AT&T Has DC Pushing The Idea That 'Big Tech' Should Give 'Big Telecom' Billions For No Coherent Reason

from the we've-been-over-this dept

Last month we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that “big tech” companies get a “free ride” on telecom networks, and, as a result, should throw billions of dollars at “big telecom” for no real reason. You’ll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn’t be allowed to “ride his pipes for free.” Whitacre was effectively arguing that in addition to paying him a premium for bandwidth, tech giants should pay him a troll toll. You know, just because.

Telecom lobbying and policy folks have done a great job capitalizing on the legitimate animosity over “big tech” to reseed this idea in the press using captured lawmakers and unskeptical news outlets. For example here’s Axios this week parroting GOP claims that they genuinely want to address the shortfall in broadband subsidy funding by… having technology giants pay for it:

“It’s just simply asking them to pay a fair share and start contributing on an equitable basis for these networks that they benefit from so tremendously,” Carr told Axios.”

Again, this is a self-serving 20 year old AT&T policy argument parroted by captured regulators and politicians. Namely that tech giants are mean old freeloaders, and should be throwing billions of dollars at telecom giants. Telecom giants that have long coveted Silicon Valley ad revenues, but have repeatedly proven too incompetent to develop their own modern media and advertising alternatives. So instead, they come up with creative ways to game DC’s revolving door regulators and campaign cash slathered lawmakers in a bid to obtain money they legitimately believe they’re “owed.”

But it’s all bullshit. For one, nobody gets a “free ride” when it comes to US telecom. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That’s on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like those quoted in the Axios piece).

Axios, like many outlets, has also helped push the narrative that the modern GOP is genuinely interested in “antitrust reform”:

“The interest in taxing Big Tech coincides with some GOP support for antitrust bills that would prevent the companies from buying up smaller rivals or favoring their own products.”

I’m in the minority in thinking the GOP’s support for “antitrust reform” (with a tiny few exceptions) is populist, performative bullshit. In reality, they’re just generally pissed that some wealthy Californians belatedly (and sloppily) prevented them from spreading disinformation and racist dog whistles on the internet. So they’re looking for any leverage over those companies they can find. They’re also listening to the siren calls of AT&T and Rupert Murdoch, who want their competitors in “big tech” saddled with additional scrutiny as they successfully obliterate government oversight of their own sectors (media and telecom).

I’m not saying tech giants haven’t engaged in dodgy business practices or that we don’t need meaningful reform. But I am saying that a lot of corrupt, bad actors have capitalized on the public’s legitimate animosity over big tech to push idiotic, self-serving ideas via corrupt lawmakers. And while the FCC’s broadband subsidy (E-Rate, USF) systems do need a funding overhaul, there are plenty of ways to accomplish that that don’t involve forcing Netflix to pay AT&T billions of additional dollars for no reason.

Axios doesn’t bother to mention it, but the FCC’s broadband subsidy programs are a broken mess that routinely dole out billions of dollars for network build-outs that make no coherent sense. We also throw billions in tax breaks, subsidies, and regulatory favors (like killing net neutrality) at companies like AT&T in exchange for jack shit. Those genuinely interested in shoring up broadband funding gaps should probably start looking at the vast, unaccountable subsidy trough that gives giants like AT&T untold billions in exchange for perpetually half-completed fiber networks.

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Comments on “AT&T Has DC Pushing The Idea That 'Big Tech' Should Give 'Big Telecom' Billions For No Coherent Reason”

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13 Comments
This comment has been deemed insightful by the community.
Samuel Abram (profile) says:

The difference between Amazon and my local ISP

I’m lucky to live in NYC which has a minimum of choice between telco duopolies (such as Verizon and Spectrum). I really don’t like Amazon. That being said, I can choose not to patronize Amazon (with the exception of Twitch (but fortunately their DMCA policies are making it easier to avoid)). I can’t choose to avoid an ISP, otherwise I’d be without internet access.

For some reason the media and the politicians see the avoidable behemoths as more deserving of scrutiny than the unavoidable ones.

MightyMetricBatman says:

How dare California have a representative say in this republic equivalent to their percentage of the population of the state to the nation!

Everyone knows the largest, populous, and richest state (pay no attention to the horrific income inequality) must never have proportional reputation compared to cultural hallmark states like Wyoming.

This comment has been deemed insightful by the community.
That One Guy (profile) says:

It's only pocket-change, right...?

As always the only response that people/groups making the ‘tech companies are getting a free ride!’ claim should get is ‘Put up or shut up’. Pay even a week of those company’s internet bills and then show the results afterwards or shut up and admit that it’s a grossly dishonest argument, with anything else treated as a dishonest attempt to dodge and an admission that the argument isn’t an honest one and the person making it knows it.

As for the attempts to use anti-trust against tech companies by claiming that it’s to benefit the public I’ll maybe start considering those efforts in good faith rather than grossly dishonest PR stunts and vindictive measures to punish companies when other industries start getting the same treatment, and given history I don’t expect I’ll need to do so any time soon.

MathFox says:

A coherent reason

There is one reasoning I can think of and it goes like this:

Big Tech companies are well managed innovating companies that are profitable because of well managed innovation. Big Telecom companies are poorly managed and incapable of innovating by themselves, that’s why they need all government protection that they can get so that they can waste more money on acquisitions that require extensive write-offs.

Not really coherent imo

Melvin Chudwaters says:

I have cooled to the idea that Google (or another company like it) can be our champion.

Still, I wonder what would happen if they started to push the idea that AT&T (and other telecoms) are traitors that have sabotaged our internet infrastructure through decades of neglect, malice, and incompetence such that their corporate charters should be dissolved, their assets sold at firesale auctions, and their C-level executives barred from ever managing companies again?

Surely, they could get some Congressmen to listen to that narrative, when the lobbyist is schmoozing richly. It might even fly with those of a certain political bent.

And it’d be cheaper than allowing AT&T to collect a "we bribed them first nyah nyah nyah" tax on everyone whose business is internet-related.

Scary Devil Monastery (profile) says:

Re: Re:

"I have cooled to the idea that Google (or another company like it) can be our champion."

If you ever had the idea that any company would be a champion for anyone other than the shareholders and owners of said company then the joke’s on you.

What you can get is companies who abide by standards and principles because that is, in the long run, what brings the clientele.
Like social platforms, bars and restaurants creating environments where assholes and large-scale liars aren’t tolerated.

This comment has been deemed insightful by the community.
PaulT (profile) says:

As someone who deals with bandwidth for a large company, I’d like to get one of these free deals that these people thing that "big tech" get. I mean, if you’re building massive datacentres, and you don’t even have to pay someone to connect it to a backbone, it would be a massive saving and more profit share for me. I just don’t see where between our massive bandwidth bill and the bill our customers pay, where the savings are.

Anonymous Coward says:

oh?

So did everyone just hear Brendan Carr offer to pay the broadband bill for all these companies using internet connections?

All this noise about not paying their fair share, so I’m sure Brendan can pay their current internet bills for a month… after all, they aren’t paying a fair share and what better way to demonstrate it, than a single person paying the current bill that all these tech companies? after all, if a single person isn’t sweat the bill, then the tech companies must be getting away with ripping off the telecom industry.

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