Chicago - Oct. 22, 2020
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Bust 'Em All: De-Monopolize Tech, Telecoms And Entertainment

The early 1980s were a period of tremendous foment and excitement for tech. In the four years between 1980 and 1984, Americans met:

* The Vic-20 (1980)

* The Commodore 64 (1981)

* The IBM PC (1982)

* The PC-compatible ROM (1984)

But no matter how exciting things were in Silicon Valley during those years, even more seismic changes were afoot in Washington, D.C., where a jurist named Robert Bork found the ear of President Reagan and a coterie of elite legal insiders and began to fundamentally reshape U.S. antitrust law.

Bork championed an antitrust theory called "the consumer welfare standard," which reversed generations of American competition law, insisting that monopolies and monopolistic conduct were rarely a problem and that antitrust law should only be invoked when there was "consumer harm" in the form of higher prices immediately following from a merger or some other potentially anti-competitive action.

Tech and lax antitrust enforcement grew up together. For 40 years, we've lived through two entwined experiments: the Internet and its foundational design principle that anyone should be able to talk to anyone using any protocol without permission from anyone else; and the consumer welfare standard, and its bedrock idea that monopolies are not harmful unless prices increase.

It's not a pretty sight. Forty years on and much of the dynamism of technology has been choked out of the industry, with a few firms attaining seemingly permanent dominance over our digital lives, maintaining their rule by buying or merging with competitors, blocking interoperability, and holding whole markets to ransom.

Thankfully, things are starting to change. Congress's long-dormant appetite for fighting monopolists is awakening, with hard-charging hearings and far-reaching legislative proposals.

And yet, anyone who hangs out in policy circles has heard the rumors: this was all cooked up by Big Cable, the telecom giants who have been jousting with tech over Net Neutrality, privacy, and every other measure that allowed the public to get more value out of the wires in our homes or the radio signals in our skies without cutting in the telecoms for a piece of the action.

Or perhaps it's not the telecoms - maybe it's Big Content, the giant, hyper-consolidated entertainment companies (five publishers, four movie studios, three record labels), whose war on tech freedom has deep roots; given all their nefarious lobbying and skullduggery, is it so hard to believe they'd cook up a fake grassroots campaign to defang Big Tech under color of reinvigorating antitrust?

In any event, why selectively enforce competition laws against tech companies, while leaving these other sectors unscathed?

Why indeed? Who said anything about leaving telecoms or entertainment untouched by antitrust? The companies that make up those industries are in desperate need of tougher antitrust enforcement, and we're here for it.

Who wouldn't be? Just look at the telecom industry, where cable and phone companies have divided up the nation like the Pope dividing up the "New World," so that they never have to compete head-to-head with one another. This sector is the reason that Americans pay more for slower broadband than anyone else in the world - and the pandemic has revealed just how bad this is.

When Frontier declared bankruptcy early in the COVID-19 crisis, its disclosures revealed the extent to which American families were being victimized by these monopolies: Frontier's own planning showed that it could earn $800,000,000 in profits by providing 100gb fiber to three million households, but it did not, because the company's top execs were worried that spending money to build out this profitable fiber would make the company's share price dip momentarily, and since a) these execs are mostly paid in stock; and b) none of those households had an alternative, Frontier left nearly $1 billion on the table and three million households on ancient, unreliable, slow internet connections.

The big telcos and cable operators are in sore need of adult supervision, competitive pressure, and Congressional hearings.

And things are no better in the world of entertainment, where a string of mergers - most recently the nakedly anticompetitive Disney-Fox merger - has left performers and creators high and dry, with audiences hardly faring any better.

Anyone who tells you that we shouldn't fight tech concentration because the telecom or entertainment industry is also monopolistic is missing the obvious rejoinder: We should fight monopoly in those industries, too.

In boolean terms, trustbusting tech, entertainment, and cable is an AND operation, not a XOR operation.

Besides, for all their public performance of hatred for one another, tech, content, and telcos are perfectly capable of collaborating to screw the rest of us. If you think tech isn't willing to sell out Net Neutrality, you need to pay closer attention. If you think that tech is the champion who'll keep the entertainment lobby from installing automated copyright filters, think again. And if you think all competing industries aren't colluding in secret to rig markets, we've got some disturbing news for you.

Surviving the 21st Century is not a matter of allying yourself with a feudal lord - choosing Team Content, Team Tech or Team Telecom and hoping that your chosen champion will protect you from the depredations of the others.

If we're gonna make it through this monopolistic era of evidence-free policy that benefits a tiny, monied minority at the expense of the rest of us, we need to demand democratic accountability for market abuses and demand a pluralistic market where dominant firms are subjected to controls and penalties, where you finally realize birthright of technological self-determination.

If Big Cable and Big Content are secretly gunning for Big Tech with antitrust law, they're making a dangerous bet: that trustbusting will be revived only to the extent that it is used to limit Big Tech, and then it will return to its indefinite hibernation. That's not how this works. Even if tech is where the new trustbusting era starts, it's not where it will end.

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Previously by Cory Doctorow:

* Abolish Silicon Valley.

* "Don't Believe Proven Liars" - The Absolute Minimum Standard Of Prudence In Merger Scrutiny.

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Comments welcome.



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Posted on September 29, 2020


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