July 13, 2018 at 5:00 am ET
The telecom industry has certainly been in the spotlight as of late. Between the demise of net neutrality followed by the AT&T-Time Warner merger, and most recently, the revelation that the nation’s largest cell carriers have been selling customers’ real-time location data to third-party companies, much is at stake for not only the future of this industry, but for consumers as well.
However, the most detrimental effort to date is something that’s received little (if any) attention at all.
Last month, the USTelecom Association, which represents AT&T, Verizon, CenturyLink and Frontier, filed a petition with the Federal Communications which would eliminate incumbent carriers’ (i.e. AT&T, Verizon, CenturyLink and Frontier’s) obligation to share their copper network infrastructure with independent internet providers. If granted, this would not only eliminate competition among internet service providers, it would dramatically raise prices on consumers, hinder access to high-speed internet, and worst of all, give way to an industry run by only a few big conglomerates (some of which are among the most hated companies in America).
Here’s what big telecom doesn’t want consumers to know and what’s at stake for the future of internet access across America:
What is this petition?
Before we talk about what’s happening now, we need to look at what happened in the past. In 1996, Congress passed the Telecommunications Act, which obligated incumbent providers to share their copper line infrastructure at regulated rates with other carriers to lower the barrier of entry into the telecom market. The goal of this provision was to spur marketplace competition, which it did. Following the passage of the law, the internet marketplace saw the birth of hundreds of new, independent carriers.
While a number of these carriers were put out of business due to fluctuating financial markets and other market hurdles, the independent carriers that remain today are highly dependent on this specific provision of the Telecommunications Act. Copper wire infrastructure may sound like an outdated piece of infrastructure, but it is still widely used across the country for internet access and is essential for competitive upstarts to enter the telecom market. These copper wires are one of the only ways a new market entrant can build a customer base to then leverage and finance fiber optic deployment. Without this regulation in place, the barriers to enter the telecom market would be too high for new entrants.
A nationwide impact
If the petition were to be accepted by the FCC, the reverberations would be felt nationwide.
Thriving, independent ISPs across the country from Mammoth Networks in Wyoming to Socket in Missouri to Gorge.net in Oregon to my own company, Sonic, in California (just to name a few) would be forced to either drastically raise prices, or to end their residential and small business services for good. Without access to current infrastructure, companies like mine will lose our bridge to customers and be cheated of the customer base we need to build a fiber network.
What’s worse is the impact this will have on consumers. In today’s day and age, internet is more than just a “nice to have,” it’s an essential utility, much like water and electricity. Consumers need high speed, quality internet in order to participate in the economy. Yet, America’s big telecom giants have zero interest in what consumers need; their primary interest lies in turning a profit. Without competitive alternatives in place, incumbent providers will not have any incentive to improve their service offering, allowing these companies to raise prices as they see fit, while letting their customer service practices deteriorate even more. For consumers, what this all boils down is even less market choice when selecting an ISP and much higher prices.
What the future of America’s internet holds
America’s internet problems could be easily solved, but thanks to big telecom, the market is very much skewed in favor of a few large corporations over consumer interests. This latest effort would only make matters worse, diminishing Americans’ access to this critical utility.
We must do everything we can to protect consumers’ access to the internet and put a stop to this petition. But if AT&T, Verizon and the like get their wish, we’re looking at an even more grim outlook for America’s telecom future.
Dane Jasper is the CEO and cofounder of Sonic, the largest independent ISP in California.
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