FTC Drinks The Telco Kool-Aid

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It’s sad to think parts of our free market economy have failed, become gummed up by the sludge of its own engine. It’s supposed to work, to drive us, keep us ahead of everyone. Only, it’s not so much anymore, the engine is aging, and though we try to wish it away, reality is setting in, even as vested storytellers perpetuate the myth to keep us wishing.

FTC Drinks The Telco Kool-Aid
FTC Drinks The Telco Kool-Aid

Not that the whole car is bad. It just needs some maintenance from time to time. In the 20th Century it was the robber barons, Big Blue and Ma Bell, and in this century it’s, well, the descendants of Ma Bell gumming up the works.

So the FTC, after researching the matter of Net Neutrality, has come out in opposition, coming to the perplexing conclusion that lack of choices for broadband access and tight control over development is driving more competition in the space, not less. The commission is drinking the same Kool-Aid as the FCC lately, it would seem, which has some amnesia-causing agent within.

Commissioner Majoras’ opinion that "the net effects of potential conduct by broadband providers will be on all consumers" are not known has the tinny echo of voices carried over phone lines, clearly stating to Verizon, et alia, "yes, I can hear you now."

The Kool-Aid is strong. And if so, if the administration and its regulators are so enamored with corporate talking points to the extent that AT&T’s signal is heard above the public’s (a data plan they’d like to continue), it may be time to remind the FTC what these incumbent providers have brought to America, how they’ve paid us back for our support, and what they plan to do for us in the future.

What the Free Market (Electronic Communications) Economy Had Gotten Us:

1.    Default on $200 billion taxpayer loan to build out broadband services.

2.    Broadband prices 40 times cost.

3.    Text messaging at over 7000 percent markup.

4.    Median download speed of 1.97 megabits per second. Japan has 61 megabits per second.

5.    A telco/cable duopoly whereby nearly 100 percent of the public has two choices of (slow) broadband providers.

6.    Lies about the nature of broadband competition. All other alternatives (broadband over power lines, satellite, 3G wireless) currently cannot match speed, pricing, and availability.

7.    Enormous cost barriers to entry into the broadband service market.

8.    Reneged promises. Cable was supposed to be commercial free, and consumers were supposed to have a choice in channels, not packages of channels.

9.    The possibility that telecommunications and cable companies will follow their already established cable TV and mobile phone practices – controlled, pre-packaged programs at exorbitant costs.

10.    Efforts to block competition by ensuring the soon-to-be-available 700 MHz wireless spectrum (ideal for true wireless broadband) is bought up and hoarded by incumbents.  

Just to name a few. They want a tiered, discriminatory, small business crushing Internet, and have said so. They say Net Neutrality provides no incentive to invest all the while knowing the future is in fiber, which they will own and control. Yet history, facts, reality and stated intent have done nothing to sway US regulators. Something is very, very wrong.

Google’s Richard Whitt, the company’s Washington Telecom and Media Counsel, has written an excellent two-part blog post about the realities of the US broadband market, type-based differentiation, and Google’s objections to telco/cable talking points with technical details.

Also an excellent read is Bob Frankston’s "Sidewalks: Paying by the Stroll," which analogizes the Net Neutrality issue to "Sidewalk Neutrality" in a very real and down-to-earth way. 


FTC Drinks The Telco Kool-Aid
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  • Franklin

    Jason, the free market cannot “fail” — it can merely fail to provide the result you’re seeking. To bemoan the state of the free market while advocating regulation is misinformed at best and patently disingenuous at worst.

    • Jason Lee Miller

      I understand and appreciate your point….except for the disingenuous part. I have never, not in my life, been disingenuous. I’ll accept misinformed, not just because you say so, but because there’s a lot I don’t know (with any luck, Socrates was right and that admission is the beginning of wisdom)…but it certainly does seem that there are abuses afoot and the average consumer is feeling the pain of it….the robberbarons of today need to be kept in check and every generation will have them, and have to deal with them…in 50 years, we may be complaining about Google or another juggernaut startup, but they’ll always have to be pulled back from exploiting, and we’ll have to keep an eye on the government as well, who benefits from turning its head the other way. Today it’s pharma, oil, and telco…tomorrow it will be…well, we’ll see

      just my two cents

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