Review: Susan Crawford’s “Captive Audience” Prescribes the 19th Century to “Save” the 21st Century Internet

by Mike Wendy on December 15, 2012

Ex-Obama official and Internet activist, Susan Crawford, is in the news of late. She has written a book, entitled “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age” – an instruction guide of sorts for legislators, policymakers and anti-property misanthropes on how to hamstring successful communications companies in the 21st Century so that they better and more fairly serve society.

Crawford’s thesis runs like this: The “pixie-dust” of communications competition has failed America’s Internet experience, and, consequently, America’s biggest cable companies have won the broadband wars.  Why?  Well, telecom companies like Verizon have simply given up.  They just won’t expand the only truly useful, speedy technology to the home – FiOS / fiber – because it’s expensive and risky, and they’d rather focus on wireless broadband instead because it’s more profitable.  But, lo and behold, wireless broadband isn’t really fast enough to be of any social good.

So, Americans are in a world of hurt, being held hostage to essentially one real broadband choice – Big Cable – which is increasingly culturally bereft and commercialized, unacceptably vertically integrated, and more expensive than it needs to be.  Moreover, and perhaps most importantly to the author, America’s largest providers of Internet access (like Comcast, Time Warner, AT&T and Verizon), remain largely out of the grasp of regulators, essentially free to lock consumers into profit-harvesting capture.

For the author, this portends disaster for America.  Affordable access by all to truly speedy broadband is akin to access to water and electricity.  Lacking this, Americans – especially those who are disadvantaged – will not only become less prosperous, they will become more unequal, too.

To rectify this crisis, America needs a new social contract for broadband communications.  So, not surprisingly, Crawford’s solutions rely on invasive government meddling and regulation of privately owned U.S. broadband markets to achieve this end.  Among other suggestions, she calls for more municipally owned or supported broadband operations; giving the FCC control over high-speed Internet access via telephone-like regulations; and separating system transmission lines from content.

As she sees it, if policymakers follow her prescriptions, privately owned Internet access companies will be no more than indentured servants to the public weal – basic utilities – and through this, we’ll not only save ourselves from becoming a technological banana republic, we’ll be free again.

Crawford harbors particular disdain for Comcast and Time Warner, holding out their government-approved growth as exemplary of the so-called crisis.  In Crawford’s estimation, the marriage of speedy broadband pipes and content, while certainly good for the companies’ profit margins, represents a false economy. For the author, this un-checked growth – allowing them to richly  “harvest” profit for shareholders – is especially symbolic of capitalism’s (and policymakers’) failure to shape the Internet in ways that benefit society.

Throughout the 300-plus-page tome, the reader is never far from being reminded just how poorly network providers serve society, as Crawford repeatedly demonizes the private property, profit, paychecks of CEOs and protected free speech of individuals and corporations that give us Internet access.  To this end, Crawford’s monotonous hectoring rarely strays from her underlying admonition: Broadband networks are public goods; they’re just too important to be left in the hands of private property holders and subject to the unregulated flow of the free marketplace.  Americans deserve better. So, to get there, state-shackled communications markets remain the only real answer to ensure that Americans get all the digital broccoli they need.

Sadly, this 19th Century view of world has prevented Ms. Crawford from seeing the true deregulatory success story that’s emerged over the past 15 years.  Quite simply, Americans have a ton of excellent broadband choice.  And, satisfied, they’re making more use of it every day.

Since 1996 – when government-sanctioned communications monopolies were essentially outlawed by Congress and deregulation began – figures show that more than $1 trillion of private investment has flooded onto America’s broadband communications landscape.  As a result, in any given market, broadband access is universal.  In fact, 99% of Americans can access at least one flavor of facilities-based broadband – be it cable, DSL, fiber, cable-fiber hybrids, satellite, broadband over powerline or wireless services.  Over 80% of America has at least two broadband choices, with these numbers growing daily.

Wireless broadband has been particularly explosive, with nearly 70% of the world’s LTE subscribers coming from America.  Overall, wireless’ growth has been propelled by over $25 billion in wireless infrastructure investment last year alone – a number bigger than similar investment in the 15 largest European Union economies combined.

This market-guided expansion has had profound, positive impact on the Internet ecosystem.  As U.S. broadband infrastructure has advanced and become faster, it’s helped forge whole new industries, 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 government-cited estimates, has driven 15% of our GDP growth since 2004.  Moreover, it’s kept Americans competitive through the global downturn.

Could this Internet success story have occurred in a heavily regulated, 19th Century model as advocated by Ms. Crawford?  In a word – no.  The pro-consumer growth of the Internet pie happened via a model almost diametrically opposed to Crawford’s hyper-regulatory urgings.

In reading “Captive Audience,” it becomes clear that Crawford’s thinking suffers from the myopic belief that today’s communications marketplace is frozen like a sepia-toned snapshot, lodged in the depths of a long forgotten shoebox, hidden in the corner of an unfrequented closet.  That broadband winners now have won the jackpot for all of time.   And, that pro-consumer change can only occur if foisted upon market leaders by “progressive” regulation.

That notion is plainly false.

America’s broadband market is vibrant, resilient and dynamic.  It is far from unregulated, too.  Among other checks, it is guided by the advance of technology, consumer transparency tools, industry best practices, ecosystem symbiosis, ecosystem competition, and present laws that police against actual consumer harm.  It does not sit in stasis, as Crawford implies.  Rather, it lives and breathes, flexibly serving the public interest to deliver what we need.

Crawford makes much hay about over-clocked, taxpayer-paid broadband alternatives as being key to browbeating private broadband providers into delivering what Americans truly need.  But quite simply, everyone does not need wired, gigabit broadband service to enjoy the American dream; they are being denied nothing if they don’t have it.  It’s akin to demanding that everyone water his Victory Garden with a full-on fire hose.   Over-clocked equals overkill.

Still, consumers may someday want it.  And, that’s what the marketplace is for.  Unmolested, it remains far better at allocating resources in a way that more sustainably serves the public interest while also minimizing taxpayer waste and regulatory abuse by competitors and bureaucrats.

In the end, “Captive Audience” really reflects the wish of its author herself to capture and compel communications policy to her better mousetrap.   Like so many other progressive cants – such as those we hear surrounding global warming, campaign finance reform, or the food movement – the book’s main message ultimately calls for subservience to the state and better knowing regulators, who, under the guise of ensuring that communications markets are more fair, culturally diverse and accessible, use the coercive and distorting power of the state to control the delivery of the Internet to Americans.  If that means taking the private property of so-called monopolists, and shutting their mouths closed with regulatory duct tape so they cannot speak, then so be it.  In her big government view, the greater good demands no less.

This is not to say that government has no role in promoting the rollout of speedy Internet access to Americans.  For a variety of reasons – i.e., cultural, age, socio-economic, geography, education level, etc. – many Americans still either lack, or choose not to, access the broadband Internet, no matter how fast it is.  In this regard, government does have specific tools to help improve these numbers.  But, to suggest, as Crawford does, that the best way to get everyone online is through the heavy hand of Uncle Sam and his regulatory machinery, well, the facts belie Ms. Crawford’s techno-panic lamentations.

We have it good here in America.  At no point in our history have we had more affordable, effective and accessible communications choices – in all markets, such as content, applications, services, devices, computing power and network access.  The crisis of which Crawford writes isn’t.  Moreover, it will not be.

However, if we follow Crawford’s suggestions – and we go back to a 19th Century regulatory mindset to guide 21st Century communications services – then instead of receiving more choices, better services and greater value, we’ll actually find ourselves captive to the ossified, Bakelite-phone mousetrap of the past.

Brett Glass December 16, 2012 at 12:14 am

Even more galling than some of the points you mention — at least for me personally — is the fact that Crawford denies the existence of fixed wireless broadband providers as competitors. She can’t admit that we are, in fact, taking business from the cable companies because we offer superior service. Why? Because this would undermine the argument that leads to her predetermined conclusion: that ISPs should be profitless charities. And that Crawford’s benefactor, Google, should be the only entity to profit from the Internet.

Mike Wendy December 16, 2012 at 12:30 am

Very good points, Brett.

Gary February 15, 2013 at 6:47 am

If our private system is so good, why is it so much slower for most users than it is in “socialistic” countries. Why does the best service a private user can get in NYC cost 5 times as much as a similar service in, say, Seoul or Paris, and why isn’t that more costly NYC service as fast?

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