Instead of just relying on job-killing interest rate hikes, policymakers should directly address the problem of price gouging.
The Oligopoly That Controls Our Digital Infrastructure Has Deepened Economic and Racial Divides
As we rebuild, let's remove control of wireless spectrum, cloud infrastructure, and broadband internet from corporate hands and put it under public, democratic control.
Research & Commentary
June 01, 2020
In a brutal and devastating way, the Covid-19 pandemic is revealing the many stark and deep inequalities at the heart of our corporate capitalist political economic system. In the United States, for instance, every passing day brings new evidence of how structural and institutional racism has left people of color disproportionately vulnerable both to the disease itself and the economic effects of the efforts to contain it.
The crisis has also demonstrated how critically important digital infrastructure is to the functioning of our modern society, and how inequitable access to this infrastructure deepens and exacerbates geographic, economic, and racial inequality and inequity. With workplaces and schools shut down, hundreds of millions of people around the globe have become reliant on digital infrastructure — especially broadband Internet networks — for their jobs, education, healthcare visits, and social interactions.
However, in both the United States and the United Kingdom deployment of this critical infrastructure (and access to it) is controlled by a small (and shrinking) oligopoly of large for-profit telecommunications corporations. This has led to inadequate service and severe inequality. For instance, tens of millions of Americans, many in rural areas, do not have access to a broadband connection with bare minimum speeds, and Internet access in the country is far slower and more expensive than most other advanced countries.
And even when broadband is available, high costs often make it unaffordable for many families. For instance, in some urban areas up to 30 percent of households do not have an internet connection. In the current crisis, this has put those communities at a tremendous disadvantage when compared to wealthier (and often whiter) communities, especially in terms of education.
In Philadelphia, for instance, around 20,000 students have not been able to attend online classes due to a lack of Internet access. However, when the school superintendent, Dr. William Hite, asked the giant telecoms corporation Comcast — which is headquartered in the city and has been the recipient of billions of dollars in public subsidies and tax breaks — to open their residential Wi-Fi networks to these students, they refused. As a result, thousands of students have been forced to do their schoolwork in parking lots while, as education activist Zachary Wright points out “the children of Comcast executives do their schoolwork from their homes using their own home Wi-Fi.”
In a new report released by The Democracy Collaborative (US) and Common Wealth (UK), we contend that now is the time to start thinking about and treating digital infrastructure — including the wireless spectrum, cloud infrastructure, and fiber-based broadband internet networks — as essential public infrastructure. And as with other critical public infrastructure, like roads, water systems, railroads, and electricity networks, this means taking it out of the hands of extractive, for-profit corporations and putting it under democratic and public control.
While ultimately we believe that the Internet should be organized as a Universal Basic Service (UBS) and access guaranteed as a human right (as the UN has begun to suggest), in each of these areas of digital infrastructure there are intermediary steps and policies that should be enacted now to advance us towards that goal.
For instance, in the United States we should empower communities that are looking to start or expand their own public or cooperatively owned broadband networks. On the one hand, this means federal level legislation overturning state-level “pre-emption” laws (which put restrictions on local community networks). Overturning these pre-emption laws was supported by President Obama when he was in office and has been part of platforms of numerous presidential candidates, including Senators Elizabeth Warren and Bernie Sanders.
On the other hand, it means actively supporting the development of these public and cooperative networks by providing funding and technical assistance at various levels of government, rather than funneling public broadband development subsidies into the coffers of extremely large and rich corporations (as is now often the case).
We should also think creatively about one of our most valuable renewable resources, the public airwaves (also known as the wireless spectrum). Instead of simply auctioning off the spectrum to private corporations and depositing the revenue in the U.S. Treasury, the federal government could, for instance, assign some of the spectrum to a new, publicly owned telecommunications company that would provide much needed competition in the increasingly consolidated wireless sector (including the rollout of 5G networks). Alternatively, the government could use the proceeds from spectrum auctions to capitalize democratically governed public trust funds that would make investments in digital infrastructure, such as community broadband, as well as local journalism and media.
And, finally, these strategies should be paired with democratizing cloud computing services, the bulk of which, globally, are controlled by just three companies — Amazon, Microsoft, and Google. Many experts, and policymakers (such as Senator Warren), have suggested that these “Big Tech” companies should be broken up, and if they are, then cloud computing services are among the most logical services to be spun off. However, it makes little sense to simply create new, for-profit corporations that will replicate the same abusive business practices and be susceptible to the same consolidating pressures. Rather, cloud computing services should, and could, be converted into democratically accountable public utilities.
The effects of the Covid-19 pandemic on our society, economy, and politics are likely to be profound and long-lasting. Rebuilding from the crisis could either supercharge inequality and reinforce an economy that works to extract wealth on behalf of those at the top or it could be the catalyst for the transition to a far more democratic and equitable economy. We must ensure that it is the latter, and one place to start is with the critical digital infrastructure that will become increasingly central and important as the 21st century progresses.