There is an easy way to simplify the upcoming battle between the FCC and big ISPs over Title II regulation and net neutrality. The public expects government to regulate industries that are essential. That’s the reason we regulate electric companies and drinking water quality. It’s the reason we regulate meat and drug safety. Governments also eventually regulate companies or industries that gain monopoly power since monopolies inevitably engage in practices that harm the public or unfairly compete in the marketplace to drive out competition. Monopolies that deliver essential services should get the most regulatory scrutiny.
Now that the FCC has formally started the process of placing some regulations on ISPs, we’re going to hear a lot of reasons from big ISPs why they don’t need to be regulated. They are going to march out testimonials telling us what wonderful corporate citizens they are. Big ISPs will tell us how the prices they charge us are fair and are even getting less expensive over time. They will attack the regulators and say that attempts to regulate them are only for political reasons. They will publicize opinions by industry experts who will say that regulation isn’t needed (with many of the experts on the big ISP payroll). They will swear that they don’t do anything that requires regulation. They will cry wolf and say that regulation will drive up prices. And they will deflect any conversation about regulation using red herrings to make the discussion about something else. I’ve already seen all of these tactics in just the last few weeks.
Big ISPs will do everything possible to avoid having an open discussion about why big ISPs should be regulated. If explained in the simplest terms, almost everybody would agree that big ISPs should be regulated since they deliver essential services and have monopoly power.
The monopoly power of the big ISPs is easy to prove. The four biggest ISPs – Comcast, Charter, AT&T, and Verizon serve nearly 75% of all broadband customers in the country. All four also sell cellular broadband and collectively control the large majority of that market as well. Any industry where four companies control the large majority of the market is clearly under the sway of monopoly power.
It’s not hard to make an argument that broadband is essential and growing more so each year. Most people would agree that agriculture, water, housing, energy, healthcare, and banking are the most essential industries for daily life. In the short 25-year history of broadband, it has grown to join this list.
Like banking, broadband is now an industry that supports every other industry. While many of us still know a few small businesses that don’t use broadband, even those businesses benefit from the broadband that is essential to the logistics for the raw materials and products that support them.
But broadband is not only essential to other industries; it is essential in the daily lives of people. A recent U.S. News and World Report survey showed that 85% of Americans now go online every day. A lot of us have jobs that wouldn’t exist without broadband. Broadband is essential for education. The broadband industry is at the heart of how we communicate with each other. I could easily write multiple blogs to list the ways that people have become reliant on broadband – and that long list would clearly demonstrates that broadband has become essential.
A society that doesn’t regulate essential industries is at risk of falling prey to companies that abuse consumers who must buy the services. The danger to the public only gets worse when the companies that control essential services are also monopolies. All of the other essential industries I’ve listed above are regulated, and not just in the U.S., but in all of other industrialized nations.
Big ISPs can’t make the argument that they don’t harm the public. Broadband prices have already grown out of the reach of many families, and the affordability gap is climbing. Big ISPs dissemble and claim that their prices have grown slower than inflation, but that is demonstrably not so. In 2005, the price of cable broadband and DSL from the biggest ISPs was around $40 per month. Price increases to keep up with inflation would have that price today around $63. The two big cable companies now have prices for basic broadband between $85 and $100.
So tune out the non-stop red herrings and misdirection you are going to see from the big ISPs for the rest of this winter. They have been extremely successful in shedding regulation, and they will now fight tooth and nail to keep regulation at bay. Don’t buy their many arguments about why regulation isn’t necessary. The big ISPs deliver an essential commodity and have monopoly powers – it would be a travesty not to regulate them.