Is there a connection between anti-competitive behavior and anti-democratic behavior?
And, would you call an industry in which more than 75% of the business is done by just 4 mega-companies really competitive?
According to the former, that is to say pre-Trump, Chair of the Federal Communications Commission Tom Wheeler, Comcast, AT&T, Charter, and Verizon are the lions who share among themselves 3 out of every 4 dollars made by providing residential internet services in America.
Which might not be such a troubling thing if the four big companies actually did compete vigorously with one another. But that’s almost never the case. In most areas of the United States, just 1 or 2 of those ISPs is actually open for business; regional monopolies often rule.
The Internet Service Provider oligarchy’s real competition for control of the online economy does not come from within, but from the 5-headed oligarchy of content providers: Amazon, Apple, Facebook, Google and Microsoft, who, in the worlds of the NY Times’ Farhad Manjoo, “control much of the online infrastructure, from app stores to operating systems to cloud storage to nearly all of the online ad business.”
Check out the record of how those 5 companies respond to competition: they try to crush it, or swallow it, as ISP AT&T did when it bought up content provider Time Warner. This is the opposite of competition. This is vertical integration. And the logic of vertical integration is this: if ISP AT&T can help its corporate content provider Time-Warner gain market share and money, it will.
Until the Trump FCC led by Chairman Ajit Pai rolled back net neutrality there were specific rules that prohibited AT&T or any service provider from doing any such corrupt favors for itself. ISPs used to be forbidden to block or throttle, that is, slow access to any content from any provider. Now with net neutrality gone, that rule is null and void.
Now, with the FCC ceding all regulatory authority over the internet to the Federal Trade Commission, we consumers have no say in what we can see online, or how easily and efficiently we can pop it onto our favorite screen. And we no longer are protected against what is called paid prioritization, also known as pay for play, where ISPs can charge higher prices for selected content or selected services.
The charges for on-demand programming and the wedding-cake tiers of cable or satellite TV services are fine examples of paid prioritization, and mark this down – the ISPs which are promising never to block or throttle content are, according to Cecilia Kang in the NY Times, only saying “they won’t engage in most forms of paid prioritization.”
For Comcast, AT&T, Charter, and Verizon this is weasel-wordage for, we will get a foot in the door that opens higher charges for our customers. In other words, “some forms” of pay for play? Straight ahead.
And by the way, why would anyone believe the ISP companies’ promise to protect content democracy, when they don’t have to. Without FCC regulation in force, the ISPs can do anything they want as long as they make it public – which, of course, can mean, putting it into the fine print of their Terms of Service, the least-read prose in written literature.
If Americans hear less political dissent on the internet and see fewer odd-ball characters or innovative small-scale start-up companies offering new products or services — and when they find their internet service bills are growing — they can say, it all started here, when Ajit Pai and Donald Trump’s FCC killed off net neutrality.
Ali Velshi was born in Nairobi and raised in Toronto. He is the Chief Business Correspondent for NBC News and and co-anchor with Stephanie Ruhle of Velshi & Ruhle on MSNBC. He was CNN’s Chief Business Correspondent, Anchor of CNN’s Your and a co-host of CNN International’s weekday business show World Business Today. In 2013, he anchored at Al Jazeera America until joining MSNBC last October. He is the author of 2 books, a winner of a National Headliner Award for Business & Consumer Reporting and a 3-time nominee for an Emmy Award.