BILL MOYERS:Since the 1996 Telecommunications Act which I thought was going to lower the price of our monthly cable bill, it's almost doubled.
SUSAN CRAWFORD: Well, that's because Time Warner controls Manhattan. There's no competition. The cable guys, long ago, something they call “the summer of love,” divided up—
BILL MOYERS:“The summer of love?”
SUSAN CRAWFORD: Yeah. They clustered their operations. It makes sense from their standpoint. “You take San Francisco, I'll take Sacramento. You take Chicago, I'll take Boston.” And so Comcast and Time Warner are these giants that never enter each other's territories.
BILL MOYERS: You talk to certain people and they say, "Look, I don't know what this is about. I have all the gizmos I want. I have a smart phone, I have a tablet,” And they say, "What's the crisis? Because I have more access than I can use."
SUSAN CRAWFORD:There are a lot of bright shiny objects that are confusing people about the underlying market dynamics here. What people don't realize is that for this wireless access you're paying too much and the coverage is too spotty. On the wired side, that's where we're really being left behind. And here's the important tie to understand. A wireless connection is just the last 50 feet of a wire. So fiber policy is really wireless policy. These two things fit together. And if the whole country did an upgrade to cheap fiber everywhere we'd get better connection for everybody. Right now though if a mayor wants to do this for himself he'll be pummeled by the incumbents. In almost 20 states in America it's either illegal or very difficult for municipalities to make this decision for themselves.
BILL MOYERS:In North Carolina a couple of years ago lobbyists for Time Warner persuaded the state legislature to make it almost impossible, virtually impossible for municipalities to get their own utility, right?
SUSAN CRAWFORD: That's exactly right. And so now North Carolina, after being beaten up by the incumbents is at the near the bottom of broadband rankings for the United States.
BILL MOYERS: And what's the practical consequence of that?
SUSAN CRAWFORD: All those students in North Carolina, all those businesses that otherwise would be forming, they don't have adequate connections in their towns to allow this to happen. They've got-- they're subject to higher and higher pricing. They're being gouged.
BILL MOYERS:Your book did underscore for me why this is so important to democracy, to the functioning of our political system, to our role as a self-governing free people. Talk about that a moment. Why do you see this so urgently in terms of our practically dysfunctional democracy today?
SUSAN CRAWFORD: We need to be able to speak to each other effectively and effectively to government. We need to empower our citizens to feel dignified and ready to cope in the 21st century. Having a communications system that knits the country together is not just about economic growth. It's about the social fabric of the country. And a country that feels as if it can move together and trust each other is one that is more democratic. As a matter of national policy we have forced other countries to talk about the importance of internet access, foreign policy we're great at saying, "Make sure internet is everywhere." Domestically, for some reason, we haven't done so well. So I see internet access as the heart of a democratic society.
BILL MOYERS:You use that merger of Comcast and NBCUniversal as the window in your book into what this power can do to the aspirations of a democratic internet.
BRIAN WILLIAMS on NBCNightlyNews: Federal regulators today approved the purchase by Comcast of a majority stake in NBCUniversal from General Electric […] This merger will create a $30 billion media company with cable, broadcast, internet, motion picture and theme park components. The deal is expected to close by the end of the month.
BILL MOYERS:You say that the merger between Comcast and NBCUniversal represented a new frightening moment in U.S. regulatory history. How so?
SUSAN CRAWFORD:Comcast is not only the nation's largest broadband distributor with tens of millions of customers, it also now owns and controls one of the four media conglomerates in America, NBCUniversal. That means that it has a built-in interest in making sure that it shapes discourse, controls programming all in the service of its own profit-making machine. As both the distributor and a content provider, it's in its interest to make sure that it can always charge more for discourse we would think isn't controlled by anybody. So it's a tremendous risk to the country that we have this one actor who has no interest in the free flow of information controlling so much of high speed internet access.
BILL MOYERS:You say the merger created the largest vertically integrated distributor of information in the country. So what's the practical consequence of Comcast having this control over its content?
SUSAN CRAWFORD: Here's the consequence. Comcast with the control over its programming, and also because it works to closely with the very concentrated programming industry, can raise the costs of any rival coming in to provide let's say competitive fiber access. So Google in Kansas City is having real trouble getting access to sports content because Time Warner Cable, the local monopoly player there, controls that sports content. So Google or any other competitive fiber provider has to enter two markets at once. One market to provide the transport, the fiber, and then also the programming market. And making programming more expensive is yet another barrier to entry. And Comcast can carry that out now.
BILL MOYERS:So what should the F.C.C. do about that?
SUSAN CRAWFORD:This is a moment when we have to separate out content from conduit. It should not be possible for a local cable actor or any distributor to withhold programming based on volume. That's what's going on. The programmers say, "We'll sell to Comcast cheaply 'cause they're big. But if you're an upstart we're going to charge you three to four times what Comcast is paying for the same programming." That should not be legal. Everybody should get access to the same stuff at the same price and they should be announced prices.
BILL MOYERS:What about the argument that in this modern world there are certain industries, certain markets, that require an economy of scale. Critics have said that you're ignoring the sophisticated economics that govern these industries.
SUSAN CRAWFORD:The economics of these networks did not change when we added a little bit of digital pixie dust to them. It's still very expensive to build these networks. Private actors still don't have an interest in covering everybody because that's too much of an economic risk for them. The better route is sensible oversight. We can learn from our mistakes in the past when it came to regulatory regimes that didn't work. But a regulatory regime is needed without question to make this work for all Americans.
BILL MOYERS: I have to say this is pretty strong stuff. Listen to yourself. "Instead of ensuring that everyone in America can compete in a global economy, instead of narrowing the divide between rich and poor, instead of supporting competitive free markets for American inventions that use information, instead that is of ensuring that America will lead the world in the U.S. in the information age, U.S. politicians have chosen to keep Comcast and its fellow giants happy."
SUSAN CRAWFORD: For the last 30 years the rhetoric of the market being the thing we all aspire to has in a sense become the collective vision in America. Our politicians aren't separate from that kind of understanding. I think they believe that it's better to have government stay out of industry. In this particular place no government intervention is actually disaster for the country because we leave so many people behind, we subject ourselves to the informational control of just a few giants. The problem for the politicians is that there's no upside right now to fighting back. If they do they'll lose their campaign contributions. We need to get the public interested in this so that politicians will understand that they're not acting alone.
BILL MOYERS:In your last chapter you describe what happened in Lafayette, Louisiana when the city decided it wanted the very kind of internet access you're talking about. And a few years ago my colleagues and I did a documentary called “Net @ Risk” in which we looked at the threat to internet access. And we went to Lafayette and lo and behold they're doing exactly what you're describing in your book.
JOEY DUREL in Net @ Risk: We have an out-migration problem with our young people from Louisiana, and I felt it was time for politicians to quit talking and do something. RICK KARR in Net @ Risk: Something like building every home and business in town its own fiber optic connection to the information superhighway.
DON BERTRAND in Net @ Risk: We see telecommunications in the way of Internet, in the way of fiber connectivity as something that should be available to everyone.
STEPHEN HANDWERK in Net @ Risk:Just like water, sewer, electricity, telephone. I mean it all falls into that same lump.
JOEY DUREL in Net @ Risk:I think this is a tremendous opportunity for small business and to attract business here.
RICK KARR in Net @ Risk: So what the city decided to do was build its own fiber network through its municipal power and water company, Lafayette Utility Systems or L.U.S.
BILL MOYERS:How did they get away with it in Lafayette when as you say they didn't in North Carolina?
SUSAN CRAWFORD:Persistence of a mayor who very much focused on this and said, "We're going to get this done." And there wasn't a statute at that point at the state level making it illegal. Municipalities have a lot of assets at their disposal. They control the rights of way, the access to their streets and their poles that people need in order to build these networks. They can condition access to those rights of way on a particular network being built. Stockholm did this. They say, "Look, you can come in and build a fiber network as long as it's a wholesale, nondiscriminatory really fast fiber network connecting our hospitals and schools and police departments. And then you have to let anybody else connect to it." Not that hard, you just draft an R.F.P., request for proposals, and the city can do that using its control over its rights of way.
Cities often also have access to this long term low rate financing. They can put their good name behind a bond issue and make sure that it gets paid back by the subscriptions to the network over time. It's a great investment for the city, and that's what Lafayette found out.
BILL MOYERS: So how is the consumer in Lafayette situated differently from me here in Manhattan with one cable service?
SUSAN CRAWFORD: In comparison to where you are in Manhattan where there's no government intervention at all, in Lafayette the municipality is acting as a steward, standing up for you. It is in fact government's role to stand up against the ethic that might makes right. In most of America there is no government factor keeping these bullies from charging us whatever they want.
BILL MOYERS: You describe something in your book that we've talked about often at this table. Quote, "The constant easy, friendly flow between government and industry in the communications world centered around Washington D.C." Describe that world.
SUSAN CRAWFORD:It's a warm pond of familiarity. Everybody knows everybody else. They're all very nice people, you'd like to have a drink with them. They go from a job inside the regulator to a job in industry to a job on the hill, one easy flow, nice people. Outsiders have no impact on this particular world.
And it would be-- I talked to a cable representative not long ago about the need to change this regulatory state of affairs. And she looked at me and said, "But that would be so disruptive." And she's right, it would be disruptive.
BILL MOYERS:Well, you know, the F.C.C. was supposed to be the cop on the beat of the communications world. But for example Michael Powell, who served as F.C.C. chairman for four years in the mid-2000s, is now the cable and telecom industry's top D.C. lobbyist.
Meredith Attwell Baker who was one of the F.C.C. commissioners who approved Comcast's merger with NBCUniversal, left the agency four months later to join Comcast as a highly paid lobbyist. That move infuriated media groups.
SUSAN CRAWFORD:But that warm pond of familiarity in Washington sees this as absolutely normal behavior. Just yesterday the former chief of staff of the F.C.C. left to be the general counsel of a regulated company. It happens all the time. And so in order to change this you'd have to make regulation of this area not be carried out by such a focused agency. Right now, the F.C.C.'s asymmetry of information is striking. They only talk to the industry. The community is all so close. In order to break that up you'd have to make sure you had a broad based agency seeing lots of different industries.
BILL MOYERS:About the time I was reading your book I also read a speech by the present chair of the F.C.C., Julius Genachowski. He said, "The United States is in a global bandwidth race. A nation's future economic security is tied to frictionless and speedy access to information." If you were chair of the F.C.C. what would you do to move us forward?
SUSAN CRAWFORD:I know that it's important to let these municipalities make decisions for themselves. That's going to take a bill in Congress preempting the terrible state laws like the one that happened in North Carolina. We need to make self-determination possible for cities. And the second one is making sure that there's low cost, low rate financing available to build these networks.
That's the stumbling block, making sure that you can actually build without needing to put up all the money yourself. Because it pays out over time, it pays out as a social investment for the country. And then finally, changing all those rules at the FCC that are getting in the way of progress.
BILL MOYERS:So briefly describe the need.
SUSAN CRAWFORD: All Americans need a fast, cheap connection to the internet.
BILL MOYERS: And the problem?
SUSAN CRAWFORD:A few companies control access in America and it's not in their interest to bring that fast, cheap access to us all.
BILL MOYERS:And the solution?
SUSAN CRAWFORD:The solution is for people to care about this issue, ask hard questions at every debate, make sure you elect people who will act and give your mayor air cover so that he or she can act to make sure that your city has this fast, competitive access.
BILL MOYERS:The book is “Captive Audience: The Telecom Industry and Monopoly Power in the Gilded Age.” Susan Crawford, I've enjoyed this conversation. Thank you for being with me.
SUSAN CRAWFORD: Thank you so much.
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