This week on moyers and company i see Internet Access as the heart of a democratic society. Having a Communications System that knits the country together is not just about economic growth. Its about the social fabric of the country. And American Culture has never fully come to grips with vietnam. Its this half known history there, these hidden and forbidden histories that just havent been fully engaged. Announcer funding is provided by Carnegie Corporation of new york, celebrating 100 years of philanthropy, and committed to doing real and permanent good in the world. The kohlberg foundation. Independent production fund, with support from the partridge foundation, a john and polly guth charitable fund. The clements foundation. Park foundation, dedicated to heightening Public Awareness of critical issues. The herb alpert foundation, supporting organizations Whose Mission is to promote compassion and creativity in our society. The bernard and audre rapoport foundation. The john d. And catherine t. Macarthur foundation, committed to building a more just, verdant, and peaceful world. More information at macfound. Org. Anne gumowitz. The betsy and jesse fink foundation. The hkh foundation. Barbara g. Fleischman. And by our sole corporate sponsor, mutual of america, designing customized individual and Group Retirement products. Thats why were your retirement company. Welcome. Youve heard me before quote one of my mentors who told his students that news is what people want to keep hidden. Everything else is publicity. Thats why two books are rattling the cages of powerful people who would rather you not read them. Heres the first one. Captive audience the Telecom Industry and monopoly power in the new gilded age, by Susan Crawford. Read it and youll understand why we americans are paying much more for Internet Access than people in many other countries and getting much less in return. That, despite the fact that our very own academics and engineers, working with our very own defense department, invented the internet in the first place. Back then, the u. S. Was in the catbird seat, poised to lead the world down this astonishing new superhighway of information and innovation. Now many other countries offer their citizens faster and cheaper access than we do. The faster highspeed access comes through fiber optic lines that transmit data in bursts of laser light, but many of us are still hooked up to broadband connections that squeeze Digital Information through copper wire. Were stuck with this oldfashioned technology because, as Susan Crawford explains, our government has allowed a few giant conglomerates to rig the rules, raise prices, and stifle competition. Just Like Standard Oil in the first gilded age a century ago. In those days, it was muckrakers like ida tarbell and Lincoln Steffens rattling the cages and calling for fair play. Today its independent thinkers like Susan Crawford. The big Telecom Industry wishes she would go away, but shes got a lot of people on her side. In fact, if you go to the white house citizens petition site, youll see how fans of captive audience are calling on the president to name Susan Crawford as the next chair of the federal communications commission. Prospect magazine named her one of the top ten brains of the digital future, and Susan Crawford served for a time as a special assistant to president obama for science, technology and innovation. Right now she teaches Communications Law at the Benjamin Cardozo school of law here in new york city and is a fellow at the roosevelt institute. Susan crawford, welcome. Thank you so much. Captive audience . Whos the captive . Us, all of us. Whats happened is that these enormous telecommunications companies, comcast and time warner on the wired side, verizon and at t on the wireless side, have divided up markets, put themselves in the position where theyre subject to no competition and no oversight from any regulatory authority. And theyre charging us a lot for Internet Access and giving us second class access. This is a lot like the electrification story from the beginning of the 20th century. Initially electricity was viewed as a luxury. So when f. D. R. Came in, 90 of farms didnt have electricity in america at the same time that kids in new york city were playing with electric toys. And f. D. R. Understood how important it was for people all over america to have the dignity and selfrespect and sort of cultural and social and economic connection of an electrical outlet in their home. So he made sure to take on the special interests that were controlling electricity then who had divided up markets and consolidated just the way internet guys have today, he made sure that we made this something that every american had. But we are a long way from f. D. R. , the new deal and those early attitudes toward industry. What makes you think thats relevant now when you come to the internet . You know, this is an issue about which people have a lot of passion because it touches them in their daily lives. The wall street journal on the front page had an article about kids needing to go to mcdonalds to do their homework because they dont have an Internet Connection at home. Parents around the country know that their kids cant get an adequate education without Internet Access. You cant apply for a job these days without going online. You cant get access to government benefits adequately, you cant start a business. This feels to 300 million americans like a utility, like something thats just essential for life. And the issue of how its controlled and how expensive it is and how few americans actually sign up for it is not really on the radar screen. You describe this frankly as a crisis in communication with similarity, you say, to the banking crisis and global warming. What makes it a crisis . Its a crisis for us because were not quite aware of the rest of the world. Americans tend to think of themselves as just exceptional. And were well, we did invent the internet, didnt we . We did, but that was generation one. Generation two, were being left far behind. And so all the new things that are going on in the world, america wont be part of that unless we are able to communicate. So theres a darkness descending because of this expensive and relatively slow Internet Access in america. Were also leaving behind a third of americans. A third of us. In here you call it the Digital Divide. Describe that to me. Well, heres the problem. For 19 million americans, many in rural areas, you cant get access to a high speed connection at any price, its just not there. For a third of americans, they dont subscribe often because its too expensive. So the rich are getting gouged, the poor are very often left out. And this means that were creating yet again two americas and deepening inequality through this communications inequality. So is this why, according to numbers released by the department of commerce, only four out of ten households with annual Household Incomes below 25,000 reported having wired Internet Access at home compared with 93 of households with incomes exceeding 100,000 . These companies are not providing cheap enough access to the poor folks in this country . These are Good American companies. Their profit motives though dont line up with our social needs to make sure that everybody gets access. Theyre not in the business of making sure that everybody has reasonably priced Internet Access. Thats how a utility functions. Thats the way we need to treat this commodity. Theyre in the business right now of finding rich neighborhoods and harvesting, just making more and more money from the same number of people. Theyre doing really well at that. Comcast is now a 100 billion company. Theyre bigger than mcdonalds, theyre bigger than home depot. But theyre not providing this deep social need of connection that every other country is taking seriously. And you make the point that the United States itself is beginning to experience this Digital Divide in the world. Its fair to say that the u. S. At the best is in the middle of the pack when it comes to both the speed and cost of high speed Internet Access connections. So in hong kong right now you can get a 500 megabit symmetric connection thats unimaginably fast from our standpoint for about 25 bucks a month. In seoul, for 30 you get three choices of different providers of fiber in your apartment. And they come in and install in a day because competitions so fierce. In new york city theres only one choice, and its 200 bucks a month for a Similar Service. And you cant get that kind of fiber connection outside of new york city in many parts of the country. Verizons only serving about 10 of americans. So lets talk about the wireless side for a moment, you know, the separate marketplace that people use for mobility. In europe you can get unlimited texting and voice calls and data for about 30 a month, Similar Service from verizon costs 90 a month. Thats a huge difference. Why is there such a disparity there . The difference in all of these areas is competition and government policy. Its not magical. Without the intervention of the government theres no reason for these guys to charge us anything reasonable or to make sure that everybody has services. How do you explain that in the course of one generation, from the invention of the internet in this country to falling way behind as you say the rest of the world in our access to internet . How did that happen . Beginning in the early 2000s we believed that the magic of the market would provide Internet Access to all americans. That the cable guys would compete with the phone guys who would compete with wireless and that somehow all of this ferment would make sure that we kept up with the rest of the world. Those assumptions turned out not to be true. Its much cheaper to upgrade a cable connection than it is to dig up a copper phone line and replace it with fiber. So the cable guys who had these franchises in many, most american cities, they are in place with a status quo network that 94 of new subscriptions are going to. Everybodys signing up with their local cable incumbent. There is not competition for 80 of americans. They dont have a choice for a truly high speed connection. Its just the local cable guy. Competition has just vanished. Well, the 1996 Telecommunications Act was supposed to promote competition and therefore protect the consumer by bringing prices down. That didnt happen . That didnt happen because its so much cheaper to upgrade the cable line than it is to dig up the copper and replace it with fiber. The competition evaporated because wall street said to the phone companies, dont do this, dont be in this business. So you may think of verizon and at t as wired phone companies, theyre not. Theyve gone into an entirely separate market which is wireless. Theyre the monsters on the wireless side that control twothirds of that market. So theres been a division. Cable takes wired, verizon at t take wireless. Theyre actually cooperating. Theres a federally blessed noncompete in the form of a joint Marketing Agreement between comcast and verizon. And so the world is perfect for them, not so great for consumers who are paying more than other people in the rest of the world for slower service. Since the 1996 Telecommunications Act which i thought was going to lower the price of our monthly cable bill, its almost doubled. Well, thats because time warner controls manhattan. Theres no competition. The cable guys, long ago, something they call the summer of love, divided up the summer of love . Yeah. They clustered their operations. It makes sense from their standpoint. You take san francisco, ill take sacramento. You take chicago, ill take boston. And so comcast and time warner are these giants that never enter each others territories. You talk to certain people and they say, look, i dont know what this is about. I have all the gizmos i want. I have a smartphone, i have a tablet, and they say, whats the crisis . Because i have more access than i can use. There are a lot of bright shiny objects that are confusing people about the underlying Market Dynamics here. What people dont realize is that for this wireless access youre paying too much and the coverage is too spotty. On the wired side, thats where were really being left behind. And heres the important tie to understand. A Wireless Connection is just the last 50 feet of a wire. So fiber policy is really wireless policy. These two things fit together. And if the whole country did an upgrade to cheap fiber everywhere wed get better connection for everybody. Right now though if a mayor wants to do this for himself hell be pummeled by the incumbents. In almost 20 states in america its either illegal or very difficult for municipalities to make this decision for themselves. In North Carolina a couple of years ago lobbyists for time warner persuaded the state legislature to make it almost impossible, virtually impossible for municipalities to get their own utility, right . Thats exactly right. And so now North Carolina, after being beaten up by the incumbents is at the near the bottom of broadband rankings for the United States. And whats the practical consequence of that . All those students in North Carolina, all those businesses that otherwise would be forming, they dont have adequate connections in their towns to allow this to happen. Theyve got theyre subject to higher and higher pricing. Theyre being gouged. Your book did underscore for me why this is so important to democracy, to the functioning of our political system, to our role as a selfgoverning free people. Talk about that a moment. Why do you see this so urgently in terms of our practically dysfunctional democracy today . We need to be able to speak to each other effectively and effectively to government. We need to empower our citizens to feel dignified and ready to cope in the 21st century. Having a Communications System that knits the country together is not just about economic growth. Its about the social fabric of the country. And a country that feels as if it can move together and trust each other is one that is more democratic. As a matter of National Policy we have forced other countries to talk about the importance of Internet Access, Foreign Policy were great at saying, make sure internet is everywhere. Domestically, for some reason, we havent done so well. So i see Internet Access as the heart of a democratic society. You use that merger of comcast and nbcuniversal as the window in your book into what this power can do to the aspirations of a democratic internet. Federal regulators today approved the purchase by comcast of a majority stake in nbcuniversal from general electric. This merger will create a 30 billion Media Company with cable, broadcast, internet, Motion Picture and theme park components. The deal is expected to close by the end of the month. You say that the merger between comcast and nbcuniversal represented a new frightening moment in u. S. Regulatory history. How so . Comcast is not only the nations largest broadband distributor with tens of millions of customers, it also now owns and controls one of the four media conglomerates in america, nbcuniversal. That means that it has a builtin interest in making sure that it shapes discourse, controls programming all in the service of its own profitmaking machine. As both the distributor and a content provider, its in its interest to make sure that it can always charge more for discourse we would think isnt controlled by anybody. So its a tremendous risk to the country that we have this one actor who has no interest in the free flow of information controlling so much of high speed Internet Access. You say the merger created the largest vertically integrated distributor of information in the country. So whats the practical consequence of comcast having this control over its content . Heres the consequence. Comcast with the control over its programming, and also because it works so closely with the very concentrated programming industry, can raise the costs of any rival coming in to provide lets say competitive fiber access. So google in kansas city is having real trouble getting access to sports content because time warner cable, the local monopoly player there, controls that sports content. So google or any other competitive Fiber Provider has to enter two markets at once. One market to provide the transport, the fiber, and then also the programming market. And making programming more expensive is yet another barrier to entry. And comcast can carry that out now. So what should the f. C. C. Do about that . This is a moment when we have to separate out content from conduit. It should not be pos