Trump FCC Pick Thinks Broadband Caps Are Great, Likens Them To Coffee Refills(?)

Broadband

from the you-see-it's-just-like-a-nespresso-machine dept

As we recently noted, the FCC has announced that’s finally “taking a look at” broadband usage caps. We’ve noted for decades how such limits are completely artificial, technically unnecessary constructs that exist specifically so your local telecom monopoly can rip you off. They don’t “manage congestion,” they exist exclusively to price gouge captive broadband customers trapped in markets without competition.

It’s embarrassing (and a clear sign of corruption) that U.S. regulators haven’t taken aim earlier.

To be clear: the Biden FCC only says they’re going to take a look at the problem. That doesn’t mean the inquiry will result in any substantive action. That still was enough to set off the FCC’s two Trump-approved Republican commissioners, Brendan (TikTok is the Devil) Carr, and Nathan Simington.

Simington’s complaint about the FCC’s inquiry into broadband caps is particularly entertaining, because he tries to trot out coffee shops as a weird metaphor to explain why government should let monopolies rip customers off, and it just makes no coherent sense:

“Suppose we were a different FCC, the Federal Coffee Commission, and rather than regulating the price of coffee (which we have vowed not to do), we instead implement a regulation whereby consumers are entitled to free refills on their coffees. What effects might follow? Well, I predict three things could happen: either cafés stop serving small coffees, or cafés charge a lot more for small coffees, or cafés charge a little more for all coffees.”

Just…no. Broadband is not coffee. The telecom industry is not, you’ll be surprised to learn, remotely like coffee retail operations. Bandwidth capacity doesn’t function like coffee beans, and this weird comparison only goes to illustrate why some folks thought that Trump’s appointment to the FCC, a guy with no telecom experience, might have been a poor choice as it pertains to the public interest.

We’ve talked with telecom CEOs like Dane Jasper who’ve made it clear that broadband usage caps are about leveraging monopoly power to exploit captive customers. Worse, these artificial limits and surcharges give telecom monopolies additional power to prioritize their own services, harming internet services competition. It’s the entire reason the whole net neutrality fight took root.

Broadband caps exist specifically so regional monopolies can charge captive customers (who already overpay for service due to regulatory capture and market failure) even more money for absolutely no technical reason. That’s not my opinion. Comcast’s own leaked documents say this.

If there’s a stupid metaphor at play, it would be as if a coffee chain implemented a coffee lid on top of its cups that only let you take sips of coffee you already probably overpaid for at allotted intervals if you paid extra per sip. Usage caps are stupid. This metaphor is stupid. Regulatory capture is stupid.

What are Simington and Carr actually upset about? They’re concerned that if the FCC outlaws usage caps, it will then just be a hop, skip, and a jump toward “rate regulation,” which among telecom executives (and the politicians and think tanks paid to love them) is the worst horror imaginable.

But a layer beneath that is the real worry: that the FCC might take aim at concentrated monopoly power and prevent companies like AT&T and Comcast from extracting monopoly rents on captive customers. Either by directly limiting how much these monopolies can charge, stopping pointless mergers, or by driving new competition to market. Make no mistake: Carr and Simington represent the interests of the biggest telecoms here, not the actual public or broader market interests. It’s not really subtle.

The thing is: it’s a baseless worry. I’d be surprised if the Biden FCC actually ends with a successful ban on usage caps. To be clear, the Democratic FCC is far better on consumer broadband issues than Republicans. But they’re still too afraid to even acknowledge that monopoly exists or causes harm in public-facing statements, much less propose any solutions that get to the heart of the matter.

There’s many reasons why. One, the obvious: telecoms spend an estimated $320,000 every single day lobbying the government for favorable policy. That’s a lopsided battle even before you get to the policy drafting table. Two, companies like AT&T and Comcast are bone-grafted to our domestic surveillance apparatus, making real accountability for predatory behavior extremely hard to come by.

The idea that the Biden FCC is going to suddenly engage in rampant “rate regulation” is a scare-mongering fiction. It keeps libertarians up late in their soggy bedclothes, but it’s not real. Here in the real world, we’re looking at a very real possibility that a corrupt Supreme Court just effectively made federal broadband consumer protection all but illegal. Any effort to ban caps will be buried in lawsuits.

It’s always this way in U.S. telecom. Predatory, government-coddled monopolies dominate most communities nationwide, resulting in high prices, spotty access, slow speeds and annoying restrictions. And pretty much any effort to do anything about it is portrayed as some kind of radical over-reach by regulators, even if the action in question (like banning harmful usage caps) is common sense and would have happened twenty years earlier in a functioning and competently regulated democracy.

Filed Under: brendan carr, broadband, broadband caps, caps, fcc, high speed internet, nathan simington, telecom