The Brave New World of network monopolies
Let’s pretend the company that provides the land-line telephone service to your home institutes a new policy. That company also owns an airline called PhoneCo Airlines. So from now on, every time you try to call Southwest or American Airlines, your call will be rerouted to PhoneCo.
Unthinkable! you’d say. Beyond unthinkable! A phone company is a regulated monopoly, granted the privilege by government of no competition and assured profit. Their mandate is to provide the infrastructure and, for a regulated price, allow you to use it. Yet this regulated monopoly has acquired a business in what used to be the free market, and it is using its monopoly advantage against its competitors.
Welcome to the next big thing on the Internet. Almost all homes and businesses access the Internet through either a phone line or a cable line, both regulated monopoly franchises granted by local government.
In this Brave New World, some providers, who also own other media companies, reportedly are planning to use their monopoly advantage to limit your access to what flows over their lines. News reports say that some providers are planning to restrict or impose fees on customers’ access to competing services, such as Netflix and Skype, or allow preference such as faster transmission times for commercial Web sites that pay extra.
Am I missing something? I see no difference between that and a phone company deciding whom you can call on the phone.
In this upside-down logic, those who argue for a “free and unregulated” Internet are the business interests that want it unregulated for themselves so they can limit their customers. The opposite viewpoint, known as “net neutrality,” is championed by interest groups that see regulation as the only way to assure that the Internet is not stifled by these monopolistic practices.
Regulated monopolies, with all their special privileges, have expanded into competitive industries, while singing hymns to the free market, and nobody is stopping them. I don’t get it.
In the vigorous national debate on this subject, I have not seen anyone raise the issue of this unholy coupling of monopolies and markets. So I’m saying it here.
Recently the Federal Communications Commission enacted a rule, described by some as disappointingly weak but opposed by a majority in Congress. The House of Representatives passed a resolution “disapproving” of the rule, whatever that means. This issue will continue to be divided mostly along party lines.
So here’s an alternative. Franchises are granted by cities. Your city probably has an ordinance, and maybe a franchise review board composed of a few unappreciated civic volunteers. Your city can “just say no” to Internet tyranny.
That’s not necessarily simple. The regulation is largely governed by the federal Telecommunications Act. Cities’ only choices might be to accept the whole package or revoke the franchise, and then you lose not just your Internet provider but also your cable or phone. Cities could provide free wireless access to everybody, but in the current fiscal climate that’s a pipe dream.
But cities and towns can act together. Local governments acting in concert, through such organizations such as the New Mexico Municipal League, can be a powerhouse and demand freedom of access through the franchise agreement.
So while Congress remains paralyzed, local governments acting together may provide an alternate route to getting things done. There are well-established approaches for state and local governments to act cooperatively, such as uniform laws and interstate compacts drafted collectively and adopted separately by every state.
This is a bigger subject and can be a bigger vision than just the Internet issue. At least until General Electric buys the electric cooperatives.
© New Mexico News Services 2011