The U.S. broadband oligopoly comprises Comcast, Verizon and AT&T. While these firms compete to a limited extent they present a common front on key issues such as Net Neutrality and the alleged benefits of their own expansion. If their various initiatives (such as mergers and resistance to and litigation against any effective regulation of their operations) continue to be approved a very imbalanced and harmful (to our society and economy) situation will become entrenched. In this environment a handful of executives at these companies, subject to powerful financial incentives linked to their companies’ share prices will be able to determine unilaterally the directions of a vital part of the infrastructure of a 21st century economy. They defend this outcome by arguing that the “invisible hand” of market forces will ensure that they do not and are not free to act against the interests of customers and to stifle innovation and competitors that may challenge their existing sources of revenues. This thesis is invalid because they are not operating in a genuinely competitive market. Many customers in many locations in the U.S. only have one or two broadband providers offering broadband access services with the performance they need.
The “light touch” regulation advocated by the huge and powerful broadband oligopoly reflects a utopian view of humans and human organizations. It assumes that these organizations will naturally be cooperative and caring and dedicated to supporting the interests of their customers and third parties and the goals of public policy, including respect for the rights of small competitors who depend necessarily and asymmetrically on access to their facilities. They ask us to believe that they will behave unselfishly even when doing so requires them to ignore (results in fewer rewards) the strong financial incentives they experience as individuals and to neglect their fiduciary responsibilities to their shareholders. The solution according to the broadband oligopoly lies in eliminating the burdens and harm generated by the allegedly inevitable evils of effective rules and regulations that require them to take account of the priorities of third parties in the operation of the franchises they have been awarded to deploy network services that make extensive use of public resources. If this solution is desirable then the era before government regulation must have been a paradise of economic and social justice and development, in which all Americans lived and worked in harmony with universal access to opportunities. Was the era before the Communications Act of 1934 (or the 19th century) any of these things? The justification for effective regulation is that it is needed to ensure that a handful of individuals cannot exert the enormous power at their disposal to act in ways that are harmful to many other legitimate interests for the sake of their own rewards. The aim is not to deny these individuals and the companies they control the ability to earn reasonable or even attractive rewards for their efforts. It is to enable many others to earn rewards and fulfill their aspirations on the basis of their efforts for the benefit of the entire society and economy without being stifled by powerful forces they cannot resist or reasonably negotiate with on their own through no fault of their own. The motivation behind and the purpose and tradition of regulation are integral to American values. as was recognized by the Founding Fathers. They established the Separation of Powers to ensure that overweening power would not be concentrated in a few individuals or in one type of institution, so that one set of interests could not unilaterally override all others.