Recently, President Donald Trump and Federal Communications Commission Ajit Pai held a news conference to announce “two new steps” that together would position the United States as a leader in deploying 5G wireless networks. There were three distinct problems with the announcement: the steps were not new, they did not advance critical 5G deployments, and they did nothing to help American leadership in driving and benefiting from the next big transition in wireless communications.
Technology-driven changes—like those we are presently experiencing—produce demands for security and stability that pose a threat to liberal democracy and capitalism. Across the world, autocrats are on the rise because they claim they can deliver answers; symbols such as Brexit or the Wall pose as solutions; and old economic “isms” are reborn as “new” solutions.
There can be little doubt that the major digital companies have gained a level of economic control akin to the industrial barons of the Gilded Age. It is important to take steps to introduce much needed competition into the digital marketplace. Clearly, a more active review of mergers is necessary, even when the acquired company is comparatively small.
Facebook CEO Mark Zuckerberg’s call for new rules for the Internet is a start. The four proposals he makes open the door to a meaningful discussion about the effects of internet capitalism. Now what is needed is a similar look at the issues underlying the market dislocations caused by a handful of internet companies. As significant as Zuckerberg’s proposals are, it is important to recognize they deal with the effects of internet commerce more than their causes: the business model of internet companies.