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What’s Incumbent upon Incumbents?

After a short coffee break, Freedom to Connect participants reconvened for a panel discussion moderated by Kevin Werbach, former editor of Release 1.0 and an assistant professor of legal studies at the Wharton School, University of Pennsylvania. Participants included Mark Cooper, director of research at the Consumer Federation of America; Andrew Schwartzman, president of the Media Access Project; and Jay Stanley of the ACLU.

After a short coffee break, Freedom to Connect participants reconvened for a panel discussion moderated by Kevin Werbach, former editor of Release 1.0 and an assistant professor of legal studies at the Wharton School, University of Pennsylvania. Participants included Mark Cooper, director of research at the Consumer Federation of America; Andrew Schwartzman, president of the Media Access Project; and Jay Stanley of the ACLU. What follows is a partial transcript of their conversation:

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Kevin Werbach: The last panel talked about how thoroughly and irredeemably screwed up the existing vertical siloed structure for telecom is. The reality is, that’s what we got. The FCC today is largely operating under the very old, creaky framework. The Brand X was argued Tuesday before the Supreme Court, and that case will have some major implications. We have three very distinguished panelists here who will discuss Brand X and what’s incumbent on incumbents.

Andrew Schwartzman: This may not seem immediately germane, but it is. This is not a criticism of this conference in general or David in particular; it is a criticism of every single person here. People who perceive themselves as on the cutting edge think they have a better perspective of how the world can be made better. Most often, the room is full of white males. Any exclusion of women and other people is a challenge to all of us to reach rampant development of broadband development. It’s a societal issue.

How does this relate to Brand X? Earlier today, we heard discussion of whether the antitrust model is sufficient to guarantee we’ll have competition. It isn’t. It isn’t in practical terms. Secondly, antitrust is exclusively concerned with competition and the economic impact of competition. Antitrust does not take into account democracy, citizenship, or free expression. Those are very important reasons why broadband deployment is such a high priority.

Broadband deployment is not automatic. It can only happen through a system that accommodates it. Mark often points out that monopolists behave like monopolists. Cable television did not have to be the way it is today. There was discussion in the 1960s about making cable a common carrier. Cable companies didn’t necessarily understand that there were markets out there for different programming. That’s not irrelevant because the take-up rate in the African American community is extraordinarily high. Cable is more valuable in some communities than a telephone.

We have choices to make. If we leave them to incumbents, they’ll make choices that maximize their interests and profits — and not democracy. That’s what the Brand X case is about. It says cable companies will not have to carry Internet traffic without slowing down content from properties that are unwilling to pay cable companies special treatment. The dial-up Internet was not preordained by God.

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You need to maintain nondiscrimination. A few weeks ago, a local exchange carrier blocked Vonage. The FCC said you can’t do that and fined them $15,000. If that happened today on Comcast, the FCC lacks regulatory authority to do anything. It has proposed to reclassify DSL service the same way. If we lose the Brand X case, that’s a very important issue. It’s not about deployment for the sake of deployment.

Jay Stanley: The ACLU has an interest in this. It’s a free speech issue. We’ve been involved in the open access issue for years. The Internet is the most significant free speech forum that has emerged in decades, if not ever. It’s a forum for speech that needs to be protected at all costs.

Cable is the dominant means for high-speed Internet access. Cable is not competitive. Cable is matched by other alternatives that are theoretical, technologically inferior, or hopeful. Cable companies have a technical ability to mess with Internet usage.

We’ve released an updated version of a white paper that looks at alternatives to broadband. Not only do the cable companies have the technical ability to do this, they have an economic incentive to do so. This is a very complicated issue. There’s a tendency to think that the Internet was born free and will be free. Vigilance is the eternal price of liberty.

Mark Cooper: What people want is their birthright, their legal heritage. What they’re demanding is something their forefathers demanded. We’ve got this horrible system in place, but not everything that’s old is bad. The principle of nondiscrimination and common carriage is as old as capitalism itself. When capitalism replaced feudalism, the key charge was mobility. As capitalism dissolved feudalism, nondiscrimination immediately came into common law. Innkeepers could not deny a traveler lodging without good cause.

The principle came under common law until the middle of the 19th century. The railroads did not want to be subject to this. They wanted to own their own routes, and they began to discriminate. They decided which towns lived and died. We had the progressive rebellion, and then we got the Commerce Act. The interesting thing is that it was passed around the time of the Sherman Act. Antitrust alone is not alone.

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When the patent ran out on the telephone, what did AT&T do? They refused to interconnect with little independent telephone companies. In 1909 we got the Kingsbury Commitment. The claim that we’ve got two guys competing so we don’t need common carriage is wrong historically. If you allow the provider of the means of communication to discriminate, you will kill competition.

This is a very old, very good principle. We need to use creativity to make it appropriate for the 21st century.

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