During the period after the Internet first emerged as a mass-market phenomenon, it was almost always discussed in laudatory terms. The shift in focus from manufacturing to technology-oriented industries was creating a “new economy” characterized by higher growth rates than previously thought possible. The Internet provided additional opportunities to create value by enabling companies to reach consumers whose numbers were previously thought to be too small to be served. At the same time, many praised the Internet for providing better access to information and empowering individuals. The Supreme Court joined the chorus in Reno v. ACLU, lauding the Internet as “a unique and wholly new medium of worldwide human communication” that took “content . . . as diverse as human thought” and made it “available to anyone, anywhere in the world.” Adopting a mode of reasoning appropriately called technological determinism, many early commentators argued that technology is a force of nature that can be neither stopped nor controlled.
More recent commentary has continued to exhibit technological determinism, albeit with a more pessimistic attitude. These critics can be organized into two camps. One warns that technology possesses a potential dark side, agonizing over the danger that the Internet may be shortening our attention span, crowding out cultural masterworks, weakening democracy, and undermining our humanity. Another group retains the belief that technology can improve the human condition, while worrying that corporate interests may prevent the Internet from realizing its potential unless the government intervenes.
Professor Susan Crawford’s book, Captive Audience, adopts the second approach, viewed through the lens of the recent merger between Comcast and NBC Universal. As an initial matter, Crawford is sharply critical of U.S. broadband Internet access, which she considers too expensive and unavailable in many parts of the country (pp. 3, 185—86). In addition, Crawford worries that the market for broadband access is becoming increasingly monopolistic, because cable-modem service is in the best position to provide the 100 megabytes per second (Mbps) or 1 gigabyte per second (Gbps) service needed for high-definition video (pp. 2, 64, 113, 172, 263—64). Although cable-modem service once faced competition from telephone companies offering digital subscriber line (DSL) service (p. 53), she argues that DSL has become obsolete (pp. 64, 161, 225, 251, 259). Fiber-to-the-home (FTTH) services such as Verizon FiOS can compete effectively with cable, but the two companies that could have an effect in this field, AT&T and Verizon, have not made this competition a reality: AT&T never pursued FTTH, and Verizon has stopped expanding its FiOS network (pp. 3, 8, 78, 80, 113, 236). Instead, AT&T and Verizon have focused on wireless broadband (pp. 10, 161, 237), which lacks the bandwidth to compete effectively with cable (pp. 9, 64, 79, 121, 160—61, 234—35, 251). Wireless service is thus more properly regarded as a complement rather than a competitor to cable service (pp. 9, 53, 64, 117, 156—157, 160, 251). Crawford concedes that these problems predated the merger and would exist regardless of whether the merger was blocked or permitted to proceed (p. 230).
A concern more closely rooted to the merger is that placing Comcast’s network services and NBC Universal’s cable networks under the same corporate umbrella will allow the combined entity to stifle emerging online video distributors (OVDs), such as Netflix. The combination of Comcast’s supposed monopoly over high-speed Internet (p. 2) with key programming properties controlled by NBC Universal (pp. 132—33) will purportedly allow the merged company to restrict OVDs’ access both to last-mile connectivity (pp. 121, 175—85) and to must-have content (pp. 114—20, 174). To Crawford, this outcome seems inevitable. Crawford devotes a chapter to the proposed AT&T and T-Mobile merger, complaining that even though the government blocked the merger, Verizon and AT&T would remain an effective duopoly and would be unlikely to lower prices or improve services any time soon (pp. 235, 251—52). She concludes that the best way to promote faster, cheaper, symmetrical, reliable Internet access would be for the government to subsidize municipal FTTH and turn the Internet into a public utility by bringing back common carriage (pp. 254—58, 264—66).
A brief look at the history of this sector underscores that any such technologically deterministic predictions should be approached with extreme caution. There is good reason to question whether DSL and wireless broadband can no longer compete with cable-modem service. Moreover, previous firms that have attempted to restrict access to applications and content have met with dismal results. Early dial-up access providers, such as CompuServe and Prodigy, pursued this strategy, only to see it fail. Complaints similar to those raised by Crawford were lodged against [email protected], a cable company—owned Internet service provider (ISP) that spectacularly fell into bankruptcy in 2001. Commentators also objected to the integration of video programming and distribution when News Corp. acquired DirecTV in 2003, only to see News Corp. reverse the transaction five short years later. More recently, Time Warner abandoned precisely the strategy that Comcast—NBC Universal is supposedly pursuing when it separated its programming properties from its cable network by spinning off Time Warner Cable. And perhaps most notoriously, commentators protested the combination of content and conduit during America Online’s 2001 acquisition of Time Warner, only to see the combination dissolve in 2009 at a loss of approximately $200 billion.
Past failed attempts to combine content and conduit serve as a cautionary note regarding anyone’s ability to forecast which business strategies will prove successful and instead counsel in favor of hesitating before basing prescriptive regulatory policies on any such predictions. As the long litany of failed Internet businesses demonstrates, ownership of value-creating technologies is not sufficient to guarantee commercial success, putting the lie to the oft-quoted mantra, “If you build it, they will come.” Timing matters, as does the development of complementary technologies and the manner in which technologies are implemented. Instead, history counsels in favor of remaining open-minded about new practices and preserving innovators’ ability to experiment with alternative ways of doing business. Moreover, policymakers must keep in mind that the law of unintended consequences means that regulatory interventions can often be counterproductive in surprising ways. The fact that such change is disruptive and inevitably creates winners and losers, however, should not deter policymakers from rejecting technological determinism and keeping a watchful eye as events unfold.
Part I of this Book Review examines Crawford’s claim that cable-modem service will soon emerge as the dominant platform for broadband Internet access. Part II critiques her arguments that vertical integration of Comcast’s distribution infrastructure with NBC Universal’s programming properties will harm consumers. Part III explores the potential unintended consequences of regulatory intervention. Part IV assesses Crawford’s recommendations in favor of municipal fiber and common carriage.