‘Sloppy’ Goliaths need their myths busted

With sheer strength and overwhelming odds on their side, they were frontrunners to win their battles. But Goliath, Apollo Creed, and whoever lost to the “Mighty Ducks” have one thing in common: sloppiness late in the game. The same can be said of America’s telecom giants.

As the FCC crafts the first-ever national broadband plan, and with $7.2 billion in stimulus funds for broadband expansion on the line, the massive phone and cable companies are falling over themselves to defend the embarrassing state of Internet access in America. The agency’s public comment period closed this week.

On Monday, Blair Levin – the FCC’s broadband czar – expressed disappointment at the industry’s official comments, citing a general “sloppiness of thinking” and a tireless stream of “get-mine-first” proposals.

But just like a real-life team of “MythBusters,” Free Press countered the industry’s drivel this week with a data-driven reply that took apart many of its more absurd and deceptive arguments.

Free Press’ reply provides evidence that the telecom giants Comcast, AT&T and Verizon want a “do-nothing” plan, which would leave consumers where we’re at now: ranked 14th in speed, 20th in penetration, and 22nd in price, with a duopoly broadband market to thank for it. Although broadband has become an economic, democratic and cultural necessity, 40 percent of Americans do not have high-speed Internet for reasons such as affordability and availability.

I’ll outline some myth-busting highlights here (although I encourage you to check out our 62-page report!):

Industry Myth #1: Deregulation promotes investment and the spread of the Internet.

Reality: AT&T and its cronies are quick to brag about how much they’re investing in their networks, and how any regulation would deter further investment. However, the data has shown that regulation designed to prevent abuses of market power does not discourage investment.

For example, the FCC applied a Net Neutrality condition to the 2006 AT&T/Bell South merger, forcing the company to adhere to openness for two years. Gross capital investment actually increased immediately following the imposition of the Net Neutrality merger condition, and continued to rise after that despite the regulation. The correlation between regulations such as this and disinvestment is just not there. For more data and examples, see Section A of the reply.

Myth #2: We have a competitive broadband market.

Reality: Providers cling to their widely discredited and misleading talking points on competition. They claim that the market is competitive enough to lower prices and spread broadband due to “third pipe” competitors on platforms like mobile broadband (not phone or cable competitors, however). However, the reality is that mobile broadband – the most viable alternative – is slow, expensive and dominated by the telecom incumbents. For more, see Section B of the reply.

Myth #3: Net Neutrality will doom the Internet.

Reality: AT&T, Verizon and Comcast want to become the Internet’s gatekeepers and crush Net Neutrality. Without Net Neutrality, online content can be sped up, slowed down or made unloadable depending on which companies or sites can pay to play, and results in massive telecom profits.

Contrary to the claims of the telecoms, preserving the open Internet will not result in its complete collapse. Internet traffic is not spiraling out of control; prices for the equipment to expand networks continue to fall, and the evidence shows that an open Internet and reasonable network management can coexist.

The value of openness in promoting online investment and growth was recently acknowledged by the National Telecommunications and Information Administration – the agency in charge of over half the $7.2 billion for broadband – which attached strong openness rules as a condition of receiving any of the funds. For more, see Section C of the reply.

So why are the telecom giants recycling tired, old calls for less oversight and making dishonest claims of increased investment and meaningful competition? Profit, pure and simple. But to spread open and affordable Internet to all Americans, we must recognize their misinformation, and encourage the FCC to act in the public’s interest and alongside the thousands of you who wrote to the agency in support of Net Neutrality.

Russ Caditz-Peck is an intern at Free Press in Washington, D.C., and a senior Politics major at Whitman College.