Seizing the Moment to Dust Off the Anti-Big Agenda

Robert D. Atkinson March 22, 2020
March 22, 2020

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During the crisis that was World War II, it became obvious to even the most hardened foes of big business that large U.S. corporations were the salvation of the Allied cause, becoming what Arthur Herman called “freedom’s forge.” The current COVID-19 pandemic presents nothing like the challenge to America that the Axis powers did in WWII, but it may represent the biggest challenge to America since then. And across the board, many large corporations, in a host of industries—from biopharmaceuticals to retail, to technology and broadband—are stepping up to contribute their capabilities and innovations to help the country cope. Yet, at a time when we should all be coming to together as Americans, the anti-big-business left is seizing the opportunity to bash big companies and advance their neo-Brandeisian “small is beautiful” agenda.

Broadband providers serve as a case in point. With half of America being told to shelter in place and engage in social distancing, it should be clear that this would have been much more difficult 10 or 20 years ago. Fewer people had broadband then, and the networks were nowhere near as robust as they are now. Today, almost 95 percent of households have access to high-speed broadband at affordable prices. And now with so many people having to stay at home, with many streaming videos or engaged in Zoom video calls, the demands on the networks are unprecedented. Yet there have been no reports of network problems, because the major Internet Service Providers (ISPs) have been investing tens of billions of dollars every year to continue improving and expanding their networks.

Moreover, virtually every major ISP, including AT&T, Charter, Comcast, Cox, T-Mobile, and Verizon, has announced programs to help customers manage during this crisis. Comcast is increasing access speeds on its Internet Essentials package and giving it to new, low-income customers at no cost for 60 days as well as offering free WIFI hot spots; AT&T is removing usage caps that can lead to overage charges; Charter is offering free broadband for 60 days for families with students; and Verizon is waiving late fees and committing not to terminate service if households are not able to pay. And we should not forget that in the face of this crisis workers in all these companies are sacrificing and working long hours to ensure network reliability.

Yet, of course, for anti-monopolists this amounts to nothing. Broadband activist Gigi Sohn rightly points out that the crisis has reinforced just how important universal broadband access is. But rather than focus on expanding federal programs like the Universal Service program to help low-income households to afford broadband and computing devices and expand funding broadband in high-cost rural areas, she calls for government-owned networks, even though their track record is dismal.

In a New York Times op-ed on how to cope with the crisis, Anne-Marie Slaughter, president of the New America Foundation, also rightly points to the importance of broadband. But she seems to think that the problem is slow broadband speeds in metropolitan areas and argues that government should “move to more accountable municipally owned Internet service utilities, like the one that offers the nation’s fastest broadband, in Chattanooga, Tenn.”

To be sure, Chattanooga’s city-owned broadband network does provide fast speeds, up to 10 Gbps. But I doubt Slaughter is aware that, during the Great Recession, rather than spend scarce stimulus funds to get broadband to places that didn’t have any, the federal government gave Chattanooga’s utility a subsidy to make its already adequate broadband speeds (100 Mbps) even faster. I doubt that she is aware the utility charges $300 per month for this service. I doubt she is aware that there is virtually nothing a household could do with a 10 Gbps network. Yet according to the city, “10,000 Mbps of Internet speed, that’s enough bandwidth to stream 1,754 online movies all at the same time—in HD.” So, this service is quite useful if you want to host 1,754 friends to stream separate high-definition movies—something not advised when we are supposed to be practicing social distancing.

The reality is that virtually all private-sector broadband services provide more than adequate broadband speeds. I live in the Washington, DC area with my wife and teenage daughter and I don’t subscribe to my ISP’s faster services, because the middle-tier plan is plenty fast for our needs. In fact, watching a Netflix high-definition video consumes approximately 5 Mbps (0.1 percent of a 10 Gbps network).  Even if a family of five are all watching separate high-def videos at once (shouldn’t they at least be doing something together?), that’s only 25 Mbps. I wonder if Slaughter is also aware that private-sector broadband providers also provide super-fast broadband in virtually every city, including in Chattanooga, where Comcast offers 1 Gbps service. I wonder if she read her organization’s report from a few years back that showed that Chattanooga’s government-run network ranked a dismal 57th in the country for broadband affordability, behind many “big broadband” providers in cities across America.

The reality is that America’s current system of largely private-sector broadband provision is a success, as we are seeing in the last month. According to The Economist, the United States has the most affordable Internet services in the world. And in 2017, the latest year for which OECD data is available, U.S. broadband speeds ranked 8th among 39 nations, significantly ahead of Canada and Australia, the two other nations with similar patterns of suburban and exurban development (which makes achieving faster broadband speeds more difficult and expensive). In short, America’s challenge is not with the broadband industrial structure (e.g., too many big private providers and not enough government providers). Our challenge is that government policy to help low-income families and rural residents get connected has been anemic for too long. So, rather than use this crisis to dust off ideological campaigns against “big-broadband,” Sohn, Slaughter and other anti-big-company advocates should be calling for the federal government to invest with the private sector to help more low-income families get connected and make broadband available to more rural households.