Shocker Alert: New York Times Writer Pines for “Progressive” 19th Century Communications Regulation

by Mike Wendy on November 28, 2012

The New York Times had a real doozey of an op-ed today – one longing for the good ole days of publicly funded canals, highways and airports, and urging heavy-handed government monopoly regulation of our communications networks to “improve” our supposedly crummy, cartelized communications marketplace.

It’s an instant New York Times classic.  You’ve got network providers equated to drug dealers.  We read how, through the supposed failure of the greedy U.S. broadband “cartel,” France and other under-developed countries are easily surpassing our (don’t say exceptional) country in broadband services and speeds.  We see the gratuitous connection of the “cartel” to the work of its ugly lobbyists.

In short, you’ve got all the progressive dog-whistle stuff that makes the New York Times so “great” for its readers.

And yet so atrociously wrong.

Let’s get real here.  Since 1996 – when government monopolies of communications networks were essentially outlawed by Congress – the growth of our broadband networks represents a truly remarkable American success story.  Over the past 15 years, industry figures show that more than $1 trillion of private investment – or about $73 billion per year – has flooded onto America’s broadband communications landscape.  Consequently, in any given market, instead of finding just plain old telephone service (POTS), broadband access is universal.  In fact, 99% of Americans can access at least one flavor of facilities-based broadband – be it DSL, cable modem, fiber, cable-fiber hybrids, satellite, broadband over powerline or wireless services – through any one of the 1,556 broadband providers across the U.S.

But wait, there’s more.  U.S. broadband infrastructure didn’t just change and become more innovative for itself, it helped forge whole new markets, too – such as the smartphone, the tablet, the cloud, Facebook, YouTube, Pandora, etc. – enabling an $8 trillion exchange of goods and services each year.

It’s also made the American worker among the most productive and competitive in the world, and which, according to some government-cited estimates, has propelled 15% of our GDP growth since 2004.

Could this Internet ecosystem success story have occurred in a heavily regulated, 19th Century model as advocated by the author?

No.

As FCC Chairman, Julius Genachowski, noted last year, “Over the past 15 years, the Internet has enabled as much economic growth as the Industrial Revolution generated in its first 50 years.”  Not coincidentally, this explosion occurred in an environment marked by deregulation – one which plainly, clearly, forever (one hopes) jettisoned 19th Century monopoly communications regulation.  Stated differently, that growth did not happen by virtue of heavily regulated POTS.

The progressive lament that the marketplace stinks is perennial as the change of seasons.  In their view, only through cartels of policymakers, wielding coercive regulations, can network providers be made to be “truly competitive.”

Gee.  That worked, didn’t it?

Not.

FDR-era laws, which codified 19th Century regulation, is no way to serve the public interest in the 21st Century.  Rather, as we’ve seen over the past 15 years, the advance of technology, consumer education tools, industry best practices, and marketplace guidance is far better suited to meeting the evolving needs of consumers than any “well meaning” law seemingly pined for by the author.

The market will continue to grow and improve, and consumers will continue to enjoy tremendous value and benefit from the Internet ecosystem, as long as we can avoid going back to the “progressive” 19th Century.

 

{ 2 comments… read them below or add one }

Gator Dad November 30, 2012 at 9:14 pm

Good piece. And through proposed taxation of the internet, we see another way for the government to regulate and control our cyber lives.

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txpatriot December 11, 2012 at 3:01 pm

I don’t know much about David Cay Johnston but I’ve heard of his book, “The Fine Print”. He may be a self-proclaimed expert in consumer issues, but he doesn’t know anything about telecommunications. Much of the telephone content of the book appears to come from that well-known Bell-basher, Bruce Kushnick.

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