September 19, 2020

Why Do Josh Hawley’s Cures For ‘Big Tech’ Always Oddly Omit ‘Big Telecom’?

Over the last year, giants like Amazon, Facebook, Google, and Apple have all faced growing calls for greater regulatory oversight and antitrust enforcement, something that isn’t particularly surprising. After all, experts have noted for decades than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook’s repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate “big tech.”

But while Silicon Valley giants now face an endless cavalcade of outrage in DC, the telecom sector is suddenly seeing no scrutiny whatsoever. Whether it’s the speed at which the problematic T-Mobile merger is being shoveled through the DOJ and FCC, or the blind eye being turned to major telecom privacy scandals (like location data), telecom lobbyists have been on a successful tear convincing well-heeled DC lawmakers to ignore the massive, obvious monopoly, privacy, and competition issues inherent in telecom to focus exclusively on the problems in “big tech.”

This crusade against “big tech” has seen no shortage of advocates who’ve historically been absent on glaring and painful monopoly and consumer protection issues in other sectors. Like Marsha Blackburn, who has rubber stamped every fleeting monopolistic and privacy-violating whim AT&T executives have ever had, yet is now branding herself as some sort of consumer advocacy and privacy expert as she rails against “big tech.”

Another major voice in the “battle to fix ‘big tech'” has been Josh Hawley, who has been endlessly vocal about the issues with big tech, but just as absent as Blackburn when it comes to criticizing the same exact problems plaguing the telecom sector. Last week, Hawley unveiled a plan to fix the FTC (pdf) — an agency, he correctly notes, that has been largely feckless when it comes to reining in the bad behavior of lumbering giants like Facebook:

“As it stands today, the FTC lacks teeth. Its jurisdiction is divided. It wastes time in turf wars with the Department of Justice (DOJ) while failing to confront the increasing concentration in our economy, in the tech sector most obviously. And it is woefully unaccountable. The agency as presently constituted is in no shape to ensure competition in today’s markets, let alone tomorrow’s.”

He’s certainly not wrong on that. If anything, he undersells the problem. The FTC has somewhere around 8% of the staff focused on resolving privacy issues as its counterpart in the UK, despite the UK having a fifth as many people as the US. The FTC is also a cesspool of revolving door conflicts, with most employees having either recently left the companies they’re supposed to hold accountable, or simply biding their time until they can go lobby for those same companies. And, like the FCC, its partisan majority makeup results in whiplash as the parties jerk the reins of policy from one side of the spectrum to the other.

This is not some inadvertent error. An understaffed, underpowered FTC is the intentional lobbying byproduct of giant U.S. companies that don’t find taxpayer or regulatory accountability particularly exciting. It’s why even when the FTC finally acts on an issue, its solutions (as we saw with Equifax or Facebook) are pathetic messes that in no way deter future bad behavior (and in some ways only encourage the problems to repeat themselves). It’s a feature, not a bug.

Hawley’s cure for this involves essentially gutting the agency as it stands, then rolling it into the DOJ to provide “clear and direct oversight.” His effort would also eliminate the FTC’s five-member structure, which, like the FCC, is based on a partisan 3-2 split depending which party holds the Presidency. Instead, the FTC boss would fall under the authority of a Senate-confirmed single director serving a five-year term.

There’s stuff under Hawley’s plan that’s certainly common sense — stricter controls on ethics, antitrust enforcement all under one umbrella at the DOJ, etc. The problem is several fold. For one, do we really want ex-Verizon lawyer Bill Barr in charge of the FTC? Couldn’t giving that kind of leverage to Barr only aid his relentless effort to break encryption and put backdoors into, well, everything? Meanwhile, the partisan FTC strife Hawley claims to be eliminating would probably just jump over to the confirmation hearing process, and the numerous hearings and laws you’d likely need to make his plan a reality.

The other big problem: a lot of these regulatory “modernization” plans often wind up being little more than exercises in butchery dressed up as reform once they actually materialize in the wild.

Case in point: with its recent net neutrality repeal, the FCC recently neutered its authority over telecom providers at telecom lobbyist behest amidst claims it would create “internet freedom” and spur investment (neither happened). But contrary to public wisdom, the repeal didn’t just kill net neutrality. It effectively gutted the FCC, shoveling much of its responsibilities over to the FTC — an agency that lacks the authority or resources to actually police the telecom sector. This was, in case you’re a little slow, the entire reason the telecom lobby pushed for it. It wanted consumer protection and accountability to fall into a deep, dark chasm. It’s working, and a lot of blatant efforts by telecom to rip users off or violate their privacy have gone utterly unpunished amidst crickets from “big tech” reformers.

Gutting already shaky oversight is not really “reform,” and I’m curious what happens to telecom oversight if we destroy the existing FTC and hand management of the telecom sector over to Bill Barr. Former Verizon lawyers would be running both the FCC and FTC, and both consumer protection and antitrust enforcement would fall to a duo who’ve shown less than zero interest in reining in AT&T, Verizon and Comcast, or the trio’s thirty year track record of aggressively anti-consumer, anti-innovation, and anti-competitive behavior. Behavior that was being bone-grafted to the American institution while Google and Facebook were still just twinkles in youngsters’ eyes.

One might feel better about this if the perils of telecom monopolies weren’t so utterly absent from Hawley’s rhetoric. When you dig through his plan or his lengthy treatises on reform over at his website or in speeches, big telecom is almost never mentioned — despite the sector engaging in many of the same, or worse behaviors. Much like Blackburn, Hawley appears to have placed the entire onus for the modern internet’s ills securely on the back of big tech, while giving telecom a free pass. Why do you think that is, exactly?

There are certainly plenty of reasons to criticize big tech giants like Facebook, whose face plants on privacy are now the stuff of legend. But big telecom is every bit as bad as big tech. As government-pampered giants that also enjoy unaccountable monopolies over internet access itself, in some ways the sector is arguably worse.

AT&T’s massive ad ambitions rival anything Silicon Valley ever concocted, fusing television, mobile, location, and countless other data sources into what The Verge recently called an “ad tracking nightmare hellworld.” From Verizon getting busted for covertly modifying user packets to track you around the internet to recent location data scandals, the sector’s just as terrible on privacy as anything Silicon Valley has to offer. This is before you even mention that they’re enthusiastically bone-grafted to the NSA.

As companies like Comcast NBC Universal and AT&T Time Warner increasingly push into the ad tech space, they’ve been eagerly pushing a crackdown on the big tech giants whose market share they hope to erode. Any quest to fix the US’ broken antitrust and consumer protection enforcement has to take a bigger picture view that identifies both big tech and big telecom monopolies as part of the same giant problem.

Politicians that fixate exclusively on the former are either being painfully but genuinely myopic, or they’re exhibiting a byproduct of relentless lobbying by the telecom sector, which has been pushing for this special brand of asymmetrical “reform” for several years now.
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