Transcript of Susan Crawford, interviewed by Bill Moyers

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BILL MOYERS: Welcome. You’ve heard me before quote one
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of my mentors who told his students that “news is what people want to keep hidden; everything
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else is publicity.” That’s why two books are rattling the cages of powerful people
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who would rather you not read them. Here’s the first one. “Captive Audience: The Telecom
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Industry and Monopoly Power in the New Gilded Age,” by Susan Crawford. Read it and you’ll
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understand why we Americans are paying much more for internet access than people in many
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other countries and getting much less in return. That, despite the fact that our very own academics
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and engineers, working with our very own Defense Department, invented the internet in the first
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place.
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Back then, the U.S. was in the catbird seat – poised to lead the world down this astonishing
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new superhighway of information and innovation. Now many other countries offer their citizens
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faster and cheaper access than we do. The faster high-speed access comes through fiber
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optic lines that transmit data in bursts of laser light, but many of us are still hooked
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up to broadband connections that squeeze digital information through copper wire. We’re stuck
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with this old-fashioned technology because, as Susan Crawford explains, our government
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has allowed a few giant conglomerates to rig the rules, raise prices, and stifle competition.
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Just like standard oil in the first Gilded Age a century ago.
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In those days, it was muckrakers like Ida Tarbell and Lincoln Steffens rattling the
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cages and calling for fair play. Today it’s independent thinkers like Susan Crawford.
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The big telecom industry wishes she would go away, but she’s got a lot of people on
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her side. In fact, if you go to the White House citizen’s petition site, you’ll
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see how fans of “Captive Audience” are calling on the President to name Susan Crawford as
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the next chair of the Federal Communications Commission. “Prospect” magazine named
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her one of the “top ten brains of the digital future,” and Susan Crawford served for a
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time as a special assistant to President Obama for science, technology and innovation. Right
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now she teaches communications law at the Benjamin Cardozo School of Law here in New
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York City and is a fellow at the Roosevelt Institute. Susan Crawford, welcome.
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SUSAN CRAWFORD:Thank you so much.
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BILL MOYERS:“Captive Audience?” Who’s the captive?
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SUSAN CRAWFORD:Us, all of us. What’s happened is that these enormous telecommunications
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companies, Comcast and Time Warner on the wired side, Verizon and AT&T on the wireless
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side, have divided up markets, put themselves in the position where they’re subject to no
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competition and no oversight from any regulatory authority. And they’re charging us a lot for
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internet access and giving us second class access. This is a lot like the electrification
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story from the beginning of the 20th century. Initially electricity was viewed as a luxury.
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So when F.D.R. came in, 90 percent of farms didn’t have electricity in America at the
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same time that kids in New York City were playing with electric toys. And F.D.R. understood
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how important it was for people all over America to have the dignity and self-respect and sort
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of cultural and social and economic connection of an electrical outlet in their home. So
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he made sure to take on the special interests that were controlling electricity then who
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had divided up markets and consolidated just the way internet guys have today, he made
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sure that we made this something that every American had.
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BILL MOYERS:But we are a long way from F.D.R., the New Deal and those early attitudes
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toward industry. What makes you think that’s relevant now when you come to the internet?
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SUSAN CRAWFORD:You know, this is an issue about which people have a lot of passion because
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it touches them in their daily lives. “The Wall Street Journal” on the front page had
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an article about kids needing to go to McDonald’s to do their homework because they don’t have
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an internet connection at home. Parents around the country know that their kids can’t get
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an adequate education without internet access. You can’t apply for a job these days without
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going online. You can’t get access to government benefits adequately, you can’t start a business.
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This feels to 300 million Americans like a utility, like something that’s just essential
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for life. And the issue of how it’s controlled and how expensive it is and how few Americans
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actually sign up for it is not really on the radar screen.
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BILL MOYERS:You describe this frankly as a crisis in communication with similarity,
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you say, to the banking crisis and global warming. What makes it a crisis?
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SUSAN CRAWFORD:It’s a crisis for us because we’re not quite aware of the rest of the world.
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Americans tend to think of themselves as just exceptional. And we’re—
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BILL MOYERS:Well, we did invent the internet, didn’t we?
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SUSAN CRAWFORD:We did, but that was generation one. Generation two, we’re being left far
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behind. And so all the new things that are going on in the world, America won’t be part
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of that unless we are able to communicate. So there’s a darkness descending because of
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this expensive and relatively slow internet access in America. We’re also leaving behind
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a third of Americans. A third of us.
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BILL MOYERS:In here you call it the digital divide. Describe that to me.
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SUSAN CRAWFORD:Well, here’s the problem. For 19 million Americans, many in rural areas,
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you can’t get access to a high speed connection at any price, it’s just not there. For a third
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of Americans, they don’t subscribe often because it’s too expensive. So the rich are getting
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gouged, the poor are very often left out. And this means that we’re creating yet again
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two Americas and deepening inequality through this communications inequality.
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BILL MOYERS:So is this why, according to numbers released by the Department of Commerce,
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only four out of ten households with annual household incomes below $25,000 reported having
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wired internet access at home compared with 93 percent of households with incomes exceeding
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$100,000? These companies are not providing cheap enough access to the poor folks in this
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country?
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SUSAN CRAWFORD:These are good American companies. Their profit motives though don’t
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line up with our social needs to make sure that everybody gets access. They’re not in
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the business of making sure that everybody has reasonably priced internet access. That’s
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how a utility functions. That’s the way we need to treat this commodity. They’re in the
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business right now of finding rich neighborhoods and harvesting, just making more and more
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money from the same number of people. They’re doing really well at that. Comcast is now
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a $100 billion company. They’re bigger than McDonald’s, they’re bigger than Home Depot.
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But they’re not providing this deep social need of connection that every other country
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is taking seriously.
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BILL MOYERS:And you make the point that the United States itself is beginning to experience
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this digital divide in the world.
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SUSAN CRAWFORD:It’s fair to say that the U.S. at the best is in the middle of the pack
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when it comes to both the speed and cost of high speed internet access connections. So
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in Hong Kong right now you can get a 500 megabit symmetric connection that’s unimaginably fast
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from our standpoint for about 25 bucks a month. In Seoul, for $30 you get three choices of
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different providers of fiber in your apartment. And they come in and install in a day because
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competition’s so fierce. In New York City there’s only one choice, and it’s 200 bucks
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a month for a similar service. And you can’t get that kind of fiber connection outside
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of New York City in many parts of the country. Verizon’s only serving about 10 percent of
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Americans. So let’s talk about the wireless side for a moment, you know, the separate
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marketplace that people use for mobility. In Europe you can get unlimited texting and
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voice calls and data for about $30 a month, similar service from Verizon costs $90 a month.
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That’s a huge difference.
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BILL MOYERS:Why is there such a disparity there?
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SUSAN CRAWFORD:The difference in all of these areas is competition and government
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policy. It’s not magical. Without the intervention of the government there’s no reason for these
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guys to charge us anything reasonable or to make sure that everybody has services.
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BILL MOYERS:How do you explain that in the course of one generation, from the invention
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of the internet in this country to falling way behind as you say the rest of the world
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in our access to internet? How did that happen?
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SUSAN CRAWFORD:Beginning in the early 2000’s we believed that the magic of the market would
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provide internet access to all Americans. That the cable guys would compete with the
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phone guys who would compete with wireless and that somehow all of this ferment would
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make sure that we kept up with the rest of the world. Those assumptions turned out not
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to be true. It’s much cheaper to upgrade a cable connection than it is to dig up a copper
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phone line and replace it with fiber. So the cable guys who had these franchises in many,
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most American cities, they are in place with a status quo network that 94 percent of new
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subscriptions are going to. Everybody’s signing up with their local cable incumbent. There
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is not competition for 80 percent of Americans. They don’t have a choice for a truly high
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speed connection. It’s just the local cable guy. Competition has just vanished.
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BILL MOYERS:Well, the 1996 Telecommunications Act was supposed to promote competition and
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therefore protect the consumer by bringing prices down. That didn’t happen?
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SUSAN CRAWFORD:That didn’t happen because it’s so much cheaper to upgrade the cable
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line than it is to dig up the copper and replace it with fiber. The competition evaporated
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because Wall Street said to the phone companies, “Don’t do this, don’t be in this business.”
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So you may think of Verizon and AT&T as wired phone companies, they’re not. They’ve gone
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into an entirely separate market which is wireless.
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They’re the monsters on the wireless side that control two thirds of that market. So
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there’s been a division. Cable takes wired, Verizon/AT&T take wireless. They’re actually
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cooperating. There’s a federally blessed non-compete in the form of a joint marketing agreement
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between Comcast and Verizon. And so the world is perfect for them, not so great for consumers
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who are paying more than other people in the rest of the world for slower service.
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BILL MOYERS:Since the 1996 Telecommunications Act which I thought was going to lower the
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price of our monthly cable bill, it’s almost doubled.
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SUSAN CRAWFORD:Well, that’s because Time Warner controls Manhattan. There’s no competition.
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The cable guys, long ago, something they call “the summer of love,” divided up—
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BILL MOYERS:“The summer of love?”
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SUSAN CRAWFORD:Yeah. They clustered their operations. It makes sense from their standpoint.
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“You take San Francisco, I’ll take Sacramento. You take Chicago, I’ll take Boston.” And
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so Comcast and Time Warner are these giants that never enter each other’s territories.
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BILL MOYERS:You talk to certain people and they say, “Look, I don’t know what this
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is about. I have all the gizmos I want. I have a smart phone, I have a tablet,” And
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they say, “What’s the crisis? Because I have more access than I can use.”
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SUSAN CRAWFORD:There are a lot of bright shiny objects that are confusing people about
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the underlying market dynamics here. What people don’t realize is that for this wireless
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access you’re paying too much and the coverage is too spotty. On the wired side, that’s where
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we’re really being left behind. And here’s the important tie to understand. A wireless
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connection is just the last 50 feet of a wire. So fiber policy is really wireless policy.
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These two things fit together. And if the whole country did an upgrade to cheap fiber
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everywhere we’d get better connection for everybody. Right now though if a mayor wants
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to do this for himself he’ll be pummeled by the incumbents. In almost 20 states in America
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it’s either illegal or very difficult for municipalities to make this decision for themselves.
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BILL MOYERS:In North Carolina a couple of years ago lobbyists for Time Warner persuaded
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the state legislature to make it almost impossible, virtually impossible for municipalities to
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get their own utility, right?
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SUSAN CRAWFORD:That’s exactly right. And so now North Carolina, after being beaten
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up by the incumbents is at the near the bottom of broadband rankings for the United States.
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BILL MOYERS:And what’s the practical consequence of that?
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SUSAN CRAWFORD:All those students in North Carolina, all those businesses that otherwise
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would be forming, they don’t have adequate connections in their towns to allow this to
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happen. They’ve got– they’re subject to higher and higher pricing. They’re being gouged.
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BILL MOYERS:Your book did underscore for me why this is so important to democracy,
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to the functioning of our political system, to our role as a self-governing free people.
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Talk about that a moment. Why do you see this so urgently in terms of our practically dysfunctional
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democracy today?
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SUSAN CRAWFORD:We need to be able to speak to each other effectively and effectively
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to government. We need to empower our citizens to feel dignified and ready to cope in the
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21st century. Having a communications system that knits the country together is not just
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about economic growth. It’s about the social fabric of the country. And a country that
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feels as if it can move together and trust each other is one that is more democratic.
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As a matter of national policy we have forced other countries to talk about the importance
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of internet access, foreign policy we’re great at saying, “Make sure internet is everywhere.”
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Domestically, for some reason, we haven’t done so well. So I see internet access as
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the heart of a democratic society.
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BILL MOYERS:You use that merger of Comcast and NBCUniversal as the window in your book
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into what this power can do to the aspirations of a democratic internet.
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BRIAN WILLIAMS on NBCNightlyNews:Federal regulators today approved the purchase by
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Comcast of a majority stake in NBCUniversal from General Electric […] This merger will
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create a $30 billion media company with cable, broadcast, internet, motion picture and theme
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park components. The deal is expected to close by the end of the month.
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BILL MOYERS:You say that the merger between Comcast and NBCUniversal represented a new
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frightening moment in U.S. regulatory history. How so?
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SUSAN CRAWFORD:Comcast is not only the nation’s largest broadband distributor with
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tens of millions of customers, it also now owns and controls one of the four media conglomerates
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in America, NBCUniversal. That means that it has a built-in interest in making sure
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that it shapes discourse, controls programming all in the service of its own profit-making
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machine. As both the distributor and a content provider, it’s in its interest to make sure
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that it can always charge more for discourse we would think isn’t controlled by anybody.
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So it’s a tremendous risk to the country that we have this one actor who has no interest
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in the free flow of information controlling so much of high speed internet access.
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BILL MOYERS:You say the merger created the largest vertically integrated distributor
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of information in the country. So what’s the practical consequence of Comcast having this
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control over its content?
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SUSAN CRAWFORD:Here’s the consequence. Comcast with the control over its programming,
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and also because it works to closely with the very concentrated programming industry,
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can raise the costs of any rival coming in to provide let’s say competitive fiber access.
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So Google in Kansas City is having real trouble getting access to sports content because Time
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Warner Cable, the local monopoly player there, controls that sports content. So Google or
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any other competitive fiber provider has to enter two markets at once. One market to provide
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the transport, the fiber, and then also the programming market. And making programming
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more expensive is yet another barrier to entry. And Comcast can carry that out now.
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BILL MOYERS:So what should the F.C.C. do about that?
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SUSAN CRAWFORD:This is a moment when we have to separate out content from conduit.
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It should not be possible for a local cable actor or any distributor to withhold programming
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based on volume. That’s what’s going on. The programmers say, “We’ll sell to Comcast cheaply
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’cause they’re big. But if you’re an upstart we’re going to charge you three to four times
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what Comcast is paying for the same programming.” That should not be legal. Everybody should
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get access to the same stuff at the same price and they should be announced prices.
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BILL MOYERS:What about the argument that in this modern world there are certain industries,
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certain markets, that require an economy of scale. Critics have said that you’re ignoring
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the sophisticated economics that govern these industries.
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SUSAN CRAWFORD:The economics of these networks did not change when we added a little bit
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of digital pixie dust to them. It’s still very expensive to build these networks. Private
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actors still don’t have an interest in covering everybody because that’s too much of an economic
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risk for them. The better route is sensible oversight. We can learn from our mistakes
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in the past when it came to regulatory regimes that didn’t work. But a regulatory regime
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is needed without question to make this work for all Americans.
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BILL MOYERS:I have to say this is pretty strong stuff. Listen to yourself. “Instead
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of ensuring that everyone in America can compete in a global economy, instead of narrowing
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the divide between rich and poor, instead of supporting competitive free markets for
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American inventions that use information, instead that is of ensuring that America will
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lead the world in the U.S. in the information age, U.S. politicians have chosen to keep
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Comcast and its fellow giants happy.”
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SUSAN CRAWFORD:For the last 30 years the rhetoric of the market being the thing we
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all aspire to has in a sense become the collective vision in America. Our politicians aren’t
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separate from that kind of understanding. I think they believe that it’s better to have
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government stay out of industry. In this particular place no government intervention is actually
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disaster for the country because we leave so many people behind, we subject ourselves
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to the informational control of just a few giants. The problem for the politicians is
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that there’s no upside right now to fighting back. If they do they’ll lose their campaign
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contributions. We need to get the public interested in this so that politicians will understand
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that they’re not acting alone.
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BILL MOYERS:In your last chapter you describe what happened in Lafayette, Louisiana when
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the city decided it wanted the very kind of internet access you’re talking about. And
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a few years ago my colleagues and I did a documentary called “Net @ Risk” in which
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we looked at the threat to internet access. And we went to Lafayette and lo and behold
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they’re doing exactly what you’re describing in your book.
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JOEY DUREL in Net @ Risk: We have an out-migration problem with our young people from Louisiana,
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and I felt it was time for politicians to quit talking and do something.
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RICK KARR in Net @ Risk:Something like building every home and business in town its
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own fiber optic connection to the information superhighway.
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DON BERTRAND in Net @ Risk:We see telecommunications in the way of Internet, in the way of fiber
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connectivity as something that should be available to everyone.
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STEPHEN HANDWERK in Net @ Risk:Just like water, sewer, electricity, telephone. I mean
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it all falls into that same lump.
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JOEY DUREL in Net @ Risk:I think this is a tremendous opportunity for small business
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and to attract business here.
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RICK KARR in Net @ Risk:So what the city decided to do was build its own fiber network
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through its municipal power and water company, Lafayette Utility Systems or L.U.S.
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BILL MOYERS:How did they get away with it in Lafayette when as you say they didn’t
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in North Carolina?
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SUSAN CRAWFORD:Persistence of a mayor who very much focused on this and said, “We’re
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going to get this done.” And there wasn’t a statute at that point at the state level
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making it illegal. Municipalities have a lot of assets at their disposal. They control
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the rights of way, the access to their streets and their poles that people need in order
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to build these networks. They can condition access to those rights of way on a particular
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network being built. Stockholm did this. They say, “Look, you can come in and build a fiber
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network as long as it’s a wholesale, nondiscriminatory really fast fiber network connecting our hospitals
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and schools and police departments. And then you have to let anybody else connect to it.”
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Not that hard, you just draft an R.F.P., request for proposals, and the city can do that using
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its control over its rights of way.
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Cities often also have access to this long term low rate financing. They can put their
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good name behind a bond issue and make sure that it gets paid back by the subscriptions
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to the network over time. It’s a great investment for the city, and that’s what Lafayette found
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out.
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BILL MOYERS:So how is the consumer in Lafayette situated differently from me here in Manhattan
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with one cable service?
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SUSAN CRAWFORD:In comparison to where you are in Manhattan where there’s no government
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intervention at all, in Lafayette the municipality is acting as a steward, standing up for you.
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It is in fact government’s role to stand up against the ethic that might makes right.
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In most of America there is no government factor keeping these bullies from charging
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us whatever they want.
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BILL MOYERS:You describe something in your book that we’ve talked about often at this
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table. Quote, “The constant easy, friendly flow between government and industry in the
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communications world centered around Washington D.C.” Describe that world.
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SUSAN CRAWFORD:It’s a warm pond of familiarity. Everybody knows everybody else. They’re all
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very nice people, you’d like to have a drink with them. They go from a job inside the regulator
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to a job in industry to a job on the hill, one easy flow, nice people. Outsiders have
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no impact on this particular world.
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And it would be– I talked to a cable representative not long ago about the need to change this
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regulatory state of affairs. And she looked at me and said, “But that would be so disruptive.”
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And she’s right, it would be disruptive.
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BILL MOYERS:Well, you know, the F.C.C. was supposed to be the cop on the beat of
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the communications world. But for example Michael Powell, who served as F.C.C. chairman
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for four years in the mid-2000s, is now the cable and telecom industry’s top D.C. lobbyist.
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Meredith Attwell Baker who was one of the F.C.C. commissioners who approved Comcast’s
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merger with NBCUniversal, left the agency four months later to join Comcast as a highly
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paid lobbyist. That move infuriated media groups.
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SUSAN CRAWFORD:But that warm pond of familiarity in Washington sees this as absolutely normal
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behavior. Just yesterday the former chief of staff of the F.C.C. left to be the general
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counsel of a regulated company. It happens all the time. And so in order to change this
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you’d have to make regulation of this area not be carried out by such a focused agency.
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Right now, the F.C.C.’s asymmetry of information is striking. They only talk to the industry.
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The community is all so close. In order to break that up you’d have to make sure you
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had a broad based agency seeing lots of different industries.
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BILL MOYERS:About the time I was reading your book I also read a speech by the present
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chair of the F.C.C., Julius Genachowski. He said, “The United States is in a global bandwidth
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race. A nation’s future economic security is tied to frictionless and speedy access
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to information.” If you were chair of the F.C.C. what would you do to move us forward?
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SUSAN CRAWFORD:I know that it’s important to let these municipalities make decisions
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for themselves. That’s going to take a bill in Congress preempting the terrible state
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laws like the one that happened in North Carolina. We need to make self-determination possible
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for cities. And the second one is making sure that there’s low cost, low rate financing
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available to build these networks.
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That’s the stumbling block, making sure that you can actually build without needing to
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put up all the money yourself. Because it pays out over time, it pays out as a social
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investment for the country. And then finally, changing all those rules at the FCC that are
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getting in the way of progress.
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BILL MOYERS:So briefly describe the need.
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SUSAN CRAWFORD:All Americans need a fast, cheap connection to the internet.
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BILL MOYERS:And the problem?
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SUSAN CRAWFORD:A few companies control access in America and it’s not in their interest
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to bring that fast, cheap access to us all.
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BILL MOYERS:And the solution?
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SUSAN CRAWFORD:The solution is for people to care about this issue, ask hard questions
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at every debate, make sure you elect people who will act and give your mayor air cover
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so that he or she can act to make sure that your city has this fast, competitive access.
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BILL MOYERS:The book is “Captive Audience: The Telecom Industry and Monopoly Power in
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the Gilded Age.” Susan Crawford, I’ve enjoyed this conversation. Thank you for being with
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me.
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SUSAN CRAWFORD:Thank you so much.