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When 'Saving The Internet' means 'Saving Crony Capitalism'

The curious case of the dog that didn’t bark

By Andrew Orlowski, 12 Jul 2017

Comment Entering the BBC today to talk about the net neutrality protests “supported by Amazon and Netflix and others”, I had a dilemma. How in three minutes can you give viewers worldwide a perspective which conveys that the motivations are valid – American fixed-line broadband is pretty rubbish – but what we were witnessing was the most powerful multinationals in the world flexing their muscles, a show of corporate strength. In Europe these companies are regularly said to be more powerful than any nation state.

Think about that for a second. If Pepsi Co launched a “day of protest” and wanted to enlist your help to weaken regulation, we’d give it short shrift. What if the banks, who sailed away from the financial crisis without too many scratches, had a “banking go-slow”? Literally: what if ATMs had spat out bills very, very slowly today, while the screen invited you to “show your support for open banking, and click here!” I can imagine the reaction. The fact that the giant internet platforms – Google and Facebook and Amazon – feel they can engage in it at all tells us something. (Even though access to cash is more important than access to Facebook: you can get by better, for longer, with no internet – apparently people once had to – than you could without cash.)

The figures are startling. Only last year did half of US census districts have access to two decent fixed-line broadband providers (defined as 25Mbps). That’s districts, not households. Eighteen months ago it was around 25 per cent.

The wrinkle is that I subscribe to neither of two strict views that I’m supposed to, in the childlike and simplified world of “net neutrality”. Fixed line looks like a pretty unhealthy market to me, and even if (as many predict) it becomes an anachronism in the 5G world, those pipes are still valuable, and still need to come under a regulatory regime, when telcos have become wholesalers to mobile companies. But then I don’t believe in unicorns, either. Google and Netflix don’t want to give you a cuddle, they want to accrue as much value as possible while shoving costs onto the other guy. One side wants happiness and goodness and the other doesn’t? Pull the other one, it’s got bells on.

So I characterised the issue as one where two powerful industries were squabbling over whose name is on the bill sent to customers. The internet needs both massive infrastructure investment – wireless has been good but fixed-line broadband is not great – and great services, on an open model where giant oligopolies can’t exclude smaller companies. Years ago Ted Dziuba here called it “capitalism disguised as civil rights”. Both telcos and Silicon Valley are really jostling for position as the Telecommunications Act is reopened. It’s just that in this game, one side has discovered a tool that no other corporate interest group has ever been able to enjoy before.

As David Lowery writes, in a piece explaining why he changed his mind about net neutrality, very few people realise that “the main financial backer of Fight For The Future is a mysterious firm based in an industrial park in a small town in Michigan.” It’s run by a lawyer who used to represent Google. Funding is largely through black boxes. The whole thing is about as spontaneous as the Theresa May Joke Book. The other group, Free Press, aligned itself with Google. In one year, Google provided half of the income of the Electronic Frontier Foundation, another “citizen’s group” in which Google lobbyists swarm over Brussels.

Corporate-directed NGOs are genuine new political phenomenon, and the low-engagement “clicktivists” or “slacktivists” who choose to take an interest in “digital politics”, rather than devote their idealism to tougher and more challenging issues – like class, or poverty – are also a new phenomenon. The two seem to go together. It’s easy to click an online petition and feel you’ve done your civic duty – you’ve Saved The Internet.

What perplexes and fascinates me is that far more effective action by consumers and citizens against US telcos – of the sort I have outlined many times over the years – never took place. It did in almost every other field of business. For example, the first tobacco lawsuits were filed by Mississippi’s feisty elected State Attorney General. Local action eventually spurred Federal agencies into action. Similarly in the wake of the dot.com crash it again was a feisty State AG – “one-man Torquemada” Eliot Spitzer, who pursued Goldman Sachs, Merrill Lynch and others while DC dozed. If telecoms companies are really as unpopular, then this should be a breeze. Elect an AG who will break the cosy relationship lawmakers have with lobbyists.

Another is switching. It’s in telco DNA, they hate churn. Acquiring new customers is expensive. Things were so much easier when they were exclusive regional monopolies, and every device plugged into the network was a Bell device. But when I suggested, two years ago, that readers get socially active and organise switching parties, enlisting friends and neighbours, the reaction was that it was too difficult. It means engaging in the kind of coalition building and arts of persuasion that every successful political campaign has had to do. It isn’t rocket science – it just means leaving the house.

It’s a historical quirk, and a consequence of the private Bell monopoly, that in the US telecoms regulation took the turn it did over the 20th century. Most other nations had a state-owned telco, so when liberalisation arrived there were few complaints about regulatory intervention: most undertook some form of local loop unbundling.

And that's the dog that didn't bark.

Digital virtue signalling

But imagine if grassroots activists had begun, in the same year (2003) that Tim Wu coined the phrase “net neutrality”, to campaign for local loop unbundling? I strongly suspect they’d have achieved some big milestones by now. Imagine what a nationwide grassroots campaign would have achieved by now? Instead, 15 years of energy and much idealism was diverted to “net neutrality”.

As if to emphasise the futility, today, both AT&T and Comcast joined the "Day of Action for Net Neutrality".

Well done, everyone. So don’t forget to click – it shows the world you are a good person, a very modern person, and that you deeply and truly care. ®

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