Unpacking the History of Telecommunications Policy with Gene Kimmelman - Episode 626 of the Community Broadband Bits Podcast

Gene Kimmelman (00:07):
At a moment when it's so clear that we need low price broadband as an essential service across our country and frankly the world. We don't have the policy structure, we don't have the policy tools to impose that.

Christopher Mitchell (00:22):
Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell [00:00:30] at the Institute for Local Self-Reliance. I'm in St. Paul, Minnesota, and today I'm excited to be speaking with Gene Kimmelman who has a long history of consumer protection, starting back with Nader, working with the Consumer Federation and ultimately leading it, I believe, working with Consumers Union and leading those efforts, CEO at Public Knowledge, Department of Justice Advisor, and then also in another stint, Chief Counsel of the Antitrust Division at [00:01:00] the Department of Justice now hanging out as a Senior Policy Fellow at the Tobin Center for Economic Policy, as well as a Fellow at the Kennedy School at Harvard. Welcome to the show.

Gene Kimmelman (01:10):
Thanks for having me.

Christopher Mitchell (01:12):
So Gene, I am very excited to talk with you. This comes about as part of my desire to try to both learn history myself of some of the telecommunications issues as well as many of the people who haven't been around for [00:01:30] as long as I have and have a lot of ignorance just like I do about what happened before I came into the game. So I shouldn't say that for people who aren't familiar with you, you are such a big deal that apparently the 1992 Cable Act was referred to as the Kimmelman Act for some period of time, which is pretty great.

Gene Kimmelman (01:54):
I've been at it for a long time, and the Cable Act of 92 [00:02:00] comes after a terrible loss in 1984 where we prematurely deregulated cable and allowed a monopoly to just explode and abuse consumers. So it was a ticking time bomb in essence, that led to that law.

Christopher Mitchell (02:17):
Well, that's a historical problem that we'll never have to deal with again. In terms of unregulated monopoly in the telecommunications space,

Gene Kimmelman (02:24):
This is true. That was a very different, very different era, and it was an era [00:02:30] in which the consumer movement was a key pillar in public interest advocacy of all kinds, ranging from environmental civil rights pre the high tech boom of the nineties. And since the real bread and butter consumer issues were utilities issues, it was electric rates, it was the price of gas and oil, it was your phone. And so there was core set [00:03:00] of issues, and there were a set of groups very much focused on keeping essential services affordable for consumers. That was a fundamental element of our public advocacy, both at the state level and at the federal government level. And the world has changed dramatically since that time.

Christopher Mitchell (03:22):
Yeah, so we want to cover some of that. I also want to make sure that we take a moment to note that there were others [00:03:30] who are deeply involved. Names that have come up have been Andy Schwartzman, Mark Cooper at the Consumer Federation of America, Jeff Chester of the Center for Digital Democracy. Now I've run into Mark's writings. I've never met him, and Andy Schwartzman, I think is still well known by folks as well as his coaching tree, which includes Gigi, so Matt Wood, Harold Ved, many others. I thought it was interesting that of these people I hadn't even run across Jeff Chester, and so there's, [00:04:00] I'm sure there's other people that were involved too. So if names aren't named here, we don't have time to necessarily go into everyone's contribution, but I think one of the things I'm aware of is that these things are not a result of one or two people. It's often a lot of people working with different groups.

Gene Kimmelman (04:15):
All those people were essential to a lot of the work that we did in the eighties and nineties and more recently as well, they provided unique expertise and background for a lot of this work. [00:04:30] So it was a joint effort. I don't think there was very much I ever did without Mark Cooper at my side and doing much of the economic analysis and deep research. There's no way I could have been out there or doing the advocacy I was doing without Mark on a day-to-day basis. Andy was a close collaborator across a lot of the media issues, which are adjacent to telecommunications and cable, and then in the middle of the cable [00:05:00] fight. And Jeff came along really in the cable battles and was very focused on that and then shifted much more to kids protection issues and the Internet. But so everybody came from a little different space, but we all work closely together.

Christopher Mitchell (05:14):
Now, you were mentioning about this came out of a consumer's movement, and if we look back at the arc of history, I am not a historian, but I think it seems to me that there was a period post World War II where the economy really starts humming. [00:05:30] And over the course of the fifties and sixties, we kind of move into what I think of a little bit as the beginning of an abundance society with all kinds of materials and new things, people have more money available to them. We have a thriving middle class with incomes, and in that there's a lot of products and there are product safety issues and there are cost issues. And that seems like it gives rise to people organizing themselves on the basis of buyers of things. And as consumers,

Gene Kimmelman (05:57):
No, the movement goes back into the thirties [00:06:00] and close connections with the labor movement, a lot of work on safety, workplace safety, safety issues in general, then more pocketbook issues, and then the movement takes off more on its own and it, it's partly connected to labor, but partly dissociated from labor because what ends up happening is organized labor does better in some of the utility areas with telephone companies as a perfect example, the old AT&T, and it raises [00:06:30] attention where the consumer interest is lower rates and prices and the labor issues are much more just jobs and higher wages. And it was perceived occasionally as a conflict and certainly when there was the focus on how to try to promote competition coming out of a utility environment, a lot more tension between labor and the consumer groups in an era now where we see broadband as an essential service, [00:07:00] very much like the old telephone service, very much like traditional broadcast television was, and everyone is talking about the need for affordability.

(07:11):
The interesting thing of the consumer movements rise in the utility realm was that we had a culture and a tradition of regulated monopoly that was already in existence. And so you had a structure and a framework. You had state public utility commissions, [00:07:30] you had the Federal Communications Commission, you had a focal point for advocacy around the issue of pricing. And that's something we do not have with broadband. I mean, it's one of the reasons why and the last 10 years I've been, besides doing a lot of antitrust work, I've been talking a lot about the need for a digital regulatory agency because until you have a home, a place with a responsibility to [00:08:00] actually protect the consumer, both on prices and in terms of content, and you're just yelling and screaming at companies and often ones that are enormously powerful. So that was a difference in the pocketbook opportunities in advocacy, in dealing with telecommunications and then ultimately with cable.

Christopher Mitchell (08:22):
One thing that people may not be familiar with is the way cable kind of arose, which started off being [00:08:30] hobbyists like many technology and then began to be deployed on a citywide basis. Cities sometimes issued exclusive franchises, which they were allowed to do. Sometimes they didn't issue exclusive franchises, but they still only had one company building a network. But we run into the eighties, and my understanding is many of the smaller companies are starting to be consolidated into bigger non-local companies doing cable service. And [00:09:00] it seems like the tool of local governments to deal with that is not very strong in terms of the franchise and also perhaps not well situated. The franchise was about rights of way and for communities to be trying to deal with pricing. I wasn't there paying attention at the time, but it seemed like obviously there were challenges that were coming up. So can you help us understand what it was like then and what was happening?

Gene Kimmelman (09:26):
I kind of got dropped into the cable fight after being in [00:09:30] the trenches on the telecommunications fights. So telecom was much more straightforward where you had state public utility commissions, you had the FCC, you had a history of rate regulation. As cable grew as a technology challenging over the air television, this is a prime example from history of where public officials have an opportunity to do something really good and then also an opportunity to mess it up horribly. And I think the city's oversight of cable was a perfect example [00:10:00] of both of those things. In most instances, it was quite clear you could only build one infrastructure whether you had multiple franchises or not, but it was fundamentally a monopoly infrastructure. You're only going to run one cable wire above ground or underground to people's homes. It made no economic sense to do more tremendously disruptive, tremendously costly.

(10:20):
So capital intensive, enormous investment, and an opportunity for cities to have a relationship with a company and have some kind of a quid for quo, [00:10:30] we let you company build, but here's what we want in return. Sometimes it was all kinds of wonderful things. There were public interest studios available for people to become cable creators. In essence, the equivalent of today's Internet creators. There were opportunities to get financing from the companies to support various public services, and the city had the ability to cap rates. So [00:11:00] what this does is it puts in public hands opportunities to do a lot of good things, but also people running for office, people trying to get votes, people trying to be popular, people trading off one public interest opportunity for another, seeking a lot of money in the franchise fees from the cable companies because if you wanted to build, you had to pay the local franchise fee.

(11:30):
[00:11:30] And so there was both overreaching and some really good policy work done in cable, but it was kind of a mess. So what ends up happening is the industry goes to Congress very, very carefully charted out with an environment where broadcasting was still the dominant player in the video distribution market free over the air television, but cable was able to offer many more channels, a lot more opportunity for content, greater diversity. [00:12:00] I mean, it was a real up and coming alternative and add-on to broadcasting and had all kinds of stories of being thwarted by local governments. And so they really built a dossier and a lobbying apparatus to take on Congress. I mean, I was thrown into this coming out of one battle on telecom and then hit with, just to show you how crazy it was, there was a bill to cap pricing in [00:12:30] telephone rates.

(12:30):
It was HR forty one oh two, and it was extremely popular. All Democrats are forward, a good portion of Republicans are forward. It was led by John Dingell and Tim Wirth and the House of Representatives. And then on comes HR 41 0 3. Also, Tim Wirth from Colorado happens to be the headquarters of TCI, the biggest cable company that is growing exponentially by buying up some of the local franchises. And everyone thinks, well, if 41 0 2 was so good, it might 41 0 3 must be. [00:13:00] It was overwhelming and we were deregulating a monopoly, but they had everyone looking through the rear view mirror of the bad guy is the broadcasters. They're only offering you these three over the air signals. Here's this new opportunity you're going to get more choice, more opportunity. It was just, and Congress bought it, preempted local governments and deregulated pricing of cable.

Christopher Mitchell (13:23):
And so can I ask for a clarification then? So in 1984 is when this bill passes, right? [00:13:30] It deregulated the ability of local governments to set pricing requirements in their franchises.

Gene Kimmelman (13:35):
Yes.

Christopher Mitchell (13:35):
Okay.

Gene Kimmelman (13:36):
This is one of these unfortunate things. Again, if I think of telecom, where you're going into the state Public Service Commission, Public Utilities Commission, or you're going even to the FCC if there's a federal pricing issue, it's consumer groups, it's state utility advocates, a broad organization called naca was one of the groups that was organized with locally funded advocates for consumers [00:14:00] here because we had city officials overseeing cable and getting fees, so getting their own money, but also setting rates. There's no organized consumer group that does cable rates. It was always done just through the city. So you get the League of Cities and the Conference of mayors coming to Congress and what's their number one issue in the deregulation of cable fees? Don't take away the 5% [00:14:30] franchise fee that we've been able to get from them. Well, what about rate regulation? Well, they claimed they wanted to still be able to regulate rates, but it was an issue number two or three or four.

(14:43):
The cities, they got something at the table, the right to keep imposing those fees. The cable companies got no local rate regulation anymore and limitations on some of the other terms and conditions the cities could impose. Cities weren't totally happy, [00:15:00] I don't want to misstate this, but their number one issue they got, which was 5% franchise fees, they could get the money from the company. Nobody was at the table for the consumer. I came in this battle again, coming out of the telecom wars and saw this and opposed the bill, but there was no movement. There were no local groups. I mean, it was a kind of, if you could get free press coverage, everybody would say, yeah, I don't want the prices to go up. But nobody was organized. [00:15:30] So perfect example of the way policy is developed around these issues influences how the political fight unfolds. Fast forward, what happens there is cable gets deregulated. Lo and behold, there's a lot of consolidation and prices start going up pretty fast.

Christopher Mitchell (15:49):
What I find entertaining is this gets into what leads into the first community broadband network in Glasgow, Kentucky with Billy Ray, who I'm sure you crossed paths with many times [00:16:00] where TCI was operating there, no tele scripts, Teles scripts was operating there and later actually became TCI. But they kept raising their fees, and Glasgow decided to build a network that it wanted to use for Smart Grid in the future, and Teles scripts dramatically lowered their price. And Billy Ray and Glasgow advertised that price around the southeast in particular, that they were only paying $5 a month and everyone else was paying 19 or $20 a month [00:16:30] for cable services. And that just led to a bunch of hilarious exchanges and court cases and things like that. So prices are going up dramatically at this point.

Gene Kimmelman (16:41):
Yeah, they go up dramatically. And this literally was a grassroots uprising. Again, I had been kind of bulldozed in 1984 when I started working on this, had very few allies. Cable wins, [00:17:00] they get deregulated. And what starts happening is as the prices go up, people start complaining to their members of Congress, to their senators. The cities start complaining. I mean, they got their 5% franchise fee, but they don't want to take the hit for the rate increases. So they say it's the companies Congress deregulated them. We didn't want that to happen. And so everyone starts complaining. It starts bubbling up. And most interestingly, again, in thinking about the [00:17:30] politics of this, this is the eighties. This is Ronald Reagan, this is George W. Bush. This is a lot of Republican control of Congress. It was a period of deregulation, but a lot of concern in Congress that they went too far and did something wrong.

(17:50):
Simultaneously, the satellite industry is developing and you get movement from the big fat dish satellite [00:18:00] service that's totally rural. The enormous satellite dishes that were being deployed, growing as an alternative because cable wasn't coming into the more rural and less densely populated communities. Sound familiar for broadband, right? But there's discussion of new technologies. We're moving to a digital era and better ways to actually deliver the satellite service, much more cost effective, convenient. It was called direct broadcast satellite. There were a number of big companies investing [00:18:30] in this. And the lead cable company, TCI Run by John Malone, saw this coming and started buying more programming and other cable operators were buying some programming, and there was a benefit to it in a sense of where they could put in capital and they could make the programming better. They could get the benefit of offering their consumers more channels, better services and whatnot, and then make more money from it too.

(18:57):
So there was a positive element to [00:19:00] it. But what they saw was as they were developing new media outlets that were extremely popular with the public, that they had the power, they were positioned to deny those assets to a new upstart competitor Satellite. Satellite industry starts complaining about this, that they can't get the channels to serve their customers. So this is happening as the rates are going up. And we form an alliance basically, and [00:19:30] this is, if I have one story from almost 40 to 50 years of advocacy work is however much I feel good about being a consumer advocate, a public interest advocate. I never won a big battle without industry on my side. There was no such thing. The way American politics works, the power of money in politics, the power of companies, I just could never do it as a pure consumer or standalone public interest [00:20:00] issue.

Christopher Mitchell (20:01):
We see that today also with on unlicensed spectrum, we're often having the cable companies on our side.

Gene Kimmelman (20:07):
I think there's no benefit to purity if it doesn't get you anywhere. And if you can form alliances, even if people have just their own profit maximizing goals but are parallel with the public interest, those alliances are usually necessary to move policy.

Christopher Mitchell (20:27):
Is this like 1989, 1990? Is it earlier? [00:20:30] Is it roughly right

Gene Kimmelman (20:30):
Around? No, it's about 89, 90. So then interestingly, here's the third leg of the stool, not my favorite one, but probably the most powerful one. As we start pushing forward wanting Congress to address this. There are bills introduced their negotiations, but we're still hitting a wall. Cable companies are still very powerful, very influential. And again, keep in mind, Republicans are controlling Congress and the White House, the broadcasters come to the table, [00:21:00] and this was when they had a guaranteed right of carriage on cable called must carry, but they had just had a big fight in the courts and barely held it five four in the Supreme Court. And there was a concern that both long-term, legally that was going to be questionable, and that was not. The cable was now mature enough, and it was bringing in enough money, charging consumers more and more. The broadcasters surprise, surprise, [00:21:30] wanted a piece of the pie.

(21:32):
And that was the beginning of their fight for retransmission consent. So here was an issue that was hard for me because the notion of paying broadcasters didn't particularly bother me if it was payment from the cable company. But if I knew it was coming out of the pockets of consumers, the ultimate effect was possibly higher rates. So here we have a bill pushing for rate regulation and pushing for opportunities for satellite competition and income, the broadcasters, and they want the [00:22:00] right to negotiate for payment. So this is one I wasn't really sure about, but as the politics unfolded, it became clear that then President Bush was likely to veto any bill that went through Congress that had regulation as part of it. And so the broadcasters became my allies out of necessity along with satellite. The other thing that happened, this becomes the three legs of the school competition, [00:22:30] retransmission consent and consumer protection, capping cable rates.

(22:36):
The other straight thing that happened is another kind of political story, cable industry being very strong, was able to block the bills for a while. Finally, there was a negotiation in 1990 about a kind of a watered down version of what could be opportunities for satellite competition and some rate regulation. It had moved through [00:23:00] the house and it was in the Senate. It was the last month of the session. And Tim Worth then Senator from Colorado, effectively blocked the bill because there was little time left and he was able to do it. There was so much anger at the cable industry. This was an example where we came back in 1991, still Republican congress, senate, still Republican president. The leaders on the bill said, let's beef it up and make it tougher regulation [00:23:30] and let's make it more friendly to competition, and we're not going to wait till the end so somebody can just put a dagger in it. And that was the 92 cable act that bill ended up being. The industry rejected a compromise in 1990. That would've been better for them because they could kill it, not seeing that things could get worse in the next Congress.

Christopher Mitchell (23:57):
Well, here again, I mean, it's prelude to net neutrality [00:24:00] where they keep killing weak regulations and we get better ones.

Gene Kimmelman (24:03):
Yeah, it doesn't always work. But there have been these instances of industry overreach where you can push back. But I have to say, even if the members of Congress were angry, it would've never done it just for the consumer movement. It was the broadcasters who brought the added muscle, and we ended up with enough support to override a [00:24:30] bush veto of that bill. It was the only bill that was vetoed and overridden in his presidency. We barely had enough to do it.

Christopher Mitchell (24:40):
So we want to come back when we have more time to talk about the rate regulation aspect of this in terms of the cable act and what happened over the four years after 1992. We don't have time to do that now, but since you've just discussed how we got to that point, I'd like to skip ahead to today and [00:25:00] talk about how people are frustrated with rising costs, but we don't have the same kind of movement developing, and I want to play that out a little bit.

Gene Kimmelman (25:08):
Yeah, it's difficult because coming out of the consumer movement, what I see in this era is the predominant force in public interest advocacy in this space is very much technology based, very much focused on freedom of expression, the opportunities of the Internet, the ability to use [00:25:30] it for democratizing societies and for giving opportunities to underserved communities and disaffected communities. And it doesn't have any history or culture around pricing. That is a huge difference from this world of telecom and the later part of cable of utility regulation as the foundation, a culture and history of actually [00:26:00] monitoring against monopoly abuses and imposing price limits. So all the discussion about affordability of broadband to me, is a little bit surreal because it's not framed on public tools that actually can ensure affordability. It's an aspiration, it's a goal. It's almost like a request of private companies to do something good for the public, which is the exact opposite of what [00:26:30] all the consumer movement fights were of using the powers of law and regulation to impose obligations and duties on monopolies. And so at a moment when it's so clear that we need low price broadband as an essential service across our country and frankly the world, we don't have the policy structure. We don't have the policy tools to impose that.

Christopher Mitchell (26:57):
So let me ask you first about the word consumer, [00:27:00] because I am one of, it feels like a smaller number of people who I chafe at the word consumer when it comes to the Internet, because I see it as a tool of production. And to some extent, I wonder if I'm being pedantic, because if you think of consumer as being the little person, which is to say a person without power, and there are many of them who is taking a part in a service perhaps as opposed to consuming something, well, then we still should have, we could build a consumer movement. [00:27:30] But is there more to the term consumer than that?

Gene Kimmelman (27:33):
I wouldn't get caught up in the word and the term as much as I think what I've been describing is that the consumer movement was part of a whole historical, cultural, political mix of forces around a policy framework. And so if I use that now into the Internet world, what I see lacking most is there is no place in government. We haven't done anything, [00:28:00] whether it comes from one policy frame or another, to have a locus where you can say, this company is ripping me off or being unfair. You public officials do something about it. We go to Congress, we go to state level officials. But no, but there's no Internet oversight authority. There is no digital regulatory agency. So what was built before around consumer came out of an existing framework [00:28:30] that then grew and developed for Internet. We need to create one. We do not.

(28:34):
We just don't have it. So I think there's no conflict between the consumer as the user, the consumer, as also a producer who makes a living off of it. We just don't have an organizing principle around how to pull the elements together. There should never have been, in my mind, a movement for free expression, democratization, open [00:29:00] Internet without part of it being at an affordable price overseen by the public. And we left that out. And then when we get to the pandemic and we get to all the acknowledgement about the importance here and the fact that billions of dollars are then made available for this, it all comes into a framework of, oh, that goes to companies who build the infrastructure to provide the service. But there are no constraints on what they charge. It's crazy.

Christopher Mitchell (29:30):
[00:29:30] And that's because of the lack of what you said earlier of a framework, right, which is, it's one thing if you have a deeply regulated system, particularly a monopoly system, where you can impose obligations on a Internet company if it was in a system like electricity. It is harder when we are post 1996, and I think Susan Crawford has done a wonderful job over the years of articulating Gigi so as well. But Susan comes to mind for some reason [00:30:00] that we are operating as though there is a competitive marketplace. A framework is a competitive marketplace or a regulated monopoly system, but we effectively have one entity. So when people are abused, they can't go to a competitor to receive a better service. And when you have a limited number of things, and typically you would have stronger government oversight to prevent that abuse rather than expecting the market to take care of it. I mean, am I missing anything or is that what we were

Gene Kimmelman (30:29):
Discussing? [00:30:30] No, no. I mean, there was a disconnect. As the advocacy around the Internet developed, it became disconnected from the traditional consumer advocacy on telecom and on a focus on telecom, because you cannot have the Internet without all the wires, all the spectrum that is still part of the telecommunications network and still regulated by the FCC less and less by the state utility commissions over time. [00:31:00] But there was that piece of the framework that was always there, that was the building blocks for the Internet ecosystem. And the advocacy became disconnected between the two. And it was almost as if the people focused on Internet wanted to discard the old. They had a new shiny object, and I get that. But unfortunately, they discarded piece of the framework they needed to make that ecosystem functional [00:31:30] and fair for society, and that's what we're missing today.

Christopher Mitchell (31:36):
When you look at today, do you feel like there is an obvious path that we are missing in terms of trying to have a cohesive framework? There are those who would like to say, let's go back to a regulated monopoly for the wires. And I have trouble envisioning how that would happen.

Gene Kimmelman (31:54):
The only industry we ever reregulated was cable, and that didn't last [00:32:00] very long because it started unraveling in the 1996 Telecom Act. The appetite for regulation is far less today than it was even back then. So I think it's just not a plausible path, even if it does have all the monopoly attributes that we worry about, I think the only thing you can do is try to jumpstart competition in any way, shape, or form you can. And so that's use of spectrum, that's use of whatever regulation you have over the broadband infrastructure. [00:32:30] It's creating opportunities to build, develop new satellite services. I'd say right now there's a lot in low orbital satellites, unfortunately seems to all be controlled by Elon Musk, which I don't know how we got to that point. I mean, that had been tried before. That was an idea that was on the table 25, 30 years ago.

(32:49):
Many of the ideas are not new. They were just not a cost effective or the technology wasn't developed enough at those times. So there are ways to try to crack open at least portions of [00:33:00] markets that can be more competitive. I think that's the only path you have in our society today. And so that's the way I would approach. I mean, obviously I've had many fights to impose utility type regulation and sometimes successfully even the 92 Cable Act, we were creating a federal regulation regime of something that had never been regulated at the federal level, always had been local. There was no kind of structure or framework for it. It was going to be dumped in the FCC. [00:33:30] They had done telecom, telecom had nothing to do with media content. I mean, it was totally alien. So none of us thought that was really going to work long-term.

(33:40):
The whole hope was that satellite competition was going to break open the market, and it looked like it started to at the beginning. And then the digital explosion on cable and cable modem service wiped out satellite. But we thought there was an opening there. Rate regulation was never going to be the long-term solution. It was going to be a stop gap. I think [00:34:00] if you think of it in today's broadband world, is I'm all for looking for ways of capping the price, but that can only be a short-term solution. It's not going to work term, particularly dynamic industries and with the power that these companies have. So you have to be simultaneously finding the sources of competitive alternatives as you try to limit the monopoly abuse in the short run.

Christopher Mitchell (34:26):
Now, one last question. Something that I've been thinking about, [00:34:30] and I know far less about this than many others, but for almost 30 years of the Telecommunications Act, which is a very pro-competitive framework, it seems to me that government has been saying, how do we remove barriers to competition rather than how do we establish competition? Do you think that's accurate? And do we need to move more in the direction of proactively using government power to create enforce open markets?

Gene Kimmelman (34:56):
So this is a long story, but in a nutshell, the 96 [00:35:00] Act, I think only happened because we had broken up Mabell in 1984, the telephone monopoly, the local telephone monopolies were restricted from doing vertical services. They were barred from making equipment from offering what was long distance service, then offering new data services called information services. They were on a campaign to get rid of those restrictions. They [00:35:30] were the driving force for the 96 Act. Once they had the momentum and the support, what people tried to do to ameliorate that was look for ways to promote alternatives to them as competition. The 96 Act itself has a goal of promoting competition that's about the best you can do in law. That you're not just avoiding abuses by monopoly. You're not just trying to keep people from harms from existing powers. You're actually [00:36:00] mandated to promote competition.

(36:03):
So it had all the building blocks there, but besides some bad FCC decisions, our antitrust officials allowed the bell companies to merge. Horrible mistake. I don't know if we could have blocked it in the courts, but we certainly should have tried to do it because it was that expansion of the baby bells that has basically led to [00:36:30] effectively two companies dominating telecommunications ever since. So we went from one to two when we really had the opportunity to break it open to many. And so it was consolidation from Lex antitrust oversight and some excessive deregulation. But the law itself actually had the tools if it had been implemented appropriately.

Christopher Mitchell (36:54):
And those tools include the for sharing of infrastructure?

Gene Kimmelman (36:58):
Yes.

Christopher Mitchell (36:59):
Is that the main thing [00:37:00] or are there other things?

Gene Kimmelman (37:00):
Yeah, that's the main thing. I mean, that's what was being fought from 96 to 2000 the for sharing the infrastructure. Had we done that in a way that Europe effectively did, there might've been other opportunities that would've unfolded. But first we had Bell Atlantic and Ninex merging, and then we had Bell South expanding the MarTech. Then the only forces that we're trying to compete [00:37:30] from a vertical side, MCI and AT&T and long distance, they end up being swallowed by these bell companies. And so it all consolidates. The cable industry then consolidates in, pair in tandem with them. And of course, the other piece of this is that the wireless licenses had been given to the baby bells, the bell companies. So the ones who had the dominance over the wire also had the most valuable competitive alternative [00:38:00] assets, the wireless licenses to compete against their own service. They weren't going to do that. So wireless competition could have come much more quickly, much more effectively had we not kept that power in the hands of the wireline companies. Lots of policy mistakes, both from antitrust and deregulation that allowed this industry to remain highly concentrated, and that's the backbone of today's Internet.

Christopher Mitchell (38:29):
Well, [00:38:30] there's a lot of things that I'd like to follow up with, and I look forward to following up with you in another discussion, which I think we may start off with back in 1992 to learn more about what happened when you threw this problem at the Federal Communications Commission. Thank you so much for your time today and sharing your perspectives with us.

Gene Kimmelman (38:52):
Anytime, Chris. Great. Great to talk to you.

Ry Marcattilio (38:54):
We have transcripts for this and other podcasts available @communitynets.org/broadbandbits. [00:39:00] Email us at [email protected] with your ideas for the show. Follow Chris on Twitter. His handle is at community networks. Follow communitynets.org. Stories on Twitter, the handles at muni networks. Subscribe to this and other podcasts from ILSR, including Building Local Power, local Energy Rules, and the Composting for Community Podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives [00:39:30] if you subscribe to our monthly [email protected]. While you're there, please take a moment to donate your support in any amount. Keeps us going. Thank you to Arnie Sby for the song Warm Duck Shuffle, licensed through Creative Commons.