Saving Seattle from the clutches of Internet monopoly
On January 14, the United States Circuit Court of Appeals in the District of Columbia ruled that telecommunications and cable companies can “play favorites” among websites, video channels and all other content providers. This decision struck down FCC rules which tried to make the Internet “neutral,” carrying all kinds of content with equal speed.
In other words, if the New York Times pays Verizon (or AT&T, or Comcast or any other company which owns wires) a fee to deliver its content, but Crosscut cannot, www.nytimes.com will zip onto your computer screen rapidly, while www.crosscut.com will ever so slowly and painfully appear. Indeed, if Comcast owns NBC (which it does), NBC’s video content might zoom across Comcast’s wires into homes and businesses, while ABC, CBS, the Seattle Channel and other video feeds stumble slowly onto those same television sets.
It could get even more interesting when you go shopping. Do you want to buy a book or toys or new shoes? Well, if Wal-Mart pays Comcast and CenturyLink to deliver its content, you might see www.walmart.com rapidly appear on your web browser, while Amazon, Sears and Macys come up slowly — or not at all.
As the Los Angeles Times headlined, “Bow to Comcast and Verizon, Your Overlords”.
All this wouldn’t be so bad, of course, if we, as consumers, actually had a choice of who delivers our Internet. If you want to buy a car, you have dozens of brands and dealers from which to choose. If you want to listen to radio programming, you have hundreds of different stations with various kinds of programming.
But if you want Internet in Seattle, you can choose from Comcast or Centurylink. Unless you live in the Central District or Beacon Hill. Then the choice is Wave Broadband and (maybe) Centurylink. That’s it.
This lack of choice is not coincidence. Susan Crawford, former broadband advisor to President Obama, stated “The major cable providers in this country do not compete with one another. The operators clustered all cable into regional monopolies during the summer of 1997.” They deliberately do not trespass on each other's turf.
The telephone companies are almost as bad. Centurylink monopoly evolved of course, from Ma Bell — AT&T — which controlled all telephone service in the United States until 1982, when AT&T was broken up by Judge Green. But the regional Bell operating companies still maintain a de-facto monopoly on the use of their wires in each region to deliver internet service.
So what’s a consumer or a business or a city to do?
For Seattle, Gigabit Squared was the great promise. GB2 would have used the existing fiber optic cable network owned by the City of Seattle. Their plan was to build a super-high-speed network — much faster than Comcast or Centurylink — and to compete with the existing operators. Seattle consumers and businesses would have at least a little more choice.
Gigabit Squared imploded. Poor management, lack of funding, sheer stupidity all contributed.
So what’s next?
Perhaps we should take a lesson from other monopolies. Water service, electricity and the old phone company are all monopolies. It really only makes sense to have one set of water pipes or electric wires going to your house.
But the government heavily regulates — or even owns — those monopolies, which helps to keep downward pressure on rates. Water and wastewater utilities are usually owned by cities, and city council members oversee their operations and rates. City council members have to run for election. Also, there is no need for shareholder profits from rates. In Washington, 60 percent of electric utilities are owned by cities (Seattle City Light and Tacoma Public Utilities) or are public utility districts. Again, no need for shareholder profits. And private electric utilities are regulated by the Washington Utilities and Transportation Commission.
Maybe it is time for the city of Seattle to step into the breach and fund a municipal fiber broadband utility.
This utility would run fiber cables to every one of 320,000 homes and businesses and apartments. The utility would not provide Internet access, video content, television or telephone. It would only provide the wires.
Any internet service provider, telephone company or TV station could offer its services over the utility’s wires, without paying extra fees for faster service. In other words, the municipal fiber utility would be neutral and allow all content providers to provide their content without discrimination.
Such a utility is a tough sell. Comcast, Wave, Centurylink and Verizon — and all the other telecommunications and cable companies — will fight it tooth-and-nail. They will cut their prices, which is not necessarily a bad thing for Seattle residents, to try and bankrupt the municipal utility.
The city will need to fund that utility from sources other than just subscriber fees. Perhaps the city would use property taxes (like we partially fund roads and parks), or a local improvement district or another funding source.
Such a utility would face many other hurdles. But perhaps, in the wake of this latest court decision, the legal ability for the telecommunications companies and cable companies to hold Microsoft, Amazon, TV stations and others hostage, demanding exorbitant fees just to carry their content, might be just the impetus required to jumpstart such a utility in Seattle.