No, “Big Tech” shouldn’t give “Big Telecom” billions of dollars for no reason

of we-have-already-passed-this department

A few weeks ago, we noted how FCC Commissioner Brendan Carr had caught at Newsweek to dust off a fifteen-year-old AT&T talking point. That is, “big tech” companies get a “free ride” on telecom networks and, therefore, would have to spend billions of dollars on “big tech” for no real reason. You will recall that it was this kind of argument that started the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google would not be allowed to “ride its bagpipes for free.” . Whitacre was effectively arguing that in addition to paying for bandwidth, tech giants should pay him a troll toll. You know, just because.

The claim that the tech giants (or anyone, really) are getting a “free ride” when it comes to US telecommunications is ludicrous. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cables, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. This is in addition to the money that Silicon Valley consumers, businesses and giants pay for their own bandwidth, which in the United States is often one of the highest in the developed world thanks to regional monopolization and to captured regulators (precisely like Carr).

Carr is right about one thing: we need to reform USF’s broadband subsidy system, which relies heavily on end-of-life landline revenues. But he is not approach the matter in good faith. He is using this need for reform to help shovel even more unearned money from AT&T, a company that has already gleaned quite unnecessary billions of dollars. tax breaks, subsidies and regulatory favors under the watchful eye of Carr and Donald Trump.

I have covered the rhythm of telecommunications for twenty years of an adult life, and I know what a captured regulator looks like when I see one. But despite the fact AT&T’s argument comes out of Carr’s mouth, the press somehow continues to take Carr’s point seriously. CNET recently took it at face value Last week. This week, it was Bloomberg’s turn to promote Carr’s idea that Google, Netflix, and Amazon should invest money in companies like AT&T. for no fucking reason:

“The pandemic has highlighted the need for fast internet connections for school, work and healthcare and has become an area of ​​agreement as President Joe Biden and lawmakers on both sides seek ways to support more broadband. Carr, in an interview, said one way to achieve this is to charge companies such as Amazon, Google and Netflix Inc. He cited “companies that benefit from the modern network and hardly pay nothing”.

Bloomberg oddly don’t even challenge that argument that Google and its friends “pay next to nothing” for bandwidth, despite the billions and billions they pay for … bandwidth. You literally can’t trip five feet without seeing a report of a major investment by Netflix, Google, or Amazon in cloud storage, transit, undersea cables, or content delivery networks. Like CNET, Bloomberg also implies that Carr has some original thinking that AT&T simply agrees with, when the underlying argument is in fact AT&T:

AT&T Inc., America’s largest telephone company by revenue, was perked up when Carr outlined his plan in Newsweek.

“It’s hard to imagine a successful reform that does not include a version of this proposal,” Hank Hultquist, vice president of federal regulation for AT&T, said in a tweet. The company has argued for Congressional appropriations – an idea opposed by others who fear the grant could fall prey to annual struggles for funding.

Astonishing. AT&T planted a dated and silly argument in a Newsweek article with the help of a captured regulator, then continues to get major outlets to amplify it as if they were just an objective third party. Worse yet, Bloomberg somehow manages to get interim FCC boss Jessica Rosenworcel to give her tacit approval to impose arbitrary tolls on tech giants:

Carr in a Newsweek editorial suggested lawmakers and regulators could set fees for web companies like Google, Facebook, Apple Inc. and even Microsoft Corp. for xbox games.

The appeal of Carr, a Republican, sparked interest. “It’s a fascinating idea. And we’re going to need some ideas, ”FCC Interim President Jessica Rosenworcel, a Democrat, told Bloomberg TV on June 11.

I know Rosenworcel is just polite, but we just had a fifteen year fight (dubbed net neutrality) on applying arbitrary fees to websites and services and then throwing that money at the telecom giants for no reason. Yes, the USF and broadband subsidy process needs to be reformed. But it starts with fixing a broken FCC subsidy process that throws billions of dollars each year into politically powerful telecommunications companies that play the system. You’ll notice that this idea never crosses Carr’s lips, in large part because these slush funds have historically been of immense benefit to AT&T and its friends, its only real constituents.

Carr and AT&T’s argument now appears because AT&T, Comcast, Verizon and their friends want to anticipate the Biden broadband plan (which promises to massively fund local competitors and community broadband efforts) with their own alternative: to have a “big technology” throwing billions at AT&T. AT & T’s strategy and policy makers want to harness the justified political and public anger against big tech to seed an idea they’ve been championing for literally twenty years now. This “big tech” is a bunch of wicked picnics that should fund the telecom giants’ perpetually unfinished network builds.

In effect, you are repairing / funding American broadband infrastructure like you are funding most of the rest of our neglected infrastructure: by actually taxing corporations and billionaires. You then fix the highly flawed (intentionally) flawed broadband mapping and subsidizing process, using that money to fund competitors who are significantly challenging entrenched local monopolies. These entrenched local monopolies don’t want this kind of real reform, so instead we get this theater. Theater the little skeptical press then regurgitate because it apparently does not know how this game is played.

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Filed Under: big tech, brendan carr, competition, fcc, jessica rosenworcel, grants, universal service fund

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