Here’s Exactly How the Internet Is Now Under Threat

Obama’s FCC head Tom Wheeler talks candidly about the open internet — and why, in Trumpworld, four companies could lock it up.

Outgoing FCC chairman Tom Wheeler speaks with Susan Crawford at Harvard Law School on January 26th, 2017. (Photo by Daniel Dennis Jones)

When President Obama nominated Tom Wheeler as the 31st chairman of the Federal Communications Commission (FCC), some activists were wary because of his background as an advocate for cable and wireless interests. But as a friend of his, I was confident that he would be a strong leader, and he did not disappoint me. In fact, I consider Tom Wheeler the most consequential FCC chairman since the early 1960s, when a 35-year-old Newton Minow went to the Sheraton Park Hotel — to the lion’s den, the National Association of Broadcasters — and told those all-powerful broadcasters that they were supposed to be serving the public interest. For all the diversity of content that we have today, one can argue that in terms of concentrated power over communications, we’re not much different — four companies strive to dominate what we see and hear. As commissioner, Tom Wheeler told those four companies that they should be serving the public interest as well.

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On January 26th, I interviewed Wheeler at Harvard Law School, where I teach. It was the day the new administration announced his successor, who will have very different priorities. We talked about net neutrality, telecom mergers, high-speed access, and the dangers that lie ahead under the next administration. Below is an edited transcript of that conversation. You can see the entire interview here.

Susan Crawford: What’s it like to be the FCC chairman, then to walk out and no longer be the chairman? What does that feel like?

Tom Wheeler: First of all, you get a long time. You get 77 days to work up to it. So it’s not a big surprise. You walk away with just an incredible gratitude that at a time of such incredible change in how Americans communicate, you got to be the guy who sat there and dealt with how Americans relate to those changes.

Because the people who say the problem is government are so wrong — the government is the people. It’s where we come together to solve our common problems. It is a messy process, and it’s a painful process, but if we can’t work things out there, we’re in a whole hell of a lot of trouble.

You said recently, “Those who build and operate networks have both the incentive and the ability to use the power of the network to benefit themselves, even if doing so harms their own customers and the greater public interest.” We’re hearing from the Trump administration that they’re looking forward to getting rid of 75 percent of regulations. Their idea is that regulations inevitably dampen innovation and investment.

I made the same argument when I was an advocate. Let me tell you a story. I was CEO of the Wireless Industry Association and I was proud of the job that I did. But the least proud moment of my public policy life was when I opposed the commission’s efforts to allow people to take their phone numbers with them when they switched from, say, AT&T to T-Mobile. [When arguing against this policy,] I couldn’t go out and say, “We think it’s a really bad idea because in the current situation consumers are trapped with their carrier and can’t leave us without giving up their phone numbers.” That’s not a real winner. So the argument I made was, “This is going to take money that should be spent on infrastructure and expanding connectivity.”

I regret that argument. Saying, “It is going to slow down our incentive to invest,” is everybody’s first line of defense. It’s balderdash. The reason you invest is to get a return. Companies don’t say, “Well, I’m not going to invest because I might trigger some regulations.” Their question is: “Am I going to make a return off of this?” Broadband is a high-margin operation. You can make a return off of it.

The facts speak for themselves. Since the Open Internet rule was put in place, broadband investment is up, fiber connections are up, usage of broadband is up, investment in companies that use broadband is up, and revenues in the broadband providers are up, because people are using it more.

As a student of the Civil War, you remember that one of the big prizes of 1863 was Chattanooga: railroad hub, three railroad lines, two big rivers, two mountain ranges. What role did Chattanooga play in your tenure?

My good friend, Susan Crawford, said to me when I took this job that I should bear three things in mind. I kept these three things in a list on my desk. The first was to return to the regulatory ideal — that there is a legitimate role for regulation to benefit the broad scope of the population. The second was that we should have a legitimate credible definition of what broadband is, because broadband used to be defined as four megabits a second. That’s hardly broadband. The third was to tackle an outrageous practice that the internet service providers, the telephone companies, the cable companies, were doing — they were getting state legislatures to pass laws that prohibited cities in that state from building their own broadband network to compete with. I thought, “Hey, if the people through their local government decide they don’t like the quality of service that they’re getting, they ought to be able to organize through their government and say, ‘I want something better including the government building it.’”

[That’s where Chattanooga comes in.] It was the [classic] case study, a Tennessee law [that stopped that city, and every other one in the state, from expanding its municipal network]. So we sued Tennessee and North Carolina, making the argument that this was an overreach of the states’ authority. Unfortunately, the Sixth Circuit disagreed with us.

The great thing is all the hubbub about this woke up an awful lot of cities, and there is more activity to build competitive broadband at municipal levels than there ever has been. You know what happens when cities build? What happens is when they decide to build, the cable company decides to go faster and expand their service. I love this thing called competition.

The legislatures of Missouri and Virginia just introduced new snarling bills along these lines. What would you tell a earnest state legislator today about those bills?

That the people do have a right to come together and say, “I want something better for my city.”

The second political point that I would make is it’s not really the Chattanoogas where this is a big challenge. It’s the [more rural] areas where the people who voted for Donald Trump do not have access to the internet and are not getting access from the existing companies. They’re the ones who are fed up with the system.

I think that one of the messages that people were voting for in this campaign is, “I want power back to me.” The whole thing about draining the swamp is get the power back. If the government closest to the people is saying “Our people would like to have better broadband,” who’s to say no?

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In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?

It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.

So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices.

Because we’re talking about one sixth of the economy. More importantly, we’re dealing with the network that connects six sixths of the economy.

You may not have heard, but there’s a new chairman of the FCC — Ajit Pai, who was one of the commissioners. According to Free Press, he’s “been on the wrong side of just about every major issue that has come before the FCC during his tenure. He’s never met a mega-merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an inveterate opponent of Net Neutrality, expanded broadband access for low-income families, broadband privacy,” all kinds of issues. I listened to a radio interview of you just a couple of days ago, when you said that Commissioner Pai canceled all the meetings that you set with him.

True. The FCC is a five-person commission and the chairman sets the agenda, but there’s four other commissioners and it takes three votes to do anything. When I came in, I set up with each commissioner a date every other week — an hour for the two of us just to sit without staff and talk. For the last 18, 24 months he canceled every meeting. It’s hard to work for consensus when you won’t sit down with each other.

Let’s talk about the AT&T-Time Warner merger. There are two Donald Trumps on this. In October he said, “Deals like this destroy democracy.” Then last week, after meeting with AT&T, he said, “I haven’t seen the facts. We’ll see.” What’s likely to happen with that merger?

AT&T has now designed the merger to avoid the FCC. I think the commission probably still has some jurisdiction but I don’t make those decisions anymore. As somebody said to me the other day, “I have lost the Windex to my crystal ball.”

The AT&T-Time Warner Merger Must Be Stopped

What are you most worried about? What should people be worried about? And if they’re worried about things like concentrated markets, high prices, and inadequate service, what should people be doing?

Networks have always been crucial and broadband networks will define the 21st century. How we connect defines who we are both commercially and culturally. Whether or not those networks are going to be controlled on a gateway basis by essentially four companies is an existential question for American commerce and culture. I am worried about what that future looks like.

What is amazing to me is how the Commission and seemingly Congress want to do things on behalf of these four companies, things that will have an impact on tens of thousands of other companies and millions of consumers. I just don’t think the debate has gotten to the point where people recognize this. We’re talking about fewer than half a dozen companies here.

[Audience question] What do we need to do to protect net neutrality?

Two things. One, we need to be heard but, two, we need to be heard in different ways than before. We had 3.7 million emails and comments to the Commission [when it successfully pushed through the Open Internet order]. They were pushing on a door that was already open. The door is locked, latched, bolted, and welded right now.

So what is the battering ram? Madison had this great line in Federalist 10 where he said that ambition must be made to counteract ambition. This was the whole concept of how the government was set up. Economic ambition is what is driving these handful of companies. There must be economic ambition that counters them. We need to hear the voices of those that’ll be affected. Yes, the small startups, but also the big companies. GE, GM.

Let’s go through a few things [that regulatory authority over internet service providers will affect]. Artificial intelligence and machine learning involve the connectivity of all kinds of database resources. If that connectivity has to worry about gatekeepers, what happens to AI? What happens to the Internet of Things? Who will be deciding which things get connected and on which terms? What if one of the network providers says, “Wait a minute. I like my things better and I’m going price them differently because I am this competitive provider of this service.” We see they already do that, with video. This is not a hypothetical. We need to be making sure that the companies that are affected are delivering the message, because I think that’s what Congress would be most responsive to.

These are ultimately extraordinarily personal issues. People’s phones are very close to their hearts. They would give up food before they give up a cell phone. Yet people aren’t engaged in the policy behind this technology they need and love. How can we focus on these issues in a more dramatic way, so we get the resistance going?

I’ve just sat here and given you a wonk’s eye view of telecommunications policy. I love my wife dearly and she loves me but I can’t hold her interest across the dinner table on these topics. How in the world do we get ahold the interests of the vast majority? We need to get out of our technocrat mode and into making the point that it’s the Trump voter who has the worst internet experience, and that broadband is the key to getting an education to be able to do your homework, the key to being able to get a job, the key to be able to interact with the world around you. And these people have been denied it.

Why? Because we built things around four companies. We need to be getting the story out. Let’s talk not about the networks. Let’s talk about the network effects.

Let me tell you two great stories and then I’ll shut up. I was in McKee, Kentucky, one stop light, 900 people. As a result of the Obama stimulus it has fiber to every home.There are more people employed today in McKee than there were three years ago. From there, you go down the road to Pikesville — another town with fiber — where I met with a bunch of ex-coalminers who are now coding for Apple and others. These guys who had the gumption to go way underground and work on the coal face now have the gumption to say, “I’m going to take charge of my life in the new economy because there is a fiber connection allowing me to do it.” Those are the kinds of stories that we have to be telling. Because how we connect defines who we are.

Who Is Killing the Towns of Western Massachusetts?

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Here’s Exactly How the Internet Is Now Under Threat was originally published in Backchannel on Medium, where people are continuing the conversation by highlighting and responding to this story.