Web, or maybe a computer at the local public library, because cable and satellite access is so profoundly expensive. The 3-2 majority of Democrats making up the Federal Communications Commission has focused on opening up that access and finding ways to get our Web-access rates in line with the rest of the world.

The Commission votes along party lines: Republicans for allowing cable operators and carriers to charge what they want, to negotiate exclusive “franchises” with local municipalities regardless of what’s best for most of us and to allow duopolies and monopolies to squelch free market competition. Democrats want to keep rates low, add real competition and foment greater bandwidth deep into rural areas, with greater savings within urban centers as well. But the FCC has to lumber under a seriously outmoded enabling statute – the Communications Act of 1934 (as amended in 1996) – one passed and amended in the era before globally pervasive broadband, Facebook, Twitter, NetFlix, Hulu and OTT (over-the-top, direct content provider to consumer).

Most Americans get their broadband Internet access from one or two local sources, based on franchises awarded by local municipalities granting exclusive access to local utility rights-of-way. Rates across the United States are remarkably the same. Reacting to these predatory practices, the FCC has drilled down on using federal preemption (over the public airways and Web-ways) to set aside these anti-competitive local rules.

Even when some cities and towns have reprioritized Web access, several by creating directly-provided municipal Internet access (free or nominal), they have found that the carriers to whom these cities and towns accorded exclusive rights aren’t going to let that happen… even when there are miles of unused fiber and cable ready to be used. These carriers claim that their negotiated “exclusivity” is necessary to insure they have enough revenue to service and upgrade their franchise. But with no competition, cable and Web-access services are notoriously shoddy. And some of the necessary upgrades would eat too much into profits for the carrier to implement. With no competition, why bother?

Some whisper, “conspiracy,” since high fiber bandwidth obviously mitigates the “high cost of servicing high volume bandwidth users” argument big time. The fact remains that there is an awful lot of unused fiber out there, but the big carriers fighting for premium pricing (killing the concept of “net neutrality”) want to make sure that fiber stays unlit as much as possible. Here’s the analysis from Motherboard.com (June 4, 2014): “In light of the ongoing net neutrality battle, many people have begun looking to Google [as a fiber installer vs. information provider] and its promise of high-speed fiber as a potential saving grace from companies that want to create an ‘internet fast lane.’ Well, the fact is, even without Google, many communities and cities throughout the country are already wired with fiber—they just don't let their residents use it.

“Throughout the country, companies like Comcast, Time Warner Cable, CenturyLink, and Verizon have signed agreements with cities that prohibit local governments from becoming internet service providers and prohibit municipalities from selling or leasing their fiber to local startups who would compete with these huge corporations. 

“Because ISPs often double as cable and telephone companies, during contract negotiations with governments, they'll often offer incentives to the government—such as better or faster service, earlier access to (their company's) cable internet for residents, and the like—in exchange for a non-compete clause… To be clear, these are often strictly local agreements between cities and cable giants.”

The problem is that the FCC attempt to override those local laws hit a brick wall; it seems that enabling statute didn’t contemplate the contemporary digital world. We’ve had two full decades of digital innovation – plus the underlying socio-economic changes – since the Communications Act was last amended, and we have a Republican Congress that would only vote to limit the FCC further, because its regulatory bent is bad for big-carrier profits. That statute is simply obsolete, and a federal appeals court put the kibosh on the FCC’s attempt to preempt local laws, failing to find the necessary FCC authority under that decrepit law.

“A federal appeals court said on [August 10^th] the U.S. Federal Communications Commission could not block two states from setting limits on municipal broadband expansion, a decision seen as a win for private-sector providers of broadband internet and a setback for FCC Chairman Tom Wheeler.

“Cities in Tennessee and North Carolina had sought to expand municipal broadband networks beyond current boundaries, but faced laws forbidding or placing onerous restrictions on the expansions.

“The FCC voted 3-2 in 2015 to issue an order seeking to pre-empt those state laws, saying a 1996 law [yup, that one] required it to remove barriers to broadband investment and that the municipalities wanted to expand service into areas with little or no internet service.” Washington Post, August 10^th. The digital Stone Age seems to have an ally in the Sixth Circuit. And the results that could follow are just plain stupid.

“On the first day of the harvest [in late August], a line of trucks brimming with sweet potatoes rolled into Vick Family Farms, headed for a new packing plant that runs on ultrafast internet.

“The potatoes were tagged with online bar codes to detail the plots where they grew, their types of seed, and dates and times picked. On a conveyor belt, 50 flashing cameras captured and sent images of the spuds to an online program that sorted the Carolina Golds by size and quality and kicked them into boxes.

“The Vick family built the plant only after the nearby city of Wilson agreed early last year to bring its municipal broadband service to the 7,000-acre farm. Since the plant opened in October, the farm’s production and sales to Europe have jumped.

“But now, after a legal battle between state and federal officials over broadband, the farm and hundreds of other customers in the eastern region of the state may get unplugged… ‘We’re very worried because there is no way we could run this equipment on the internet service we used to have, and we can’t imagine the loss we’ll have to the business,’ said Charlotte Vick, head of sales for the farm.

“Vick Family Farms got caught between the Federal Communications Commission and North Carolina state legislators over the spread of municipal broadband networks, which are city-run internet providers that have increased competition in the broadband market by serving residents where commercial networks have been unwilling to go.” Washington Post, August 28^th. And why would a GOP-dominated Congress want to stop those great big carriers from making all that money. Little guys? Well, after all, they are little guys. Why bother?

I’m Peter Dekom, and you wonder why populism is rising so fast… but you have to wonder why the GOP is laying claim to fixing the income inequality their policies have caused and continue to cause?