Why Jennifer Granholm Really Is Helping Destroy the Internet

Politics is about power, and it's important to realize that or else we will get suckered.  For instance, earlier today I got some pushback on a post I wrote condemning Governor Jennifer Granholm for not forcing net neutrality protections in a Michigan cable franchising bill.  I don't want to get too much into the weeds of telecom legislation, because this isn't about policy, it's about power deceiving progressives.  InterrupT has an interesting post at Michigan Liberal where he argues that a franchising bill that looks like it's about to pass, HB 6456, isn't really related to net neutrality.  Sadly, he couldn't be more wrong, and it's the type of wrongness that is going to lose us our free and open internet. Here's an email from a knowledgable friend of mine on how these guys work and why it's not as simple as thinking that we can just put through net neutrality protections.

Net neutrality politics have gotten a shade complex.  Here's a stab at sorting out why it's important to pass net neutrality in a state, why it must be done in the same package as "franchise reform," and why it's critical even though it would only apply to Internet connections in that state.

Let's start with power.  Ultimately, all politics is a competition for the power to change things.  Net neutrality pits the power of the cable and phone companies against...well...pretty much everybody else.  They are more organized, well-financed and professional in the game of politics than "everybody else", which explains why they are so successful.  How does telco power operate?  I'll give you an analogy from the war on drugs (bear with me).  Think of the telcos as Columbian drug lords.  No matter how many times government pesticide planes fly over and eradicate fields of poppies, the drug lords just plant elsewhere.  Its just too lucrative.  If you stop the flow of power in one direction, it just finds a way around you.

This year in Washington, the telcos tried to get the GOP majority to pass a bill custom designed to make them piles and piles of money.  It was an unprecedented attempt at a power grab.  The telcos essentially wanted communications law to be rewritten to accommodate their business models.  They wanted a few things.  They wanted to start offering cable TV to compete with cable companies.  Great, right?  Well, sort of.  The cable companies are required by your local government to offer service to everyone in town, not just the rich neighborhoods.  The telcos want to do cable TV, but not for everyone.  They want to cherry-pick the best customers.  They don't want to deal with the so-called "build-out" requirements your local government will demand (and quite rightly) to eliminate the nasty practice of red-lining poor and rural areas.  Second, the telcos want to eliminate net neutrality once and for all.  They want to plant themselves like a giant toll booth in the middle of the information superhighway.  Cable companies would be fine with that too, since they'd have their own toll booths.  This package of anti-public laws is sold under the moniker of "franchise reform." What you have hear with "franchise reform" is a rewrite of communications law to support 2 business models for cable TV and broadband:  the telco and cable business models.  That kind of market power is extraordinarily profitable.  It's the kind of semi-monopoly power that requires serious consumer protections that these companies reject at all costs.

Long story short.  They lost in Washington.  Everybody else won.  That's an incredible victory brought to you by 1 million real people across the country who fought for net neutrality with the Save the Internet Coalition..  Google might have helped a little too.

Here's where the drug lord analogy comes in.  What does telco power do when it fails to win in Washington?  It goes to the states.  They believe they can get the same thing at the state level.  They can convince state legislators that build-out and universal competitive cable TV services aren't important.  And they can pretend net neutrality doesn't matter.  If they win in enough states, then they will have effectively outflanked Washington.  That's their strategy.  They'll have what they want, and we'll have nothing.  Worse, when they don't need things from politicians, there is nothing to extract from them in a compromise. So, they'll focus all their time on killing good things we'll try to get politicians to do.

So what do we have to do?  We have to go to whatever states they go to.  And we have to put net neutrality and build-out requirements into their "franchise reform".  If we don't, they'll win.  Simple as that.

So why does net neutrality have to be right in the middle of "franchise reform" bills?  First, it's because "franchise reform" is a rewrite of communications law, and any such rewrite must contain net neutrality, or else we risk never having a big enough vehicle to carry it. You don't get two bites at the apple.  Major rewrites don't happen often, and if major issues are left out, then they stay out. Second, it's because of the way telco power works.  Once they have "franchise reform" in your state, they will have market power in your state.  They will no longer need to ask your state legislature for anything big.  And they will turn all of their lobbying clout against killing all forms of net neutrality that appear in stand-alone bills and brow-beating any legislator that stands up for it.  If we succeed in passing a net neutrality bill against the odds, they will sue the state government that dares to pass it.  And they could well win because state claims to jurisdiction over this issue aren't as good as federal claims.  Which leads me to the next question...

Why does a state have power over net neutraity?  Isn't the Internet national and global?  Yes, of course it is.  So are environment protections.  But when the federal government won't fix a problem, states have to do it.  If enough states do the job, the federal government takes note and moves on an issue.  More importantly, it shows telcos that the states won't just roll over and service them.  This is about who will stand up and say "no" to the telcos first.  The federal government punted in 2006 and did nothing.  Now the states will have the chance to do the people's work.  This is politics.  It's a competition for power.  And we need our state legislators to represent our power so that we can stop the telcos by any means necessary and protect and open internet.

These are some seriously bad players.  I'm hanging out with Chris Bowers tonight, and he's telling me how his West Philly neighborhood, because it's predominantly minority and mostly poor, has really bad internet and cable service.  They aren't trying to expand cable service to the state, they are trying to cherry pick profitable neighborhoods to serve, and to wreck the internet in the process.  They have convinced a whole lot of people to go along with them, because they have spent billions of dollars for decades.

What's frustrating is that InterrupT should not be wrong - good policy options should be debatable assuming good faith from various parties. But that's just not how these players operate, and we can't be charitable towards their intentions when it's very clear that their track record suggests they deserve skepticism. I hope that Granholm does the right thing and doesn't allow this bill through without net neutrality protections.  If she doesn't, and this is the sad part of politics, no matter how much you like and respect her, if you use the internet, she has sold you out.

Tags: Jennifer Granholm, Michigan, net neutrality (all tags)

Comments

22 Comments

Re: Why Jennifer Granholm Really Is Helping Destro

I can concur about the crappy Internet service in West Philly. Even though I live on campus, my friends who live off-campus have a connection that drops out pretty occasionally. It's provided by Comcast, but it's serviced by some no-name local provider who's very difficult to contact.

by PsiFighter37 2006-12-11 06:59PM | 0 recs
What to Do?

Matt,

Politicians owe us a lot this round.  How can we help in the net neutrality fight?

I suggest that we give language to our state and local politicians to be introduced in the next legislative session that guarantees net neutrality.  

So Matt, any ideas on what the language should look like and include?  (It really helps to give your legislator a complete package that they can turn over to the back room writers to make into legislation and figure out where it fits into the statutes).  At least it will hit the floor looking like something that we would want.  

You want to take this to the next level, we need the language.  Otherwise we are fighting defense from the telecoms attacks and they have the initiative.  

by NvDem 2006-12-11 07:49PM | 0 recs
I Don't Understand

If this really should be a federal issue, shouldn't we be agitating to make it one? Trying to pass a bill that guarantees net neutrality, not just trying to stop one (or 50) that undermines it?

by BingoL 2006-12-12 04:49AM | 0 recs
Re: I Don't Understand

Yes, we should and we are agitating to make it one.

by Matt Stoller 2006-12-12 05:04AM | 0 recs
Can you comment on the New Jersey bill?

that passed, I believe.  I do know that verizon is covering a fairly limited set of towns -- not mine for example.  But did verizon basically get everything they wanted there?  Was there any net neutrality issue?  Somehow I know nothing about it.  

by John DE 2006-12-11 07:53PM | 0 recs
Sorry, Charlie. No Sale.

Matt...

Sorry, but I have to say this is a very shallow and sensationialized analysis.  I'm too tired (and quite frankly, too ill thanks to the midwestern weather) to go into the specifics, but this is just sloppy anecdotal evidence with a hyperbolic title.

Jennifer Granholm is helping to destroy the internet?  Since when?  Since when has she shown ANY advocacy for the current bill?  By my memory, there is none.

You blame the figurehead, and not the republican legislature in MI that has pushed this through.

We don't know what Granholm will do at this point.  I'm sure she (and her staff) are taking others' -- and your -- concerns about the leglistation to heart for the sake of solid policy.  But to warrant that Granholm is "helping to destroy the internet" through anecdotal evidence in Pennsylvania policy is outright ridiculous.

I care as much about net neutrality as anyone in the blogosphere.  But this diary does you no favors.

Cheers,

Quaker.

by quaker21 2006-12-11 08:13PM | 0 recs
Re: Sorry, Charlie. No Sale.

I care as much about net neutrality as anyone in the blogosphere.  

No, you don't.  You don't because you aren't willing to hold someone like Granholm responsible for the consequences of her policy choices.  Yes the Republican legislature is at fault here, but so is she.

by Matt Stoller 2006-12-12 05:05AM | 0 recs
Core Conflict is Combined Ownership
There are a number of problems with these video franchise bills. I know from having been part of an attempt to defeat the BellSouth (AT&T?) version of this in Louisiana earlier this year. Maybe some of that will come out in later posts.

But, I'd like to focus on the fundamental concentration of power that lies at the heart of the problem of net neutrality AND with these video franchise bills. The core problem is the vertical ownership of both the network itself AND the services that will be delivered by those networks.

That is, AT&T, Verizon and the cable companies own the physical networks (wires, routers, switches and hubs) AND want to control the content delivered -- or, at least, a very large part of it.

The fairly recent history of these companies proves that we will not have neutral networks so long as the ownership of the physical network and the content delivered over the network is allowed to be concentrated.

Here's how we know this:

In the late 1990s, after the current Telecommunications Act took effect, the Regional Bell Operating Companies (RBCOs) were required to open their networks to competitors. They hated that and, really, provided incapable of doing it. Once a monopolist, apparently, always a monopolist. They engaged in anti-competitive practices to force their upstart competitors off their networks; ultimately, succeeding through a combination of financial, political and regulatory manipulations helped the RBOCs succeed.

At one point, the Pennsylvania PUC recognized the problem for what it was. Around 1999-2000, the Penn PUC considered forcing the phone company (I think it was BellAtlantic) to separate itself into two companies: one that would own the physicial network and the other that would sell services over the network, just like the other service providers. The separation never happened, but that is where the real issue is.

The phone companies then wanted to act as both wholesalers (selling access to their networks to other companies) and retailers (selling services to consumers over th networks they owned). But, because the competing service companies were, in fact, competing against their own retail (services) division, they faced a conflict of interest of having to play nice (provide network access) with their competitors (at least, in the service provider sense).

Today, the phone and cable companies are bigger, their networks are faster, their debt loads are heavier, and they still want to be both wholesalers and retailers. This is the same conflict of interest as existed a decade ago. Instead of network resale, the term now is network neutrality. Once again, though, this conflict will ultimately drive the network owners to discriminate against content/services that they do not own or do not originate.

That is, Verizon and AT&T have, in their earlier competition against the competitive local exchange carriers almost a decade ago, proven that they cannot be trusted with both ownership of the network AND the ability to operate as a service provider. That is, we know from their prior respective prior histories that they will ultimately discriminate against those content providers who pay for access to their networks (even if those providers pay premium prices) because that's precisely what they did in a similar set of circumstance nearly a decade ago when the financial stakes for them were lower.

That is, AT&T, Verizon and the cable companies will ultimately not be able to help themselves: their collective monopolistic tendencies, borne in their corporate DNA, will compel them to discriminate against network traffic from Google, Yahoo, Microsoft, Apple and other content providers because of the network owners' engrained belief that they should own and profit from everything that moves over their networks.

Yes, they will erect barriers that will stymie the development of new companies and technologies. But, they will also turn on the companies that they initially welcome (albeit at premium prices) to their networks.

Let's get real. The only way the concept of network neutrality has any chance of being anything more than a meaningless slogan is if we are willing to take the step that the Penn PUC could not bring itself to take: force the phone and cable giants to decide whether they want to be network owners or service providers. They can't be both.

We will never have networks that operate neutrally to all content providers unless and until we separate ownership of the physical network from the ownership of the content layer. The video franchise bills help tighten that concentration of power and, therefore, work against the concept of network neutrality.

by Mike Stagg 2006-12-11 08:45PM | 0 recs
Re: Core Conflict is Combined Ownership

Good post and a good solution!

by InterrupT 2006-12-11 09:17PM | 0 recs
Re: Core Conflict is Combined Ownership

This is right, and net neutrality is the first stage.

by Matt Stoller 2006-12-12 05:05AM | 0 recs
Re:

Your argument has a fatal flaw, it assumes that we have to bargain for a neutral network.  No amount of bargaining would change the telecoms minds about setting up a two tiered Internet.  It would take a lot more than just allowing AT&T to provide terrestrial video services in Michigan to get them to change their minds.  AT&T already owns at least half of Dish Network, so they are already providing video services in Michigan (along with Internet and telephone services), they just also want to provide terrestrial video services.  If every state that hasn't done so already, denied them franchising rights to their state, they would instead improve their Dish Network service so more people could get a better signal.  Also we can't forget that Verizon isn't asking for franchising rights in Michigan yet would still be allowed to operate in Michigan even if the new bill in enacted. So what do Verizon have to bargain for?  They can just as easily enact a two tiered network as anyone else.

Your argument is also flawed in that you assume that this bill allows for a two tiered Internet, and the point in my post that you link to is that it does not allow such a thing (but it also doesn't stop it).  You are right however that this bill could allow for a greater abuse of the telecoms power.

It is true that the Telecoms have an insanely powerful lobby, which is why a bill has yet to be passed at the national level, but that doesn't not mean that they will always win.  Let's give the new Democrats in congress a chance to address this important issue at the national level.  I know that they are aware of the issue, I have written Senator Levin about the issue myself.  He sent me a back a nice letter stating that he supports a neutral Internet and would support a bill outlawing a two tiered Internet.

Please don't take my comments or anyone else as assault on you or on net neutrality.  This bill has been a hotly debated topic in Michigan, gaining a lot of press about it and a lot of talk on the blogs.  Plus the titles  "Governor Granholm Selling Out the Internet?" and "Why Jennifer Granholm Really Is Helping Destroy the Internet,"  didn't really help you with Michigan readers.  I don't think anybody is saying that this bill is perfect; it still  needs provisions insisting the service be rolled out to all parts of the state not just the wealthy, most profitable parts.  I think most people want a neutral Internet, but in order to be taken seriously we need to make the best possible argument.

by InterrupT 2006-12-11 09:16PM | 0 recs
Re:

No amount of bargaining would change the telecoms minds about setting up a two tiered Internet.  It would take a lot more than just allowing AT&T to provide terrestrial video services in Michigan to get them to change their minds.

Their entire strategy is predicated around getting video franchising.  That's what they want, and if they get it they will dedicate all their power to preventing any other legislation from coming through.  

People who have been around the lobbying business for a long time tell me that this is how they operate.  You can't just beat these guys, you have to outflank them.

Let's give the new Democrats in congress a chance to address this important issue at the national level.  I know that they are aware of the issue, I have written Senator Levin about the issue myself.  He sent me a back a nice letter stating that he supports a neutral Internet and would support a bill outlawing a two tiered Internet.

The new Democratic Congress is split on the issue, and they will not affirmatively make net neutrality a priority unless they have to.  

Please don't take my comments or anyone else as assault on you or on net neutrality.

But that's what they are.  You're a smart guy, but you're being played by the telecoms.

Plus the titles  "Governor Granholm Selling Out the Internet?" and "Why Jennifer Granholm Really Is Helping Destroy the Internet,"  didn't really help you with Michigan readers.  I don't think anybody is saying that this bill is perfect; it still  needs provisions insisting the service be rolled out to all parts of the state not just the wealthy, most profitable parts.  I think most people want a neutral Internet, but in order to be taken seriously we need to make the best possible argument.

AT&T is going to fuck you guys over, you watch.  You could have passed a different bill with an incoming Democratic legislature, but Granholm isn't doing that.  It's just terrible negotiating because she's feeling intense heat from the telecom companies.

by Matt Stoller 2006-12-12 05:10AM | 0 recs
Re:

Matt, here's an idea:

Instead of insulting everyone on here who doesn't agree with everything you say, how about educating people on stuff like this.  Over at Michiganliberal we were discussing this stuff for a month, and a lot of us couldn't tell what the consequences of this bill would even have.  Then you show up yesterday with a post and act like we've been AWOL on the whole deal.

You know something we don't?  Then get on it more than 24 hours before the bill passes the legislature.

And before you get all uppity, know that I already wrote my State Senator on this matter.  So did most of us.

by djtyg 2006-12-12 12:17PM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

Decades? The internet in popular form has been around for maybe 1.

by MNPundit 2006-12-11 09:23PM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

The problem is we aren't on the offense, we're playing defense.  Attack them and break them up.  Or write legislation forcing them to sell time on their networks to anyone, like dial up.  Or something else.  Keep them so damn busy they don't have time to try and gain monopoly pricing power.

by Ian Welsh 2006-12-11 09:47PM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

Seriously, there has got to be some way to go on offense.  If the telcos get to choose any of 50 freaking states to fight in, and they choose the most favorable ones every time, how are we supposed to win?  It's like trying to win a national gay rights fight in South Carolina.

If they take it to the states, we can take it to the states.  We have friendly states, possibly including California, New York, New Jersey, Illinois, and Massachusetts.   Those are big ones.  Can we win standalone net neutrality laws there?  Cause if we can annihilate this new business model in 30% of the retail market before it can ever be actualized anywhere, maybe we win.

I'm a johnny-come-lately and not a strategist for this issue, so I've got no illusions that I'm thinking of a brilliant plan that no one else has thought of.   But is this a workable response, and are we working on it?  Offense is good.

by texas dem 2006-12-12 12:21AM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

this is naive. the telcos broke up at first only because the ceo of mci dedicated himself to it. the govt. never had much leverage on AT+T

AT+T , the first monopoly, was a big problem because the issue at stake was, that they would control the equipment - if you wanted to buy a phone, you had to buy it from at+t - they stated that any equipment that attaches to their network has to be from their company

alright, here is how we break this stranglehold -
first, completely ignore matt and his sexual riffs about power and politics - the government will never be able to stop the telcos if they have designs on hurting us. to be sure, you want your rep. to be on t he right side of the battle but this is a war that can be fought in an arena where one nations rules won't matter much in the long run

instead, do this:

get your cellphone somewhere else other than the service provider. Sounds simple, doesn't it?

How many cellphones do you buy? one every two years or so? Getting time to buy a new one?

Alright. just buy your cellphone from an independent vendor, without a service contract, in an unlocked state.

Then, buy a sim card from anyone or get a sim card pay-as-you go.

That is all we have to do, it is very simple. because telcos are not making that much money off land lines any way - they want us fighting this battle so that they can make a fortune off us in this wireless market and that is where america
really is in trouble

try this simple exercise if you dont believe me.

there are 180 million cellular subscribers inthe united states of america. over 200 million cellphones.

alright, each subscriber has to pay at least 20.00 bucks, probably 40 bucks a month..

how much money is that?
per month

do i make myself clear? follow the money..

by heyAnita 2006-12-12 03:28AM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

ps matt is  right about jennifer tho, he's just wrong about how to get the telcos where they live.. :-) hit them in their soft wireless hotsppot!

by heyAnita 2006-12-12 03:30AM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

The problem is we aren't on the offense, we're playing defense.

We're on both offense and defense.  This is the defense part.

by Matt Stoller 2006-12-12 05:11AM | 0 recs
Re: Why Jennifer Granholm Really Is Helping Destro

Matt/anyone --

If you were going to pass something at the local/city level that would help force true Net Neutrality what would the law do?/look like?

Is it possible for something at the locel/city level to be of help in this fight?

Thanks for any guidance

by JoeTrippi 2006-12-12 03:16AM | 0 recs
Politics is about power

Politics is about power only to those who don't have it. When you do, it becomes less about power and more about maximum utilization of scarce resources, Matt. It becomes a game that is necessary for large organisms with several moving parts, to play.

Politics and the art of the polity have always been a dance, not a demolition.

by heyAnita 2006-12-12 03:22AM | 0 recs
West Philly

I lived in West Philly about 8 years ago. Cable service was awful. This was before high-speed, so we only had dial-up, which was still par for the time. Ended up getting satellite, which worked like a charm.

by LiberalFromPA 2006-12-12 05:27AM | 0 recs

Diaries

Advertise Blogads