Information commons to cash cow
If the Bush administration lets large media conglomerates and local telephone companies have their way, the Internet as we know it—that free-flowing, democratic, uncensored information superhighway—could soon be a thing of the past.
The Internet itself is not going away. Rather, technological advances, changes to the rules governing its use and the continued consolidation of media empires are combining to turn it into a conduit of commerce, booby-trapped with barriers and incentives designed to keep users where dollars can be wrung from them. As a result, a lot of freely accessible information and websites may become difficult or impossible to connect to—hindering the efforts of those posting that information to reach others.
At a time when a handful of large media corporations produce most of the news people get, the television and movies they watch, the books they read and the music they listen to, the Internet offers a refreshing oasis of uncontrolled information and innovation. This network of networks, as Stanford University law professor Lawrence Lessig describes it, is an information commons, a place where anybody with a computer, modem and connection to a telephone line can log on and receive information from any of the more than roughly 3 billion (and growing) web pages posted worldwide. Internet users can also create their own websites, giving them the potential to communicate to millions of individuals around the world. (According to the Internet research firm Jupiter Media Metrix, an average of 80 million people use the Net on any given day.)
The Net’s open platform has spawned a wide range of innovation. People have started email lists and online chat rooms on just about any topic imaginable. Individuals have created new ways to distribute books, music and other products online. Independent online journals and news services offer hard-hitting alternatives to corporate media. Many independent radio stations now webcast, extending their range to anybody around the world who logs onto the station’s website.
This unprecedented ability of ordinary citizens and nonprofit groups to communicate with so many others has given them voice and power they otherwise would not have. Take, for example, the Organic Consumers Association, a citizen activist group that focuses on food safety and environmental issues. OCA executive director Ronnie Cummins says 85,000 people receive the association’s action alerts and newsletter, BioDemocracy News, via e-mail; about 4,000 people a day visit its website and download an average of 10 pages of material.
“A lot of our activist clout is being able to communicate cheaply to people,” Cummins says. “If we had to revert back to telephones, faxes, the mail and leafleting, it would reduce our campaign power considerably.” OCA is not unique in its use of the Internet. A wide variety of nonprofit groups (including FAIR) make savvy use of cyberspace to get their message out and spur ordinary citizens to take action.
Open and neutral
When the Internet was first developed, its designers had no idea how it would evolve, Lessig wrote in his book The Future of Ideas: The Fate of the Commons in a Connected World. Nor did this community of communications researchers, computer engineers and programmers–many of whose efforts were voluntary—want to control it. They were fiercely committed to keeping the Net open and neutral, specifically so that innovation could flourish.
Initially, the Internet used phone lines, which government regulation subjects to “common carrier” rules. This means the telephone network operator must open its lines to all comers, and cannot interfere with the message or who sends or receives it. Most Internet users still access the Net through conventional phone lines. But as cyberspace becomes more populated with users, and as new multimedia applications require more bandwidth, these lines are increasingly too slow and inadequate to handle the traffic.
The Net is in the early days of migrating to another platform—broadband—which is much faster and has potentially limitless capacity for data transmission. Besides dramatically expanding the Internet’s functions, broadband’s additional capacity also allows different media to converge: The same wire or wireless technology will be able to deliver television, phone, radio, the Internet and other kinds of multimedia applications to homes and businesses. With the Federal Communications Commission’s further relaxing of media ownership limits, we will see greater consolidation of media, so that even fewer large media conglomerates offer these services.
Broadband—also referred to as “fat pipe”—is currently available through cable modems provided by cable television companies. Local telephone companies offer broadband as well, through digital subscriber lines (DSL), a range of data-carrying frequencies split off from conventional phone lines. Broadband will also be available from satellite and other wireless technologies. Currently about 80 percent of U.S. households and businesses have access to broadband via cable or DSL, though only about 10 percent of Internet users have switched to these generally more expensive services.
FCC chair Michael Powell has declared “the great digital broadband migration” as the agency’s top priority. The information technology revolution “will have enormous consequences for our world and the manner in which business is conducted and how economies flourish,” Powell told the U.S. Chamber of Commerce at its Broadband Technology Summit in Washington, D.C. at the end of April. “Those nations that harness its power and the opportunities it presents will stand tall as great powers, and those that do not will shrink in every aspect of civilization—commerce, politics, philosophy, art, education and war. If we hope to take our place on the medal podium of the Information Age, as we did in the Agricultural and Industrial Ages, we must make every effort to embrace and advance the tools necessary to build information prowess among our citizens and institutions.”
Using the rationale of attracting private investment to build and expand broadband networks, the FCC is moving aggressively to lift requirements for open access. To the great delight of the cable industry, in a 3-1 vote in February, the FCC issued a far-reaching declaratory ruling classifying cable modems as an “information service” rather than a “telecommunications service” or a “cable service.” Neither cable nor information services are subject to common carrier rules. The agency has also declared its intent to deregulate DSL, which currently operates under common carrier rules, and has embarked on a series of decisions designed to “build the foundation for a comprehensive and consistent national broadband policy.” These decisions are expected to be finalized sometime this fall.
Action is heating up in Congress, too. A bill that would remove open access requirements from DSL, Tauzin-Dingell, has already passed in the House of Representatives. Citing concerns over continued media concentration and consumer protection, Senate Commerce Committee chair Fritz Hollings (D.—S.C.) has vowed to defeat this legislation. However, a version of it was recently introduced in the Senate by John Breaux (D.—La.).
Jeff Chester, executive director of the Center for Digital Democracy, sees the exemption of broadband Internet platforms from open access requirements as a government giveaway of valuable public resources to powerful corporations—one that strikes at the very heart of our political culture. “We’re talking about public policy for media and telecommunications—critical aspects of our democracy that help encourage the free flow of information and contribute to the institutions of journalism,” he says.
Without public policies mandating open access, both Chester and Lawrence Lessig predict our newfound information commons will become little more than an extraordinarily persuasive marketing tool. “The promise of many-to-many communication that defined the early Internet will be replaced by a reality of many, many ways to buy things,” Lessig wrote. “What gets offered will be just what fits within the current model of the concentrated systems of distribution: cable television on speed, addicting a much more manageable, malleable and sellable public.”
The public’s loss, however, is the industry’s gain. Both the cable industry and the large, regional local phone companies—Verizon, SBC Communications, BellSouth and Qwest—lobbied long and hard to prevent nondiscriminatory open access rules on broadband. Blair Levin, a telecommunications industry analyst with Legg Mason who was chief of staff to Clinton’s FCC chair Reed Hundt, says it’s a question of pure economics. “If you own the pipe, you can make a certain amount of money,” he says. “If you own the pipe and the content, you can make more money.”
Cable companies currently have monopoly control over their channels. But if they have to open up their systems to competing Internet service providers (ISPs), they fear losing out on the revenue they would collect from additional services like pay-per-view movies. “It’s a question of who owns the customer–who gets the customer dollar and how it’s divided up between the different content providers: cable, digital, movie studios and the recording industry,” Levin said.
Those who advocate corporate dominion over broadband services dismiss the notion that consumer choice will be curtailed. Marc O. Smith, spokesperson for the National Cable Television Association, says cable companies have begun to offer multiple ISPs and are finding it good for their bottom lines: “We think that’s enough of an incentive for it to happen, as opposed to the government telling us how and when to do it.” He insists that mandating nondiscriminatory open access “is a prescription for unintended consequences,” giving competitors grounds to manipulate the marketplace by mounting costly content discrimination challenges.
Smith adds that restricting where Internet users can go on the Net doesn’t make economic sense for the companies, because it would alienate their customers. “That’s like saying AOL/Time Warner Cable will only allow you to watch AOL/Time Warner channels,” he says. “But they also let you watch ESPN, which is owned by Disney, and MTV, which is owned by Viacom.”
There is, however, a big difference between handpicking the channels that appear on a cable service and opening up broadband lines to all comers. Chester suggests that the open platform of the Internet is being transformed into a landscape of “walled gardens,” with various kinds of barriers meant to keep people within their confines. He worries that those who don’t make deals with the companies controlling the broadband pipe—particularly citizen and community groups—will find themselves walled out, facing exorbitant charges for carriage.
The only game in town
Garry Betty, CEO of Earthlink, the nation’s third-largest ISP, suggests a certain amount of hypocrisy among cable companies that reject open access as regulation. “Stop for a moment and consider what’s being regulated,” he said in testimony before the Senate Judiciary Committee on the AT&T Comcast merger on April 23 this year. “Throughout the country, cable companies have had exclusive local franchises to operate the cable system in any given area. These franchises were created by government regulations. Actions that seek to limit cable monopoly power created by these regulations, and to give consumers increased choices in broadband services are, by definition, deregulatory.”
By comparison, Betty pointed out, the more than 6,000 ISPs across the country show that Internet access has always been competitive. In 96 percent of the country, he said, Internet users in even the smallest towns and rural areas can select from at least four ISPs, while city dwellers can choose among hundreds. “Compare this to cable, where over 96 percent of customers throughout the country have no choice in who their cable company is.”
Betty, who has negotiated deals for Earthlink to offer broadband service on AT&T Broadband, the nation’s largest cable operator, dismissed the argument that competition from DSL would negate the need for open access. That’s because DSL service is essentially unavailable for people more than three miles from a telephone central office. Therefore, he said, for more than a third of the country, cable will offer the only option for broadband Internet access over the next five years.
Like many new industries, broadband is experiencing some growing pains as it develops, works the kinks out of the system and figures out how to deal with Wall Street’s impatient expectations. A recent survey by Jupiter Media Metrix indicates that three-quarters of Internet users are, for now, content to stick with their dial-up access.
But Sue Ashdown, president of the American ISP Association, which represents thousands of mostly very small independent ISPs across the country, doesn’t believe people will remain satisfied with slow dial-up connections. She says the regional phone companies have been very belligerent with ISPs who have attempted to offer DSL. And she worries about FCC plans to revisit regulations that give companies like MCI, Cavalier and AT&T, who competitively supply bulk voice lines to ISPs, access to the phone lines. Ashdown considers that a direct threat to ISPs continued ability to provide even dial-up access.
The Center for Digital Democracy’s Jeff Chester urges the public, especially those in the progressive community, to become engaged in this issue: “The infrastructure and rules for the next media system are being established now. We may not see the ultimate outcome of these decisions for 10 or more years,” he says. “But if we want to ensure that we have as open a system as possible with progressive voices playing a prominent role, we have to shape that system now.”
Karen Charman is a New York-based investigative reporter who writes frequently for Extra!.