Susan Crawford (previously) is America's best commentator on network policy and network neutrality. In this interview with Ezra Klein, she makes the case for treating Internet access as a utility -- not necessarily a right, but something that markets do a bad job of supplying on their own. She describes how regulatory failures have made America into a global Internet laggard, with enormous damage to the nation's competitiveness and potential, and provides a compelling argument for locating the market for service in who gets to light up your fiber, not who gets to own it. Drawing on parallels to the national highway system and the electrification project, Crawford describes a way forward for America where the Internet is finally viewed as "an input into absolutely everything we do," and not merely as a glorified video-on-demand service.
Susan: The reason the internet is the most important development in my life is that you don't have to ask anybody for permission to start something new. You can launch something in your garage and it becomes an extraordinary thing like Facebook or Google.
What the FCC did is to try to simultaneously say, "here's some rules for the internet but we're not going to label internet access as a utility," and the DC Circuit just a month ago or so said, "You can't have it both ways. You can't both say the internet access is a luxury and have these rules about keeping this permissionless internet open."
That's why net neutrality — which is the idea that anybody can use the internet for whatever application or service they want to — is under such threat. It's because our regulator has given up its authority to say anything to the providers of high speed internet access and in that vacuum we got tremendous consolidation. Comcast is enormous company. It’s the largest media company by revenue in the world at this point. Comcast is essentially able to force Netflix to pay tribute in order to reach Netflix's subscribers.
That's possible because again our regulator has given up all oversight of these high speed internet access networks.
Ezra: If Comcast was sitting here, they would say, I think, that you began that answer by saying that the beauty of the internet is that any new company can come on to it but that, at the end of the answer, it was about Netflix, a massive incumbent who uses tremendous amounts of bandwidth. They would argue that in a limited bandwidth world, in order to keep space for the new entrants, they need to charge the incumbents taking up tremendous bandwidth. You don't think that is a reasonable response.
Susan: No, not at all actually. Right now they're charging Netflix. But Netflix got a very good price because it's so big — that’s the incumbency you mentioned. What about the next person? The next company that uses a lot of capacity could be a telemedicine service, could be distance education, they're also going to have to pay tribute to Comcast.
Comcast is making north of 95 percent profit on its provision of high-speed internet access services. Its capital expenditures as a percentage of its revenue are down to 14 percent. It's in harvesting mode. It's making tremendous amounts of money. It doesn't need to charge those companies that want to reach their subscribers, it's just can so that's what's going on.