If We're Going to Break Up Big Tech, We Shouldn’t Forget Big Telecom
Senator Elizabeth Warren proposed breaking up tech giants Facebook, Google, and Amazon on Friday—but big telecom is in dire need of the same treatment.
Elizabeth Warren. Image: Shutterstock
On Friday, Democratic Senator Elizabeth Warren proposed breaking up Google, Amazon, and Facebook in a bid to crack down on anti-competitive tech giants. The proposal, which suggests ramping up antitrust enforcement and unwinding the sector’s most problematic mergers, is poised to be a cornerstone of Warren’s 2020 presidential campaign.
Facebook has received well-deserved criticism for its role in spreading propaganda and the Cambridge Analytica fracas. Facebook privacy scandals are so common lately that users barely have time to digest one screw-up before another pops up. Google has similarly come under fire for the way its domination of online advertising has threatened the sustainability and income of smaller news operations. Amazon is enacting a plan to monopolize not just internet retail, but the cloud computing and transit systems that power online commerce itself.
“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren said. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”
The attention Warren’s proposal gives to breaking up big tech is welcome, and warranted, but it omits another major sector that is equally deserving of—and long overdue for—the same treatment: big telecom.
In recent years, telecom giants like Verizon have been repeatedly caught covertly spying on customers and selling your private location data to a long chain of dubious middlemen, often with little oversight. Giant ISPs often help scammers rip off their own customers, earning them the worst customer satisfaction ratings of any business sector in America.
Telecom presents a unique problem in tech. ISPs like Comcast and AT&T not only enjoy vast media and broadcast empires, but a clear monopoly over access to the internet itself thanks to limited broadband competition.
This domination of both the conduit and the content creates unique anti-competitive opportunities ISPs are starting to exploit in a variety of sneaky ways. For example, telecom giants convinced the FCC in 2017 to neuter itself at lobbyists’ behest, demolishing numerous widely popular consumer protections like net neutrality along the way.
These massive providers are also fused to the United States intelligence apparatus, making them the personification of “too big to fail.” Verizon and AT&T are so politically powerful, when they were caught wholesale spying on American citizens without warrants on behalf of the NSA, they were able to have the laws changed to provide them retroactive immunity from liability.
These same ISPs now hope to expand into the online ad space in the wake of numerous acquisitions, ranging from Comcast’s 2011 merger with NBC, to AT&T’s recent acquisition of Time Warner. As such, it only makes sense to see them as integral components of any meaningful conversation about monopoly power in the US.
Telecom is often forgotten in the midst of our collective outrage over the latest Facebook scandal. Users routinely can be found deleting the Facebook app to “secure their privacy,” yet remain oblivious to the perils of using a spyware-laden stock handset on incumbent wireless networks that track and monetize your daily habits in often staggering detail.
Yet the telecom industry is only mentioned by Warren in passing as an example of “days gone by” monopoly power.
“A century ago, in the Gilded Age, waves of mergers led to the creation of some of the biggest companies in American history — from Standard Oil and JPMorgan to the railroads and AT&T,” Warren said. “In response to the rise of these ‘trusts,’ Republican and Democratic reformers pushed for antitrust laws to break up these conglomerations of power to ensure competition.”
While that is true, in the years since lobbyists have slowly eroded not only regulatory oversight of giant ISPs, but the antitrust authority that’s supposed to act as a last line of defense against monopoly power.
That was made very clear recently when the DOJ face planted during its attempt to stop AT&T’s $86 billion merger with Time Warner, a deal that resulted in higher rates for both consumers and competitors within weeks of closing. Trapped by tightening legal restrictions, government antitrust lawyers are often incapable of proving even the most obvious of harms.
When asked for comment by Motherboard, Senator Warren’s office stated that addressing telecom’s monopoly problems remains a priority. Telecom has been specifically singled out in past speeches by the Presidential candidate.
Much of what Warren proposes—like greater scrutiny of big mergers—would help rein in the telecom sector as well. But activists note that as a uniquely potent threat to the internet, telecom deserves specific scrutiny in any conversation about America’s monopoly problems.
“We can, and must, walk and chew gum at the same time,” Evan Greer, Deputy Director of consumer group Fight For the Future told Motherboard in an email.
Greer pointed out that while the telecom sector and Silicon Valley giants used to be heated adversaries in the early quest for net neutrality, more recently they’ve been working in concert to derail meaningful privacy laws as both sectors look to dominate online advertising with minimal oversight.
“These industries have often tried to snipe at each other in their public relations efforts to take attention off their own bad practices, but the reality is that monopoly power and centralization of both big telecom and big tech pose a significant threat to our most basic rights in the digital age,” Greer said.
Michael Powell, former FCC boss turned top cable lobbyist, has spent much of the last two years urging government to regulate the “big tech” companies his clients want to compete with in the online ad space--while eliminating oversight of his own monopoly clients.
“For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging,” Powell told attendees of a telecom sector event last year, lamenting how Silicon Valley giants also avoid meaningful competition by simply buying their competitors.
The telecom industry routinely engages in this exact behaviour. As attention has fixated on the perils of social media and big tech mergers, wave upon wave of anti-competitive, price-hiking telecom mergers have sailed through the bipartisan approval process. A few examples:Comcast’s superunion with NBC, Spectrum’s acquisition of Time Warner Cable, AT&T’s acquisition of DirecTV, or T-Mobile’s looming merger with Sprint.
Consolidated and largely unsupervised, these telecom giants have open runway to behave anti-competitively for the foreseeable future. Killing net neutrality was just one small part of a much bigger plan to gut FCC oversight of ISPs, shuffling any remaining oversight to an FTC that critics say lacks the authority or resources to properly police them.
None of this is to downplay the negative repercussions that Facebook, Google, and Amazon’s unchecked power has had on numerous sectors. But if a healthy, democratic internet is truly the goal, tackling the worst habits of both “big telecom” and “big tech” simultaneously is going to prove essential in the years and decades to come.
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