'Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age

2013-03-10T00:00:00Z 'Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded AgeJane Ammeson Times Correspondent nwitimes.com
March 10, 2013 12:00 am  • 

Suffered heart palpitations last time you clicked open your cell phone bill? Wondered why your unlimited data package morphed into a monthly limit that seemingly reaches the top just a week or so into your billing cycle? And why can your son’s college roommate get good reception on home visits to Kenya while there are parts of Interstate 94 where your service drops?

Susan Crawford posits an answer in her book “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age” (Yale University Press 2013; $30). Crawford, a law professor at the Benjamin N. Cardozo School of Law and who served as special assistant to President Obama for science, technology and innovation policy, believes mergers in the American broadband and wireless industries killed competition leaving us with a duopoly; two big gorilla companies — Verizon with 32% of the market and AT&T with 31% — and way down the food chain and barely in the game Sprint (17%) and T-Mobile 11% trying to hold on but denied easy access to the necessities of growth such as spectrum holdings.

It wasn’t like this a decade ago when the U.S. was in the vanguard of Internet revolution offering some of the fastest speeds and lowest prices. Not so today. Dozens of countries including Japan and South Korea now surpass us in speed and price of broadband. This doesn’t just hurt consumers financially while adding to our frustrations of dropped calls and sticker shock; it also, says Crawford, undermines our country’s economic future.

While we were told that a looming spectrum crisis was one reason for monthly limits on data usage (oh sure we can get more but it might mean robbing a bank to pay for it), Crawford disagrees, comparing the gorilla sized companies to the robber barons of old and calling it the biggest monopoly since the breakup of Standard Oil 100 years ago.

“In my view, the duopoly players, Verizon Wireless and AT&T, have plenty of spectrum,” says Robinson who was named one of Fast Company’s Most Influential Women in Technology. “If they wanted to increase data capacity, they’d build more towers and feed them with fiber. But that would be expensive, and it’s in their interest to keep expectations low and scarcity in place. I’d like to see real nationwide competition. To get there, T-Mobile would need to have access to low-band spectrum. Wireless is just the last 50 feet of a wire, and what we really need is wholesale, reasonably priced fiber running deep into neighborhoods and business districts around the country. If that facility is in place, you’ll see lots of wireless competition.”

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