Slamming Shut Open Access
Internet users are ready to switch to high-speed broadband. But they may be getting a lot less than they bargained for as regulatory changes create new Internet service monopolies.
This article is from the September/October 2002 issue of Dollars and Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org/archives/2002/0902stamoulis.html
This article is from the September/October 2002 issue of Dollars & Sense magazine.
at a discount.
Imagine typing in the web address for your favorite site—Alternet, Working Families, even your kid's soccer league site—then having to wait so long for it to appear that you give up. Or getting a message on the screen reading, "The website you requested is not included in your Internet package." Or finding out that the organization you're looking for no longer maintains a website. These disturbing possibilities may be a lot closer than you think. Technological changes, coupled with deregulation, may soon begin to radically limit diversity on the Internet. In fact, the open, pluralistic, free-for-all character of today's Internet could soon come to resemble something much more like cable TV, with rising prices, limited access, and a monotonous diet of mostly corporate content.
The 7,000 Internet Service Providers (ISPs) that are available today could soon dwindle down to just two or three for any one locality—your regional phone monopoly, your local cable monopoly, and possibly some emerging form of satellite Internet. With that degree of market control, these companies would be likely to raise Internet rates astronomically. It's a trend that's already beginning. This summer, AT&T Broadband raised rates for its fastest Internet connection by as much as 80%, saying "there's nobody close to us in offering that value of service." Only the lack of competition in high-speed Internet services makes that statement true.
Worse, this lack of competition is likely to push up the cost of having a web site; web hosting that now costs $40 or so a month may soon be priced out of range for many small businesses and nonprofits. And even if your favorite media makers do manage to find the funds they need to pay for a website, the remaining ISPs could still decide that they are not invited to have one—at least not in an area of the Web any typical user will ever see.
No More Open Access
Many Internet users are ready to switch from their current, dial-up Internet access to some form of what's known as broadband: either DSL service, which is provided over the phone line by the local phone company itself or by another provider such as Earthlink, or a cable connection. Both forms of broadband offer certain advantages: they're faster than dial-up service and they don't tie up the phone line for ordinary calls. What many users don't know, however, is that as they switch to broadband, they are stepping into an Internet world that's dramatically different. Different not because of any inherent feature of the new technologies—different, rather, because the Federal Communications Commission (FCC) and Congress are currently overturning the public-interest rules that have encouraged the expansion of the Internet up until now.
Your telephone is currently characterized by the federal government as a "telecommunications service." This designation forces the phone companies to open their wires to any business that wants to use them, a policy called "open access." Open access is why you can choose between lots of long-distance providers. It's also why you can choose between AOL, MSN, Jimmy's Internet Shack, and thousands of other ISPs for dial-up Internet access. The phone companies would like to use their monopoly ownership of the phone wires to have monopoly control over phone-based Internet services as well, but telecom regulations are in place that prevent them from blocking out other companies.
Unfortunately, as the general shift from dial-up to broadband Internet access gets underway, the FCC is moving in with a series of actions that threatens to slam the door shut on open access. This spring, the FCC decided to characterize high-speed cable Internet connections—largely controlled by AOL-Time Warner, AT&T Broadband, and other large corporate players—as an "information service" rather than a "telecommunications service." This designation frees cable broadband from telecom rules, giving most cable companies complete say over which ISPs beyond themselves, if any, will be allowed to provide Internet access over their cable lines. Cable itself is a monopoly in most towns; so anyone who signs up for cable Internet will typically have no choice other than to use the cable company's own ISP.
Naturally, the telephone industry has cried foul, arguing it is unfair for the FCC to allow cable Internet services to be monopolies while phone-based Internet services are forced to remain open. So the FCC is now seriously considering designating DSL as an "information service," too. If that happens, you wouldn't get to choose between different DSL providers without the phone company's okay. It's likely that in many areas, there would be only one DSL service provider—your regional phone monopoly.
These sorry changes are taking place under the leadership of FCC Chairman Michael Powell, a Bush appointee who has publicly declared he has "no idea" what the public interest is, does not believe it exists, and has gone so far as to call public-interest regulations "the oppressor." As an FCC commissioner, Powell voted to approve the AOL-Time Warner merger at a time when his dad (and now Secretary of State) Colin was an AOL Board member with over $15 million in stock. Clearly, there is some confusion as to whom Michael Powell is using his position to serve.
"New and Improved" Internet?
Once broadband Internet access becomes the norm, the unfortunate results of these FCC rulings will really kick into effect. Many people don't realize it, but ISPs have the right to privilege—or even block out—whatever content they choose. Even if your local cable and phone companies decide not to ban competitive or critical content, they could take steps to "ghettoize" it. By controlling the browser software that works over their networks, they could give priority placement to websites they partner with. It's something some ISPs like AOL already do. Such control makes it less and less likely that people surfing the Web will accidentally stumble on any content that the ISPs haven't already decided they should see.
Unfortunately, the control that broadband ISPs can exercise over content won't end there. According to the Columbia Telecommunications Corporation, a Maryland-based engineering consulting firm, the cable companies already have the technical ability to manage the speed at which different sites pop up on your screen once requested. Sites that are owned by your ISP, or that pay it a little extra, could get priority in how quickly their content reaches your computer. Other sites would be given second- or third-class consideration.
The monopoly power being handed over to the cable and phone companies will also encourage them to sell different levels of Internet access, much like they do with cable television. For one price, you could access only certain pre-approved sites; for a higher price, you could access a wider selection of sites; and only for the highest price could you access the entire World Wide Web. This is already the way that many wireless Internet packages operate. It's clear that "marginal" content that isn't associated with e-commerce, big business, or government would have a hard time making it into the first-tier, "basic" packages. This isn't censorship, we'll be told. It's just that there is only so much bandwidth to go around, and customers would rather see CNN, the Disney Channel, and porn than poor production-quality, community-based websites.
The new "information services" designation is a major victory for the cable industry, whose individual corporations have been merging like crazy in recent years in an attempt to solidify their power. Just this July, a handful of shareholders with majority control at Comcast Corp. and AT&T Broadband voted to merge in a deal that even BusinessWeek labeled "a perfect marriage of bad corporate governance and bad public policy." If approved by regulators, the proposed company would control the cable running into the homes of almost half of all U.S. cable subscribers—enormous market power over the cable television industry, but also over high-speed cable Internet.
The phone companies also stand to benefit from the new wave of telecommunications deregulation. Seeing the cable industry's success, the Baby Bells—Bell South, Qwest, SBC and Verizon—unleashed their massive lobbying power to gain better control over DSL. The Tauzin-Dingell bill (ironically titled the "Internet Freedom and Broadband Deployment Act"), which gives these companies the right to expand DSL without competition, more or less breezed through the House last spring. In the Senate this August, John McCain introduced a bill that, according to the telecom industry journal Broadcasting & Cable, will allow all consumer broadband suppliers to block out competing ISPs and will prevent states and localities from having any say in the matter.
Major Internet players who don't own the cable or copper wire running into consumers' homes are still trying to determine what role they can play in this brave new world wide web. So far, companies like Earthlink and Microsoft seem to be betting on the possibility that they can form strategic partnerships with the cable, and possibly phone, monopolies. The e-commerce giant Amazon.com has adopted another strategy, at least at first glance. In July, the company filed comments with the FCC, asking the government to "impose on cable operators an open access requirement that would permit multiple ISPs to provide consumers unfettered access to all the information, products and services the Internet has to offer." Whether Amazon actually means that or is just jockeying for better bargaining position with the cable and phone companies remains to be seen. At any rate, the influence of e-commerce retailers in Washington pales in comparison with the long-standing, well-connected industries they're up against.
Thankfully, a nascent movement for media democracy is now on the rise. Public interest groups like the American Civil Liberties Union, the Center for Digital Democracy, the Media Access Project, and the Consumer Federation of America have been stepping up their efforts to analyze America's media policies and to propose alternatives that could help rescue the Internet's potential as a powerful building block of participatory democracy. This fall, progressive media critics including Sut Jhally, Jean Kilbourne, Robert McChesney and Carrie McLaren are coming together to form a national organization, the Action Coalition for Media Education, "that fosters democracy and promotes an active, media-literate culture." The concerted efforts of these educator activists should help to both highlight and broaden public debate over our media system.
What's more, grassroots activists from around the United States and beyond—many from the Independent Media Centers and the movement against corporate globalization—are beginning to take on media democracy as a core organizing issue. They've been holding educational events in their local communities, and demonstrating outside the FCC, the National Association of Broadcasters, and major media corporations everywhere. While still small in numbers and power, this movement has the potential to build public support for a media revolution. According to the ACLU's report No Competition: How Monopoly Control of the Internet Threatens Free Speech, "Only if citizens demand action can the precious neutrality and independence of the Internet be preserved."