CNET Amplifies FCC's Carr's Attempt To Force 'Big Tech' To Pay 'Big Telecom' For No Reason

from the troll-tolls dept

So last week 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 for bandwidth, tech giants should pay him a troll toll, just because.

As we noted last week, this claim that technology giants (or anybody, really) gets a "free ride" when it comes to US telecom networks is laughable. 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 Carr).

In reality, the argument that "big tech" gets a "free ride" has long been a flimsy proxy for telecom providers who believe it's their God-given right to get a cut of massive Silicon Valley ad revenues, even if that makes no coherent sense. It has popped up again and again for fifteen straight years, usually out of the mouths of those prodded into making it by telecom policy and lobbying organizations.

So when it popped up again last week I was fairly sure it would be ignored. Until CNET grabbed Carr's column believing it was in good faith, and amplified it to even more people:

"In a follow-up interview with CNET on Friday, Carr said companies like Facebook, Amazon, Apple and Netflix have been enjoying a free ride on the internet infrastructure, while millions of Americans have been paying what amounts to an additional tax on their telephone bills for broadband service.

"It's time for Big Tech to pay its fair share," Carr said.

CNET barely challenges Carr's assertion that these companies get a "free ride," even though you can't go five feet without running into an announcement where a company like Google is spending big bucks on telecom infrastructure. While Carr is right that the existing FCC USF and subsidization model does need fixing as contributions drop, Carr's not actually coming at this argument in good faith. If he were, he'd be able to mention in passing the billions we throw at telecom giants for fiber networks they routinely half deploy, or the countless examples of outright subsidy fraud that have plagued the telecom sector for years.

Instead the onus for funding America's unfinished broadband deployments is for whatever reason thrown at the feet of Silicon Valley, something Carr rambles on at length about, as if telecom sector monopolization/corruption and FCC incompetence is somehow Silicon Valley's fault:

"When it comes to deciding which companies should contribute to the fund and how much they should be required to pay, Carr suggests that legislators look at companies that benefit the most financially from the use of internet infrastructure.

..."For instance, Google's ad revenues -- I think those are fair game for looking at a charge to support the network," he said. "The same with Facebook or Apple's App Store, maybe even iPhone cloud services and certainly the [video] streamers."

But again, this presumes that these companies don't already pay massive amounts of money for bandwidth and telecom infrastructure. Or that telecom giants have somehow received an unfair shake, despite gleaning untold billions in tax cuts, subsidies, merger approvals, and regulatory favors in exchange for network investment and job promises that routinely never show up. CNET does at least point out this is all not new, though it's framed in the "he said, she said" view from nowhere journalistic approach that usually leaves readers wondering which side is telling the truth:

"This is an argument that large internet service providers have been pushing for years," former FCC Chairman Tom Wheeler said in an interview. In 2006, AT&T's former CEO Edward Whitacre was among the first to suggest publicly that companies such as Google shouldn't be given a "free ride" on his network. The comments ignited more than a decade of debate over net neutrality regulations.

CNET then proceeds to quote the telecom lobby, trotting out Rick Boucher, one time fair use champion turned AT&T lobbying and policy prop:

"Groups representing the telecommunications industry largely support Carr's proposal. The Internet Innovation Alliance, which represents AT&T along with telecom equipment makers like Alcatel Lucent, Ciena and Corning, says it makes sense. "Requiring Big Tech to help close the digital divide is an obvious and attractive solution to the Universal Service Fund (USF) crisis," former Rep. Rick Boucher, an honorary chair of the organization, said in a statement. "It makes sense for the Amazons, Googles, Apples and Facebooks of the world -- that depend upon and benefit from Americans being online -- to back efforts to achieve universal broadband. It's in their interest, as their user bases would be bolstered."

But it doesn't make sense in the broader context of the fact that US taxpayers have thrown countless billions already at telecom giants for fiber networks that mysteriously only wind up half deployed. That's not Amazon, Netflix, or Google's responsibility to fix, however much justified animosity you may have at these companies for dodgy behavior on numerous other fronts.

The story ends with Carr getting the last word about how he's just looking out for the little guy. But there's been no indication, at any point in Carr's long history of questionable claims, that this is actually true. What's more likely is that companies like AT&T, worried about the Biden broadband plan driving competition into their markets, want to capitalize on the animosity toward "big tech" by once again trotting out a lame argument that the real solution lies not in holding legislators, regulators, or telecom giants accountable for years of fraud and wasted money, but in taxing Silicon Valley. And Carr, never one to see a telecom argument he doesn't breathlessly support, was more than happy to amplify it.

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Filed Under: big tech, brendan carr, fcc, free ride


Reader Comments

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  1. icon
    Samuel Abram (profile), 8 Jun 2021 @ 9:41am

    So what you're saying is…

    reply to this | link to this | view in thread ]

  2. icon
    Samuel Abram (profile), 8 Jun 2021 @ 9:44am

    So what you're saying is…

    Oops, hit enter too soon.

    Ahem.

    So Karl, so what you're saying is, the Telecoms think they should extract rents when they don't even own the land from which the rents are extracted?

    That's beyond chutzpah. There should be a new Yiddish word for it: "iberchutzpah". That's so much chutzpah that even the child who killed his parents and begged the judge for mercy because he's an orphan thinks it's too much.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, 8 Jun 2021 @ 9:50am

    There's a simple answer.

    Google can charge AT&T a fee to access google.com.

    I'd say $200 billion a year payable in monthly installments with a $2 billion late payment fee, and $1.5billion 'convenience fee' if not paid in cash should be sufficient.

    reply to this | link to this | view in thread ]

  4. identicon
    Pixelation, 8 Jun 2021 @ 10:08am

    Re:

    Don't forget to add the "Broadcast TV" fee.

    reply to this | link to this | view in thread ]

  5. identicon
    Rocky, 8 Jun 2021 @ 10:15am

    Re: Re:

    Oh, that means they also can add the surcharge fee fee.

    reply to this | link to this | view in thread ]

  6. This comment has been flagged by the community. Click here to show it
    identicon
    hmmmmmmmmmmmmmmm, 8 Jun 2021 @ 10:32am

    so....

    if an entity provides water service to the community - maybe thru a 8' inch water main.. and one specific user starts using a volume of that water that depletes the available water to everyone else - you're position is that since that user pays a "water bill" that he/she is not responsible for upgrading the water main even though their use of it causes the problems.
    /smh

    reply to this | link to this | view in thread ]

  7. icon
    freakanatcha (profile), 8 Jun 2021 @ 10:35am

    Just when you think AT&T can't get greedier...

    Since AT&T's "pipes" are worthless without content, just for fun, maybe Google or Amazon blocks AT&T users for a couple of weeks, and let AT&T deal with the fallout from angry customers.

    reply to this | link to this | view in thread ]

  8. identicon
    bobob, 8 Jun 2021 @ 10:35am

    Why should anyone pay for the telecoms to downgrade their service? In particular, AT&T suddenly cut my internet service two weeks ago. Their service reps couldn't say why. Apparently I was part of a "forced migration" to their "new gigabit (or whatever) fiber." (I aalready had fiber TO the house. But, they had to run fiber THROUGH the house. In addition, they couldn't use the fiber that was already running underground TO the house, but instead, had to string the fiber on poles, staple it along the house to the same exterior box.

    What was the result? The service is worse. I kid you not. Their pre-upgrade fiber and copper through the house was MUCH better. Half of the time, if I want to watch netflix on my ipad, it's impossible because the bandwidth is insufficient, it starts buffering and then quits. (I only watch netflix about once a week and don't even have a television package, so they have no "excuse" to be throttling me in particular.) Text messages get hung up when sending them. There is not one single way in which this "forced migration" was anything but a make work project for shittier service. About the only plus is that the technicians who did the work were nice and were honest about why I lost internet service for 3 days.

    The telecoms have it backwards. The telecoms ought to be paying big tech. If it weren't for big tech, there would be nothing to draw a profitable number of people to purchase internet service. I do have a choice though <cough>. Verizon. Then, I could everything done over again without gaining anything but a different way to be lied to and different "miscellaneous fees" tacked on to the bill to make the service seem less expensive by the marketeers.

    reply to this | link to this | view in thread ]

  9. icon
    Stephen T. Stone (profile), 8 Jun 2021 @ 10:35am

    so....

    otherwording (or in-other-wordsing) — noun

    1. Summarizing a point of argument in a way that distorts the point into saying something it does not and attributes the false interpretation to the person who raised the original point.

    2. A blatant attempt to make winning an argument easier for someone who is out of their depth in said argument.

    Example: You will often find the phrases “in other words” or “so you’re saying” at the beginning of an instance of otherwording.

    See also: strawman; your post

    reply to this | link to this | view in thread ]

  10. identicon
    anon, 8 Jun 2021 @ 10:43am

    Mid-size ISP's perspective.

    I work at a mid-sized ISP, and google is great for us. For external transit we pay initial connection fee, plus a monthly related to peak bandwidth cap. Meanwhile, with google, since we're in the same site, it's a minimal (relatively speaking) cost from the building/site to get the cross connect; beyond that, we're both happy with non-cost peering. The traffic we share we'd both otherwise be paying 3rd parties to send/receive.

    That's 10GB we don't need to pay to send via external transit; we both save money. And it gives our shared customers (well, our customers are google's product) a better experience with lower latency and good bandwidth. When this 10GB starts regularly going past 8GB we'll pick up a second one for the cost of site cross connect, and "expense" of having the extra 10GB link.

    FB traffic isn't really that high for us. We have 2x 10GB links to our Netflix cache box. Really, the investments from the larger "freeriders" are great for ISP's. Well, ISP's that actually want to play ball and give a great experience, rather than F their customers.

    reply to this | link to this | view in thread ]

  11. icon
    ECA (profile), 8 Jun 2021 @ 10:48am

    So

    the top of the internet corps are having a problem with?
    Contracts and ENOUGH servers to CHARGE big corps MORE MONEY?
    Arnt they willing to install their OWN server farms and Create their Own business on the internet? Not really.
    They have this great idea to BUY an instant business that will Work under Their idea of doing business. Cut everything fromt he corp to make More money then they were before. NOT understanding that, That corp already did/does what it can to cut every corner.
    Or over paying the management, so they dont have any more profit.

    reply to this | link to this | view in thread ]

  12. icon
    techflaws (profile), 8 Jun 2021 @ 10:57am

    Re: so....

    So, bits are a limited supply, such as water? Really?

    reply to this | link to this | view in thread ]

  13. icon
    James Burkhardt (profile), 8 Jun 2021 @ 11:00am

    Re: so....

    For the other poor souls who can't articulate what is wrong with this analogy:

    Your analogy uses the wrong entities. You analogy actually describes a scenario Techdirt has gone the other way on: High bandwidth usage by consumers. Techdirt has repeatedly noted that if users in the top 1% of usage are so excessive that it impacts network performance (congestion) and you need to charge them more, you can push them to business class usage rather than shift the entire network in a geographic area to capped usage plans. That if the concern was overusage of bandwidth (congestion), business class pricing makes more sense than capped and metered networks because capped and metered networks do not serve to reduce moment to moment congestion, just like no amount of limits on how much I am allowed to drive each month change when I have to drive to work and therefore my contribution to morning traffic.

    But the situtation we see with Netflix (as an example) and comcast (my ISP) is different. I pay comcast to connect me to the internet. The only reason comcast gets my money is to return my requests for data from the internet.

    Netflix Pays Cogent to deliver data at the request from users on other networks.

    Netflix isn't using Comcast's bandwidth. I am. Aside from all the work Netflix does to reduce bandwidth strain, any strain on the Comcast network is on me, not Netflix. Asking Netflix to pay to access Comcast customers is asking Netflix to pay Comcast to fulfill the data request Comcast was already paid to deliver. Its classic double dipping. That's like me paying Fed Ex to ship my purchase, and then charging the store to deliver the package. That's the analogy. If the shipping charges they charged me are insufficient, they should raise prices. The issue is that asks uncomfortable questions about their "poverty".

    reply to this | link to this | view in thread ]

  14. identicon
    bobob, 8 Jun 2021 @ 11:08am

    Re: so....

    so...

    Aside from your argument containing multiple logical fallacies, (like argument through analogy, strawman,etc.), let's take the analogy. Yes, if the folks delivering the water tell the customers they can supply X amount of water to their residence, they are responsible for being able to supply X amount of water to their residence. If they miscalculated the size of the pipes required to deliver it, it's their fault. At least in my area, this doesn't seem to be an issue, since apparently, the city takes their responsibility to ensure they have the pipes and water pressure up to par and I see them actually replacing mains when needed. I have yet to have a problem with getting the water I'm supposed to be able to get.

    On the other hand, internet service providers blatantly advertise far more than they can deliver. What does "Up to 1 Gbit/sec" mean in any meaningful way? 1 bit/s is "Up to 1 Gbit/sec." Are you a shill for the telecoms or do you just like logical fallacies? (There's a logical fallacy in that last statement. see if you can identify it.)

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, 8 Jun 2021 @ 11:10am

    This looks to me like another cautionary tail about how every day is another chance to not add more reasons to believe you are a lier and/or moron.

    Too bad Carr did not seem to get the moral of the story in any of it's other, innumerable tellings.

    reply to this | link to this | view in thread ]

  16. identicon
    Anonymous Coward, 8 Jun 2021 @ 11:22am

    Re: so....

    No, this would argue that the fresh water treatment plant should be paying the water main.

    Whether that water is being used by one person, or one thousand people, is not considered at all in this article.

    reply to this | link to this | view in thread ]

  17. identicon
    Anonymous Coward, 8 Jun 2021 @ 11:47am

    Re: so....

    so, if any of that reflected any part of reality ever, you might have the beginning of a point with which to work.

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, 8 Jun 2021 @ 12:41pm

    Another sign of lack of competition

    I think it's awfully telling that none of the "Big Telecom" ISPs have pointed out that all of their customers pay for their internet access and anyone not paying is quickly and mercilessly disconnected.
    But, why would they pass up a chance for free press and $money$

    I daydream that I'm CTO at one of these companies being given a "free ride" and I call up my ISP and let them know I'll be changing to another unless they try to get out some kind of press release about this 'free ride' crap being just some BS to get free money...
    but even if I were, choices are limited... and I expect no one really gets to do things like that anyway...

    reply to this | link to this | view in thread ]

  19. identicon
    Anonymous Coward, 8 Jun 2021 @ 3:30pm

    Re: so....

    What’s the price of an aquifer in China got to do with the internet?

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, 8 Jun 2021 @ 5:53pm

    Re: Re: so....

    When Richard Bennett can't even be bothered to log in to post, you know it's a terrible argument.

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, 8 Jun 2021 @ 6:28pm

    Re:

    The telecoms have it backwards. The telecoms ought to be paying big tech.

    How are the telecoms not included in the phrase "big tech"? They were at the forefront of technology for like 50 years—underground and wireless transmission lines, automated network control, etc. Do people think "tech" only refers to stuff developed in the last decade or 2? The word itself has basically been around for millenia (Ancient Greek "τεχνολόγος" / tekhnológos).

    reply to this | link to this | view in thread ]

  22. icon
    Scary Devil Monastery (profile), 10 Jun 2021 @ 6:39am

    Re: Re:

    "Do people think "tech" only refers to stuff developed in the last decade or 2?"

    To the people usually singing great laments over "Big Tech" that might as well be it.
    Clarke coined the phrase that any sufficiently advanced technology would be indistinguishable from magic and to all too many of the loudest decriers of "Big Tech" what they're REALLY screaming is various modern versions of burn the witch when confronted with anything invented after the 60's or so...

    reply to this | link to this | view in thread ]


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