The Case Against Deregulation, Repealing Section 230, Looking Back At AT&T’s Breakup

April 26, 2021—An article published by The American Prospect argues why deregulation is not inherently pro-competition as the Biden Administration prioritizes universal broadband coverage for Americans.

Sean Gonsalves and Christopher Mitchell penned a piece that detailed why properly funded, public, municipal broadband services are necessary to promote competition and affordability, particularly in rural and underserved communities across the U.S..

The authors explored a case in Colorado involving a municipal broadband provider known as Clearnetworx and the telecommunications company Lumen Technologies, then known as CenturyLink. Clearnetworx was awarded a $1-million grant to deliver high-speed internet via fiberoptic cable to Ridgeway, CO.

Before it could begin deployment, however, their grant was vetoed by CenturyLink under what Gonsalves and Mitchell called a bureaucratic “buzzsaw,” known as “right of refusal,” whereby incumbent providers can simply veto potential competition.

Gonsalves and Mitchell point out in their article that to their knowledge, every state with a comparable broadband grant has similar laws on the books.

Not only did CenturyLink veto the grant, but they then turned around and took it for themselves. The difference was that while Clearnetworx had committed to laying fiber, CenturyLink felt no such obligation, instead opting to marginally upgrade its existing DSL network in the region.

Gonsalves and Mitchell state that efforts to utilize municipal broadband will be a crucial component of Joe Biden’s American Jobs Plan; broadly, the administration hopes to divert federal dollars to “providers with less pressure to turn profits and with a commitment to serving entire communities.”

The authors made the case that deregulation is not pro-competition, despite what many legislators—both Republican and Democrat—would have their constituents think.

“In short, the barriers to competition and investment tend to be the big ISPs, and the games they play as powerful incumbent providers,” they wrote, “Focusing on deregulation when Charter Spectrum or AT&T can use their market power to squash rivals six ways from Sunday is like arriving at the emergency room with a gunshot wound, only to have the doctor focus solely on the toe you stubbed last night.”

One expert’s take on why he is “repeal not reform” for Section 230

Last week, president and founder of the research consultancy Precursor, Scott Cleland, published a piece with the Daily Caller arguing that it would be better to repeal Section 230 rather than simply reform the internet liability law. Not repealing it, he argued, would “perpetuate lawless U.S. Internet policy and guarantee Big Tech remains unaccountable and Americans remain unprotected online.”

Cleland took the position that repeal is inevitable and that it is out of date. He also pointed out that at the time, only one U.S. senator claimed to have broadband service, and that the average American with broadband access only used it for an average of 30 minutes per month.

He also argued that members of Big Tech have “asserted themselves as virtual global governors and unaccountable private regulators,” and hide behind “opaque algorithmic rule of code and take-it-or-leave-it” terms of service.

Cleland also made the case that Section 230 is not only a threat to those who consumer Big Tech’s services, but it has also presented a greater national security and public safety concerns. He pointed to the 1000-plus open investigations into Chinese espionage and the SolarWinds hack as evidence that Section 230 has weakened the U.S.’s defensive cybersecurity capabilities.

Looking back on the break-up of AT&T

“When Wire was King: The Transformation of Telecommunications” is an upcoming documentary that examines the telecommunications market since its inception. In a recent blogpost on their website, the production team analyzed the legacy and ramifications of AT&T’s breakup when they were compelled to cede their control of Bell Operating Companies.

The blogpost lauded the move, stating that criticism that it may have stunted innovation was blown out of proportion; as a monopoly, Bell Labs was not incentivized to innovate, and breaking up the monopoly was more beneficial for innovation, according to the post.

The post went on to argue that the breakup not only improved innovation, but it also lowered cellular backhaul costs and improved competition.

“When Wire was King” will feature interviews with dozens of experts who shaped the telecom industry. The production team maintains an active presence online and has released a trailer for the project.