Communications is different from other regulated industries because of its susceptibility to monopolistic forces. In a world that increasingly relies on communications channels, the importance of global access is obvious. Professor Crawford has been on the front of this debate, and I thank her for taking the time to speak with the Record about big deals, bigger problems, and the future of high speed Internet access.
LC: What is going on between Comcast and Time Warner?
SC: Comcast is the largest media company in the world, and also the largest broadband and cable provider in the United States. It has recently announced that it wants to merge with Time Warner Cable, the second largest pure cable distributor in the United States. Comcast has about 20 million subscribers and Time Warner Cable has about 11 million. So, together would they have about 31 million customers, especially clustered up and down the east coast.
LC: What has been your role in this?
SC: I have no official role in this deal. I talk to people about this merger a lot. I talk to reporters, and I write about it, and I meet with staffers.
LC: Some of your recent writings have included commentary about how this deal would be bad for America. Why?
SC: It is interesting—I wrote a whole book about the Comcast-NBCU merger called Captive Audience [The Telecom Industry and Monopoly Power in the New Gilded Age] back in 2011 when Comcast become integrated with its purchase of one of the largest media companies in the United States. The book describes the fact that this is already a terrible situation, that for most Americans, the only choice for high capacity Internet connection is their local cable monopoly, and the book explains how we got to this point. A Comcast-Time Warner merger would make an already terrible situation incrementally worse in that Comcast would have additional scale. And scale is the secret to this business. It allows them to have low average unit costs, which keeps any threat of competition at bay.
LC: How do you think the Federal Communications Commission (FCC) will respond?
SC: Well the betting at the moment is that Comcast is sufficiently politically connected and that the FCC is sufficiently eager to impose conditions on the deal that would keep it from having to actually regulate—in short, that the deal will go through with some divestitures of cable systems at the edges.
LC: Is that what you think they should do?
SC: No, I think they should block the merger, but more importantly I think the whole country needs to be on a different track for high speed Internet access. This is a global competition in which we are falling farther and farther behind. Lines should be shared between wholesale and retail, which would allow for lots of competition.
LC: Can you talk a little more about the trajectory you think we should be on.
SC: Cable is a second-best technology to fiber. It is terrible at allowing uploads because of the way it has been architected, and we are an innovative and ingenious group of Americans. We would like to be able to publish as well as receive. Also, cable has so much power—politically and physically— in this country, that it would be very difficult to regulate them at this point. I am optimistic that the county can pivot to installing fiber networks, particularly here in Boston. I am not eager for the cities to be involved in actually selling private services to retail customers and businesses, but it would be terrific for cities to put down basic infrastructure that providers could use to sell low-cost retail services to customers.
LC: You mentioned that you are going to Kansas City to research Google Fiber. Can you please explain what Google Fiber is, and how you think it has the potential to really change the playing field in communications?
SC: Google has so far announced that it plans to cover 3 million American households with fiber to the home if it does the complete build out of its plans to cover 34 metro areas. Google is using very thin glass strands through which lasers are shot, and which have unlimited capacity. In the neighborhoods where Google has announced this, it has been quite disruptive to the monopolistic situation in the country. Google is like our World’s Fair. People had very little imagination about what electricity could be used for until the World’s Fair demonstrated what was possible with electricity. Google has demonstrated how different life is with unlimited communications capacity in Kansas City. Fiber is future-proof, as it has limitless capacity. So, I am interested to see how that changes things. I have already made trips to Stockholm and Seoul, and this is the third in the trilogy. I plan to talk to people, especially those working in start-ups, government officials, older people, and less well-off people, to find out what impact this actually has in their lives. The trouble with working in technology policy is that it always sounds a little alien. I am trying to find ways to bring human stories into this debate.
LC: Finally, do you foresee any other major changes coming to the communications world?
SC: Well, I think your generation is going to figure this out because mine completely messed it up. I am a Late Boomer, and there is Generation X behind me, and then you guys. Millennials really understand that this should just be infrastructure. Internet access is like clean water and electricity. It is crazy, just look at Cambridge, there is just one choice and it is only Comcast—and it is really expensive. How could that be? I am hopeful that with the shift of generations and the eventual patchwork of the city networks that are built, the entire country will make the shift to fiber and to an infrastructure view of high-speed Internet access.
Susan Crawford is the John A. Reilly Visiting Professor in Intellectual Property. She is also a Professor at Cardozo Law School, a contributor to Bloomberg View and Wired, and a faculty co-director of the Berkman Center.