Hundreds of protests were staged across the country on Dec 7 in the latest uproar over a repeal of rules ensuring an open internet. The drumbeat of action can in good part be traced back to a yellow Victorian house in Worcester (MA). The home is the nerve center for Fight for the Future, a scrappy 10-person nonprofit that has helped lead the opposition to the change — even if its effort to protect so-called net neutrality has the longest of odds.
The receding ice has opened new passageways for high-speed internet cables. Point Hope, a gravel spit in northwest Alaska, is along one of the new routes.
It usually doesn’t take much to get people on the internet worked up. To get them really worked up, make the topic internet regulation. In the week since the Federal Communications Commission released a plan to scrap existing rules for internet delivery, more than 200,000 phone calls, organized through online campaigns, have been placed to Congress in protest. An additional 500,000 comments have been left on the agency’s website. On social media sites like Twitter and Reddit, the issue has been a leading topic of discussion.
Senators who called tech giants to Capitol Hill on Nov 1 to answer for their roles in Russia’s election interference differed along party lines over the Kremlin’s role in swaying the race, with Republicans offering an implicit defense of the legitimacy of President Donald Trump’s victory. After months of publicly sidestepping the issue, several Republicans used a high-profile hearing with executives of Facebook, Google and Twitter to dismiss the impact of Russia’s use of the sites to spread misinformation and buy ads to try to tip the election in President Trump’s favor.
Executives from Facebook, Google and Twitter appeared on Capitol Hill for the first time on Oct 31 to publicly acknowledge their role in Russia’s influence on the presidential campaign, but offered little more than promises to do better. Their reluctance frustrated lawmakers who sought stronger evidence that American elections will be protected from foreign powers. The hearing, the first of three in two days for company executives, served as an initial public reckoning for the internet giants.
This week, Sen Mark Warner (D-VA), the top Democrat on the Senate Intelligence Committee, will push for new answers. Executives from Facebook, Google and Twitter are set to testify at congressional hearings on Oct 31 and Nov 1 about the election and the power of their platforms Lawmakers are increasingly taking a critical tone with Silicon Valley, with Sen Warner among the harshest. He has already pushed a bill requiring the companies to disclose who paid for digital political ads, the biggest legislative effort so far to regulate the companies. Sen Warner’s position is a sharp reversal.
“The [Federal Communications Commission] has basically said: ‘Game on. We’re going to let you consolidate further than anyone had imagined,’” said Richard Greenfield, a media analyst at BTIG.
Consolidation of local broadcast stations could lead to more expensive fees for consumers as providers pass on ever-higher fees from broadcasters and content creators to subscribers. But to media companies, the mantra of late has been that bigger is better. For broadcast station companies in particular — including Sinclair, Fox and the Nexstar Media Group — owning more stations increases their power over cable companies, which pay to retransmit the stations. Fox’s motive for pursuing Tribune, which has more Fox affiliates than any other station owner, largely appears to be blocking a deal with Sinclair. It plans to form a joint venture with the Blackstone Group, an investment giant, in which Blackstone would provide the cash for a deal while Fox would provide its own television stations. If successful, Fox would then reduce its direct exposure to local television stations, while still holding on to a piece — and while stymieing a rival.
Makan Delrahim, the nominee for chief antitrust cop at the Justice Department, will have his confirmation hearing April 26.
If he is confirmed — and he is expected to be — his philosophies will help shape the corporate competition landscape for the next few years, at a time when mega-mergers like AT&T’s $85 billion acquisition of Time Warner. In an interview, Delrahim declined to address AT&T’s purchase of Time Warner, which is now undergoing regulatory review, or other large deals, saying he would “examine any matter according to evidence and economic analysis.” But he gave other hints of how he might act as the department’s top antitrust official. Specifically, Delrahim, a former lobbyist, said he would not go after a company just because it was big, and would do so only if there were violations of antitrust law. “Just like any other industry, if there is wrongdoing, we would investigate,” Delrahim said. But “federal laws should not be used as a fishing expedition by government.” He also intimated that he was skeptical of antitrust action against intellectual property rights holders. In a 2007 statement, he had warned that cases that blended intellectual property rights with antitrust enforcement could hamper innovation.
In Washington (DC), AT&T has painted itself as an underdog that needs to merge with Time Warner in a blockbuster $85 billion deal to compete with powerful cable companies. But in several cities and states, AT&T’s actions send a different message.
In Nashville and Louisville, AT&T has sued to make it harder for rival broadband providers to use utility poles. In Missouri, Tennessee and North Carolina, the company has pushed for laws that block municipal broadband providers. In San Francisco, AT&T has fought efforts to open up apartment buildings to more internet service providers. In other words, AT&T has positioned itself as the incumbent telecommunications juggernaut that has acted to hamper competitors locally. With its giant deal with Time Warner under review at the Justice Department, AT&T’s contrasting federal and local actions are glaring. While AT&T’s two-sided messaging follows a strategy used by many big companies, any evidence that the telecom company thwarts local rivals could make the deal review tougher and invite costly conditions, telecom antitrust experts said — even though they still expect the acquisition to be approved.
Federal Communications Commission Chairman Ajit Pai is taking the next steps to unwind Obama-era rules and other regulatory efforts that had restricted the abilities of telecommunication companies and broadcasters. With two items up for vote on April 20 that are expected to pass, Chairman Pai is carrying forward a swift Republican attack on telecom rules. The rollback will empower big telecom and media firms that have lobbied aggressively for deregulation, but consumer groups say it may also eventually put consumers at risk of higher prices and fewer options for services and media.
The two specific items to be voted on include a plan to make it easier for broadband providers to charge other businesses higher prices to connect to the main arteries of their networks. The action would clear the way for internet service providers like AT&T and CenturyLink to raise connection fees charged to hospitals, small businesses and wireless carriers in many markets where there is little or no competition for so-called backhaul broadband service. The other item up for vote is a move to ease the limit on how many stations a broadcast television company can own. The action is expected to invite more consolidation in that sector.