Posted on Thu 23 November 2017

neutral restructuring

It’s not enough that Net Neutrality be enforced. That’s just a basic requirement to keep corporations from completely exploiting their customers.

What would a good long-term solution look like?

We can look at history. In 1982, the eight-year antitrust suit against AT&T was ended by the breakup of AT&T into multiple entities, seven of which had a regional infrastructure and one of which held on to long-distance, research, and computer hardware and services. In addition, the de facto monopoly was broken by requiring transport service to be available at a wholesale rate to any qualified party.

The result was that from 1982 through 1996, the country had real competition in telecom services of all kinds. Prices dropped, new services became available, and small companies with good ideas became medium and large companies.

What could we do similarly? In the vast majority of residential places of the United States, there are a maximum of four Internet Service Providers: a cable company with DOCSIS cable modems, a phone company offering mostly inferior DSL service, and two national satellite Internet companies, Hughes and Exede, which both provide expensive, slow, and severely capped data services. In a few places, you can find competing cable-equivalent services, usually a cable co and Verizon’s FIOS service. In still fewer, there are two competing cable companies.

Any improvement in competition is good: in areas where Google introducted its fiber network service, local cable companies increased service offerings or lowered prices or both — but only in neighborhoods where Google was actually providing service.

Let’s consider a structural solution. Some situations are just more efficient with monopolies: providing electrical power, for instance, or water. We can tolerate those monopolies by properly regulating them. Those corporations don’t make the huge margins that Apple and Facebook do — but they are also guaranteed to have predictable profits, every year. Utilities are generally well-managed and socially responsible businesses. Because they go on for decades, they can hire for long horizons. People can have careers, get meaningful promotions, and receive pensions after long service.

Let’s make the US Internet into a set of utility companies, providing data transport services - what Internet engineers call layers 1, 2 and 3. What these companies would not do — the main break-up — is provide content. No vertical integration. No video-on-demand, no television programming, no VOIP services, email, web hosting, marketing, whatever: all the value-added stuff has to be done by third parties who do take on the risks and reap the rewards of being in a competitive market sitting on top of stable infrastructure. Larger customers are used to pulling these services out of bundles and either handling them with internal infrastructure or paying for expert third parties to perform them; individual customers are becoming used to multiple provider systems. Do you use GMail rather than a cable.com email account? Do you subscribe to Netflix and use it more often than a Video-on-Demand movie service? That’s what this future would hold out as the normal state of affairs.

Unlike the water and electrical infrastructure of the country, standards are still in flux. However, it wouldn’t take much effort to establish an upgradable infrastructure that could be managed all across the continent. Some of it would simply be defining standards and expectations; some of it would require planning for next-generation infrastructure that we can only dream of having twenty years from now. But by recognizing these problems today and preparing to solve them, we will be able to make it work.


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