Media Lab Conversations: Susan Crawford
March 28, 2013 #MLTalks
Susan Crawford was at the Media Lab today to talk about her new book Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. She is a highly-respected lawyer and professor and has taught at Cardozo Law School, University of Michigan, Yale, and now Harvard Law School. She was on Obama’s transition team reviewing the FCC, and a special advisor to Obama Administration on Innovation and Tech policy. She is also a former board member of ICANN and founder of OneWebDay.
The live webcast of Susan’s talk with Ethan Zuckerman andy Andy Lippman will be published here soon. The following is a liveblog of the Q&A session by Molly and Erhardt.
Q&A
Andy: You talked about the horizontal nature of the wired monopoly. You mentioned but didn’t really go into the vertical nature of it. If you control both the content and the network, then the future may well be a return to AOL – when you subscribe you may be confronted with a package of things with access to the rest of the internet on the side. But it’s the rest of the online universe (the internet on the side) that really revolutionized our society. That’s a scary thought, that those won’t be the bulk of the bits through these networks.
SC: The future could be the present. What we want is to communicate with each other. We could be on different ends of the country if we had the connectivity power. Fiber is a big change. A competitor has to build the infrastructure and get access to sports content. Comcast owns lots of regional sports networks, and can make that difficult. For instance, Google can’t get access to local sports in Kansas where it’s building out fiber because Time Warner controls it. Vertical integration leads to an AOL-like world. Think about “Facebook Zero” – prioritization of certain types of content over constrained bandwidth, whereby Facebook might be the only thing that users might get over certain channels. And this represents a bleak walled garden that is the future.
ETHAN: You mention the R word – regulation – several times. You talk about electric companies showing off wonders, but they we have ferocious policy battles. Theoretically, the FCC regulates this space. You describe monopolies that the regulators should have jumped in and fixed. Also you had a role in the Obama administration, building policy in this area. Why isn’t this your fault, and why doesn’t the FCC do something about this?
SC: The political power of the carriers in the US is unmatched. Comcast is bigger than McDonald’s and Home Depot and extremely well connected politically. These are very closely connected to the government because they are selling services through them. If the FCC acted right to treat them like the telephone company, it would be WW3. Lobbyists would march to capital hill and gut the bill. The reason for the writing the book was to give policymakers some political cover. It shouldn’t be like this that people wait to serve the public interest until someone claims.
ETHAN: Do we need to march on the FCC?
SC: My guerrilla warfare look at this is that Mayors should be pushing for dark fiber connectivity in urban settings that becomes available to low cost providers competing for users in that community.
AL: There’s an Apple/MS thing here. Companies keeping competitors alive to avoid a monopoly. If a bunch of cities put in alternatives, that’s going to prop up the monopoly by providing a not-a-monopoly excuse. Maybe we should be a technological alternative to cable.
SC: That is what I’m saying. I would strand those cable assets and overbuild with fiber. Mayors would issue RFPs that providers need to meet and then that would leap-frog on the technology. This is what Seoul did. We have always relied on private actors to provide telecommunications under the regulation of the public.
ETHAN: Twitter question – @evmaiden asks: “What can consumers do especially in states where laws have been passed to outlaw municipal broadband?”
SC: We need to rollback these terrible state laws, which requires local organizing. I would also like to the FCC pre-empt these rollbacks with their own regulation. Georgia case: bill came to state house to disallow municipalities from providing broadband access if provision in the area fell below 3 Mbit/sec.
AL: You’re biased because you’re a member of the bar, so your instinct is to obey the law. My instinct is to break the law and make things better. If we’re going to do something that will get us arrested, we better all get arrested, because if we’re all arrested, we can make a difference! Cuttyhunk Set up a repeater, resold net access, and defeated the big internet provider (story).
SC: Sandy was a huge disaster for NYC, and communications were a big deal. Networks were out and there was no information about it, or requirements for the telcos to provide information on the outages. Verizon and ATT have such barriers to competition, a fourth as expensive for them to build their networks compared to Sprint and T-mobile. In a competitive market, you would see someone step in on the overage charges levied by these big networks, but no-one can compete.
ETHAN: Twitter question: Who do you think does telecom regulation well?
SC: Japan has done it well, they’ve taken it as a serious issue of industrial policy. This is seen as a requirement for citizens. South Korea has done it well, you can watch TV on the subway. NYC signed an exclusive deal with one company to provide wireless in the subway stations only for 25 years. Seoul is so far ahead on this.
ETHAN: Is it making infrastructure more accessible to others? I come from a weird place on this because I’m thinking about it from telecom policy in the developing world. We had five competiing wireless providers in Ghana with good coverage and prices. But then prices started creeping up and up and up. Even in competitive environments we see that price problem keeping up, so how can we rely on competition to do this in the US context?
SC: It takes a firm backbone. A wholesale facility at a price regulated rate. Stockholm did this effectively. If you can avoid the single wire to the house, you can induce great competition at the wholesale level.
AL: How do we fix the wireless situation? There;s 2 things wrong with wireless. One of them is the lockstep duopoly; the other is the wireless system we have is no good. Two things are overwhelming wireless: streaming and short bits. The short bits have enormous overhead for carriage on the wireless system. Our system was optimized for phone calls and short messages, which is the exact opposite of the use pattern now. How do we fix the problem where we are keeping alive a fundamentally mis-optimized system?
SC: My answer is more fiber, deep into neighborhoods wherever possible. And then we can rely on opportunistic clouds of WiFi to fill in the gaps.
ETHAN: Twitter question – what about info co-ops?
SC: That’s what I”m talking about with the MUNIs getting together. The cooperative model, as we saw with municipal electricity, makes a lot of sense: contribute resources and its managed in the interest of the community.
ETHAN: We have two out in Western Mass, the most interesting one is near Williams College, which bounces a signal from a satellite to southern Vermont. Bears need internet too.
Audience Question: Although you are using the R-word (regulation) you are scared to use the S-word (subsidy). Does that actually move the agenda forward? Nobody is going to put fiber in place unless we find a way for them get a return on their investment. If connectivity is a utility, why are we still trying to find a way to build it using a competitive marketplace? Will we ever get there without a subsidy? Try for both regulation and subsidy at the same time?
SC: there are different actors expecting different returns on capital. Right now its like a first run movie. Changing the nature of expectations to look for a much longer term payout wait and value other outcomes are going to be part of what a community desires. Municipal broadband still relies on private providers. We already have subsidies, but they need to be paid out in a more diverse fashion. I want this money to be patient.
ETHAN: The most retweeted comment you’ve made is about regulating connectivity like utilities. But you grew up in a world, under the Bell system, where you couldn’t connect something to the phone network without breaking a law. Is there is a possibility that we might turn this into an incredibly sterile space with no innovation?
SC: I think of this more as a road. We think fiber is future-proof (50-100 years). But first we have to get it in the ground. 80% of that is labor, and there are certain obligations that go along with that: maintenance, neutrality, etc. But the innovation will happen at the ends, not on the highway.
ETHAN: I do want highways to innovate. It seems like fiber is a good upgrade to what we have now. The electricity grid seems like a bad model for this because there hasn’t been effective innovation there and has created an inflexible system prone to failure.
AL: You are doing too many things at once. Hardware is the new software! We can change lots of things at very low costs with very high turnover. The danger in the rigidity is the catastrophic failure of DNS. But that’s changing a fairly minor thing.
ETHAN: I’m taking seriously the airline/runway notion. If it’s incredibly expensive to put fiber in the ground, people move — they go to other places. I am with Susan on the idea of regulating like a utility, but I want to push on what seems like the weak parts in the argument. Buffalo’s electric grid is incredibly well regulated, but Buffalo isn’t everywhere. I appreciate that Andy wants to see a hardware solution around this, but I’m not sure where the success is going to come from since bits need to go through something in the end.
SC: for me this a compared to what question. We are so stuck that getting individual cities to experiment is the best option: Boulder CO has taken their electricity utility back to public control because it wasn’t very responsive.
AUDIENCE Q: I like your point about more innovative cities. If you can better networked cities, maybe you could see people moving there. Maybe the smartest way is to help cities build innovative networks and then see if people move there.
SC: In Kansas City, you can rent a room their at fiber house over AirBnB, check it out. The city’s credit rating is improving, start ups want to move there, and other cities are getting jealous. I ended up with Tea Party guy talking to me. He can’t get a fiber connection to his radio station. And we found common cause. He wants the free market to operate but he relies on the government for utilities. How did we forget that it takes collective action to fulfil things not provided by the market?
ETHAN: Part of this is a conceptual change. Egghead is live tweeting this talk, so there is a heavy Nigerian presence in this talk. Speaker in Lagos: @talktonnamdi “I’m really surprised. The general impression and belief is that anything American is top notch.” But there are lots of things about this country that were world leading in the 1950s which suck now. How do we get back to that point where we are top notch across the board again?
SC: I have great faith in millennials, they are locally based and care about civic action, and frustrated by how the country is doing. This is an awakening for progressive america. It’s like our air is being poisoned by this poor infrastructure over time. We need reclaim the idea that we didn’t get to this point by accident.
ETHAN: (to Andy) Whose responsibility is infrastructure? We don’t want to tie the hands of innovators. Do we look to the government? Do we look for innovators?
AL: If you want my prescription, I agree with Susan 100%. At some point we needed to fix the width of highways. When we privatized everything else, the auto industry and concrete industry was free to do what they wanted afterwards. The idea is to isolate infrastructure from everything else. The cost is only 15% of an Iraq (estimate of the cost of investing). It’s not a big amount to put fiber in the US in comparison. We built the Hoover Dam in the middle of the Depression.