from the Google-is-the-real-villain dept
For years telecom monopolies have downplayed the lack of competition in the broadband sector, and the chain reaction of problems this creates for everybody (from privacy infractions to net neutrality violations). At the same time, large ISP lobbyists (and the regulators, politicians and policy flacks paid to love them) have insisted that it’s Silicon Valley companies the public really need to worry about. As a result, ISPs like Comcast and AT&T routinely insist that we need new regulations governing companies like Google and Facebook, but entrenched natural monopolies should be allowed to do pretty much whatever they’d like.
This of course requires you ignore a few things. One, that the lack of competition in broadband makes the two sectors an apples to oranges comparison. Customers frustrated by Facebook’s bad behavior can vote with their wallets, something most Comcast customers can’t do. You’re also supposed to ignore the fact that large ISPs are simply trying to saddle Google and Facebook with additional regulation because they’re increasingly trying to challenge them for advertising revenue in the video and media space.
This underlying narrative is constant, whether it’s FCC boss Ajit Pai weirdly demonizing Netflix, to telecom-industry funded smear campaigns that try to suggest Google is a nasty freeloader that doesn’t pay for bandwidth. Speaking at a sector trade show in Ireland this week, former FCC boss turned top cable lobbyist Michael Powell dusted off this rhetoric and turned up the volume. He began by insisting the quest for a healthy and open internet was “irrelevant” because the real villains are Silicon Valley companies hungrily gobbling up “mindshare”:
“Michael Powell, president of NCTA-The Internet & Television Association, told the crowd at a Cable Congress Dublin event in Ireland Tuesday (March 6) that the network neutrality debate sucks up money, resources and “mindshare,” but is increasingly an irrelevant discussion.
What isn’t irrelevant, he suggested, is for governments in the U.S. and abroad to start looking at tech companies/edge providers like Facebook, their size and power, and the harm they can do to mental health by keeping consumers chasing the dopamine rush of “likes” and “streaks” as a way to glue them to devices.
Right. So again, notice how some of the most despised and least competitive companies in America aren’t a problem and should be free from regulation, but Facebook and Google (which again, consumers can choose not to use) require vast expansions in regulatory oversight. Powell, whose tenure at the FCC consisted of comically denying any competition issues whatsoever, repeatedly called out Apple, Facebook and Google as the worst sort of villains; villainy that somehow, magically, makes the whole net neutrality conversation moot:
“They have the size, power and influence of a nation state. Antitrust policy has barely begun to address how to check this power to protect consumers and healthy competition.”…He called the net neutrality debate “mindless trench warfare” and said that, as in the First World War, Democratic and activist cries that the battle for an open internet was a war to end all wars would prove wrong.
“Net neutrality policy does not remotely address the issues companies and consumers are facing today and likely will face in the future,” Powell said. “Put simply, net neutrality is deeply rooted in engineering, consumer expectations, corporate business models and the norms of internet activity. It is firmly entrenched, and I don?t believe the open internet experience will change, whatever the outcome of the current debate.”
So one, Comcast owns NBC and is considering a $31 billion acquisition of European satellite TV provider Sky, so it’s not clear Powell’s the guy to turn to when talking about media consolidation worries. Two, the idea that the “open internet experience” won’t change if ISPs are successful in their current bid to gut FTC, FCC and state authority over natural monopolies is simply comical. History is filled with endless examples of how a lack of competition or reasonable regulatory oversight of natural monopolies results in higher prices and worse service. In telecom this lack of competition is already profound, routinely exemplified by everything from privacy violations to net neutrality infractions.
That’s not to say that companies like Facebook and Google don’t have their own universe of issues. Both were totally absent from the latest net neutrality fight as they slowly but surely shift from innovation and disruption to turf protection. And there’s countless conversations to be had regarding their privacy practices and the country’s ugly little disinformation problem.
But despised monopolists like Comcast calling for hyper-regulation of companies they’re trying to compete with is pretty damn hard to take seriously. When Powell wasn’t busy trying to insist that companies like Facebook were to blame for the nation’s mental health issues, he was was hypocritically giving the audience lessons on anti-competitive behavior and a respect for consumer privacy:
“Our governmental authorities need to get a handle on what kind of market power and harm flow from companies that have an unassailable hold on large pools of big data, which serve as barriers to entry, allowing them to dominate industries throughout the economy,” he said. “For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging,” he said. “They dominate their core business, and rarely have to foreclose competition by buying their peers. “Competition policy must scrutinize more rigorously deals that allow dominant platforms to kill competitive technologies in the cradle,” he added.
If you’ve watched the companies Powell represents do business, that’s pretty funny. As is Powell’s claim that Silicon Valley giants have too much influence over government, a claim made just a few months after revolving door regulators sold out the public on net neutrality:
“We have reached a point where governments can no longer coddle and cater to tech companies,” he said. “They have become too large, too influential and too indispensable to live above regulatory scrutiny. As a start, we need to reject the ‘do no evil’ fairytale.” These companies must be brought back down to earth and regulators must recognize them for what they are: profit-maximizing corporations that have a strong incentive and ability to pursue their own self-interest over the interests of society and consumers.”
Oh no! You mean just like Comcast, and Charter Spectrum? In the heads of many telecom executives, the quest for net neutrality (despite having massive support from the public) was all one mean cabal by Google designed to ruin their good time. But despite this breathless concern for consumer and market welfare, this hysteria serves only one real purpose: to saddle companies Comcast wants to challenge for advertising “mindshare” with numerous additional regulations, while leaving entrenched telecom monopolies free to run amok.
Filed Under: antitrust, broadband, competition, michael powell, net neutrality, regulation
Companies: at&t, comcast, facebook, google, ncta