Next Thursday, the Federal Communications Commission is scheduled to vote on rules, backed by President Obama and FCC chief Tom Wheeler, that would treat broadband Internet providers like traditional telecom utilities. Senator Ted Cruz has dismissed the idea as “Obamacare for the Internet.” And that was a high point in the debate. In a new video from a group called Protect Internet Freedom, a hunky installer from the local broadband provider arrives on a young woman’s doorstep. Flirty looks are exchanged, until a nerdy government regulator barges in and spoils everything.
By reclassifying firms like Comcast and Verizon as utilities, the FCC would empower itself to uphold net neutrality — that is, to keep telecom giants from slowing down Internet content from sites that decline to pay up. Opponents argue that, should the FCC plan prevail, a “Department of the Internet” will get between consumers and the broadband service they need.
Yet in many markets around the country, including most of the city of Boston, there’s already a vast bureaucratic entity dictating terms to Internet users, and it isn’t the government. Under current standards, 82 percent of Americans have access to at most one broadband provider — generally, a cable company.
Before Jascha Franklin-Hodge was Mayor Marty Walsh’s chief information officer, he was the co-founder of an Internet company that happened to be moving its Boston and New York offices at the same time in 2013. In New York, where most neighborhoods have multiple big-name providers vying for customers, Franklin-Hodge’s company could get 300-megabit-per-second service from Verizon’s FiOS service for $265 a month. Its best option in Boston’s Leather District, for slower 200-megabit service from Comcast, cost $2,000 a month.
A rival cable firm, RCN, covers a few parts of Boston, and a smattering of other firms, mostly niche players catering to business, sell broadband as well; Franklin-Hodge’s old company got eye-popping price quotes from some of them, too. What’s lacking in most of the city is the kind of street-by-street, customer-by-customer brawl that forces costs down and prods technology forward. “There’s absolutely a whole lot of people who are considered competitors,” says Brough Turner, founder of the Allston-based broadband startup netBlazr, “and yet there’s no real competition.”
Cable companies owe their dominance in broadband to pay-TV franchise agreements they struck with local governments in the early 1980s, when not even science fiction writers foresaw our collective appetite for high-definition cute-kitten videos on demand. Years later, when existing pay-TV connections proved a reliable way to carry broadband Internet, cable companies were like farmers who’d unwittingly bought cropland atop vast deposits of oil.
Left to their own devices, the broadband incumbents may not rush to bring better technologies to consumers. Verizon, which brought its FiOS fiber-optic network to homes in upscale Boston suburbs, announced in 2010 it would stop building out FiOS nationwide — and cut a marketing deal with Comcast the following year.
While the FCC’s proposed rules could theoretically lead to rate regulation and other excesses, they will make it harder for a provider like Comcast, which owns NBC Universal and part of Hulu, to give customers faster access to that programming than to an obvious competitor like Netflix.
If anything, though, the FCC’s plan doesn’t go far enough. It tries to make up, through regulatory oversight, for a basic flaw in the market’s structure: In Boston and other communities, consumers who don’t like the way their broadband provider does business have few practical options.
In a parallel world, the commission — along with Congress and federal and local regulators — would focus on fostering competition among broadband providers at the consumer level. There are models: In the energy field, states such as Massachusetts have restructured their markets, leaving monopoly utilities with control of power lines but giving consumers a choice of where to buy the electricity. In 1982, a federal consent decree broke up AT&T’s vertically integrated phone monopoly , unleashing a technological revolution.
It’s unlikely today’s more politicized judiciary and regulatory system could pull off such an operation, especially in the face of so much sophisticated lobbying and calculated obtuseness. (Email subject line from Nebraska Senator Ben Sasse: “Putin and Obama in charge of the Internet?”) Trying to coax forward-looking Internet policy from today’s Washington is like getting brain surgery from a doctor wearing ski gloves; the outcome will leave a lot to be desired. Protecting net neutrality from the whims of today’s telecom giants is important, but consumers need the freedom to take their business somewhere else.