Conversing with Crawford: Community Broadband Bits Podcast 343

Susan Crawford: The first step is getting everybody together, having a real consensus that this is important, and then taking the necessary block and tackle steps to figure out what needs to be done, what the gaps are, where the capital will come from, and what the plan is.

Lisa Gonzalez: This is episode 343 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. If you haven't picked up a copy of Susan Crawford's most recent book, hit pause, head over to your neighborhood bookstore, get your copy, and then come back and continue listening to this week's podcast. The Harvard law professor and author of Fiber: The Coming Tech Revolution — and Why America Might Miss It took some time out of her schedule to talk to Christopher about broadband policy and about her book. Susan shares her thoughts on the differences between rural and urban issues and solutions to overcome them both. She talks about the lack of competition in the U.S. She and Christopher talk about some of the communities she visited, and Susan shares some policy recommendations. It's a great interview to get you ready to read a great book. Now, here's Christopher and Susan.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance in Minneapolis, and I have one of my favorite guests back today: Susan Crawford, a professor at Harvard Law and more recently the author of Fiber: The Coming Tech Revolution — and Why America Might Miss It. Welcome back to the show, Susan.

Susan Crawford: Well, it's an honor to be here, Chris. This is really your movement; all I'm doing is writing it down.

Christopher Mitchell: Well, you have supercharged it and I am eternally grateful for you doing that. You know, one of the fun things about this interview is that I don't have to ask you the first question you get from almost every other interview that you give because we can assume the audience is mostly on board with not only what fiber is, but the importance of it. And so therefore, my first question to you is actually just sort of a general question of: do you differentiate between rural and urban Internet access problems?

Susan Crawford: Well problems, yes, but solutions, no. I don't see any reason why people living in rural areas should have second class access, and it's just a policy decision. We did that as a country for telephone systems and for electricity, and it should be the same for the basic communications network. So when we get to the end of this policy road, everybody should have ubiquitous, mostly fiber if not exclusively fiber, cheap, persistent, reliable connectivity in their homes and businesses — wherever you are in America.

Christopher Mitchell: I entirely agree with you, and one of the things that I like about your analysis is the focus on fiber and I think that's important for several reasons that you and I agree on. But, since the last time we've talked, the cable companies are on a path to do DOCSIS symmetrical, where it looks like they'll be able to offer very high quality, symmetrical, very fast speeds. And so I'm curious then if you would think that the urban problem is kind of solved.

Susan Crawford: Absolutely not. First, at what price is really important. How much are people having to pay for this service? Because it looks to me as if the entire country is paying rent to about four or five companies that are doing extremely well. So that's one issue that remains for urban areas — at what cost, and how many people are left out of that great network connectivity because they simply can't afford it? And the second point is that yes, that looks good as an upgrade to their existing capacity, but unlike hybrid fiber coaxial lines, glass fiber really is, as far as we can tell, infinitely upgradable. There is a top limit to what you can do with that cable capacity that will not approach what's possible with fiber. So the two technologies are just not the same, and the idea of making sure that we're matching the rest of the world with our basic wire makes a ton of sense to me and it does to most people in these other countries that I keep visiting. So, long story short, that is not a solution if it's too expensive and not upgradable without extraordinary effort.

Christopher Mitchell: And so then, I feel like we're actually left in a situation in which, as you say, rural areas have second class service — they should not into the future. But given your analysis of the cable monopoly, it strikes me that we're moving into an era in which over time, more rural areas will actually have the first class service and people like me in a cable monopoly area in an urban region will have second class service, in some ways.

Susan Crawford: I think that's right, and I think that sets up some terrific incentives for people in the urban areas to be even more interested in the idea of a public option or a wholesale network or dark air conduit available to lots of competing fiber providers in every city or dark fiber available for lease — something that is a wholesale version of a public option that is available to everybody at a reasonable price, so the retail market emerges in those urban areas. Look, nobody wants to see cable not competing except for the cable companies. So I'm happy for them to be successful businesses, but they have to be subject to competition like everybody else.

Christopher Mitchell: Well, I think the final step of this, walking through this analysis, is that in some areas — you know, and I would be very clear — in some parts of some neighborhoods in urban areas are seeing fiber investment from AT&T, from CenturyLink, from some other of the telephone companies. And so where we see that — you know, you just mentioned creating an open market. Why isn't that competition between, like, AT&T and CenturyLink fiber good enough for a first class city or . . . in this case, a first class city.

Susan Crawford: Again, because of the switching costs. There's a huge lock in effect when you sign up with any one of these operators — very difficult to move to a competitor, and that's a problem because over time, the company that has you locked in can just steadily raise prices and you'll feel sort of helpless to do anything about it. So as a matter of public policy and just respect for human ingenuity, we should make sure that that competition is real, not just temporary and fake.

Christopher Mitchell: Okay. So now that we've gotten there, what is the argument that you've made in the book in terms of what cities should be doing? Because, you know, I think it's clear. We celebrate Chattanooga and Lafayette and Wilson, and they're champions in the book. You tell great stories about them. And yet, if you're advising a city, you're not advising them to go down that particular path.

Susan Crawford: Right, and so many of these cities that are heroes now have depended on their existing municipal electric utilities as a first step towards breeding fiber, and that can't be necessary, right? Because, you know, there are only a few thousand cities in the United States that have a municipal electric facility available, so there has to be a broader plan. So what I'm — what we're all advocating for, Christopher, and I think you more effectively than anybody else in the country, is taking stock of local realities with a broad cross section of the community, making sure that civic officials and the business community and residents and local government all understand the opportunity that they're missing by not figuring out what to do about their fiber situation, and then getting in help to do a feasibility study about what might be possible there, and then moving ahead with political leadership at the political level. It's all about lowering the cost of capital ultimately because it's not rocket science to build these networks, but it is about lowering the cost of capital and getting sterling leadership in place and supporting that leadership to move forward. Increasingly, I'm excited about regional opportunities, not just municipal ones. Watching what's going on in the South Bay, just south of Los Angeles, where a whole bunch of communities are talking about getting together and issuing a joint RFP for dark fiber services — that makes a lot of sense to me. There are ongoing economies of scale that operate at the public level, just the same way they do at the private one. But the first step is getting everybody together, having a real consensus that this is important, and then taking the necessary block and tackle steps to figure out what needs to be done, what the gaps are, where the capital will come from, and what the plan is.

Christopher Mitchell: I'm curious. What gives you hope that we're going to see more of these approaches and more of these regional collaborations, as opposed to this just being a kind of a footnote over a period in which, you know, we'll muddle along for many more years?

Susan Crawford: Well, MuniNetworks.org gives me hope because every day you're putting out stories of different places working on this and learning from each other. It's such a terrific community of people learning from past mistakes, making things work better, becoming increasingly professional in their approach to these networks. And Americans at their best are never cynical. And what also gives me hope is that this is such a thoroughly bipartisan movement across the country. So many of these areas working on fiber are Republican, or labeled that way, as well as Democratic. And that everybody, once they understand this issue deeply enough, is moved to do something about it. So far, every conversation I've had, let's say, with my dry cleaner or the local music store or anybody on the street, once you take the time to explain it, they just say, "Well, of course. Of course that's the way things should be. Why aren't they?" And Americans don't like to be behind and we are so behind the rest of the world, so I'm optimistic because of the American character. I'm very proud of being American, and I know that we will want to get this right and we won't be frustrated by a few companies that didn't do anything.

Christopher Mitchell: Well, I really appreciate that. I know that Lisa will, too. My son is now three years old, so I know that Lisa has done almost all of the work on MuniNetworks.org for the past three years because that's when I kind of handed it off. And since then, I still get the credit, but she does all the work.

Susan Crawford: Yay, Lisa! Yay!

Christopher Mitchell: You know, one of the things that you just said actually reminded me of a conversation I just had in North Carolina with a small business owner who has CenturyLink fiber, and we were commiserating because I also have CenturyLink fiber in our office now. And in my experience, 100 Megabit symmetrical service is amazing. He has not had as good of a result, and we both agreed that the Voice over IP that CenturyLink uses is just awful. I mean, I frequently can't complete calls. I have all kinds of problems with it. And that's just a reminder of something we were talking about earlier in terms of just one fiber line is not enough.

Susan Crawford: Right, quality of service will only come from competition. And the only way that telco or communications competition has ever emerged is requiring structural separation between the wholesale operator or, you know, the dark fiber or dark air part of this and the retail services. As soon as people are allowed to choose hats or wear multiple hats, they start carving up markets and discriminating against others and making sure that they don't have to invest any more capital than they need to. So I think what we're driving at with this idea of dark fiber, dark air wholesale networks is encouraging investment in a tremendously useful facility for all Americans. And that will mean great persistent Voice over IP as well as very high capacity data services that I hope someday we will simply take for granted.

Christopher Mitchell: I'm curious who you aimed the book at when you were writing it. In part, I have to say, the timing is almost miraculous in that it came out in January and here we are at the beginning of February, and I think we're starting to see the media finally catching on to the fact that a lot of the 5G hype was bait and switch. And you lay that out in the book. And so when I was reading it, I was thinking it might go over the heads of a number of people, but increasingly I think, you know, it was just right for certain kinds of people. But I'm curious who you are aiming at.

Susan Crawford: I was aiming it at anybody who is curious and reads the newspaper. It's very approachable as a book. It really tries to tell the story in very human terms and get everybody all excited about the capacity of fiber. And so, I was writing for any small business owner, householder, trying to make this a — it should be a pedestrian subject frankly. And it has seemed sort of technical and far away, but that's because that's the way it's been framed by the incumbents. Actually, it's very sensible. So that was my audience. Everybody's my audience.

Christopher Mitchell: Your first book, Captured, came out and the cable companies had a plan to try and ruin you, they attacked you relentlessly. You know, one of the things I remember is they had, on the day it was published, multiple one star reviews on Amazon. Now, I think they're just desperately trying to ignore you and hoping that no one notices you. Is that your impression?

Susan Crawford: I think that's true. I'm still seeing a little bit. I have a particular detractor funded by Comcast who is always putting comments on Facebook and Amazon, so he's still out there. But I think their goal right now is just to make sure this goes away, and what I'm hoping is that it won't. I'm doing my best to get into mainstream news outlets, whatever I can do to keep pushing the story along.

Christopher Mitchell: Well, I went to what for an employee of the Institute for Local Self-Reliance is great extremes: I wrote a review on Amazon.

Susan Crawford: Thank you.

Christopher Mitchell: And I really hope that other people will too, even if they are also scared of Amazon because Amazon remains one of the key places people turn to look for reviews. And so I hope people that have read the book or who are about to read the book, will do a review on Amazon even though I hope you buy the book somewhere else.

Susan Crawford: Oh, I appreciate that. And yes, I support independent bookstores and I want people to buy it there. I should do a better job of urging people to write reviews on Amazon. I just don't. And in part, I sort of feel my role is just to write the book and then everybody else will do what they want to with it. Other authors are more active in promotion, and this is just a failing of mine. Not to get an army writing about it, but I appreciate the plug and I hope that does happen.

Christopher Mitchell: Well, I did notice that you don't start off every answer to a question with "As I say in my book."

Susan Crawford: No, I don't do that. And I really should.

Christopher Mitchell: So I am totally on board, as anyone knows who's listening to us, with our arguments that local leaders are the ones that have to step up. You make that case very compellingly, but I'm curious because you have worked in the executive branch for President Obama. You know, when you think about this, my impression is that the Obama administration in the last two years tried to figure out any way the executive branch could encourage these types of networks and more or less came to the conclusion that they just don't have much authority or power to do so. So if we had, you know, a president right now that was both competent and willing to take action on this, do you think there's anything that the executive branch can do today?

Susan Crawford: Oh, absolutely. In fact, in the last chapter of my book, I make a lot of these recommendations. Setting a standard for what constitutes the basic telecom service in the United States, that's the role of the executive branch, and having a lot of tax and loan guarantee and subsidization programs depend from that definition would be extremely helpful. For example, operators still running copper lines across the country could be essentially forced through tax policy to abandon those lines and replace them with fiber — and with wholesale fiber, by the way. Operators in particular regions could be given loan guarantees by the Fed, which operates regionally, to lower the cost of capital there and increase and incentivize the deployment of wholesale networks. Gosh, we could just make another kind of Tennessee Valley Authority operation exist in rural areas that would be a wholesale provider of transmission services with connections only to publicly operated or publicly supervised last mile networks. There are all kinds of things the federal government could do, but setting the standard and declaring that this is a priority of the United States would be a very first step. And that the Obama administration did not do.

Christopher Mitchell: That's a very good answer. I did not see that coming. Even though I read the last chapter, I think I was, as I noted, so euphoric for some of the stuff that came right before then in the stories. But I want to note something, that some of the people who listen to this show are more of a fan of cooperatives and that sort of approach than municipal networks. There is some animosity between them. And when you say the kind of authority that might do the wholesale access, I assume you're including the cooperatives as a major component of that.

Susan Crawford: Oh, absolutely, and I'm also harking back to what happened at the time of the formation of the TVA, that its policy was to make business arrangements only with cooperatives and municipals. So you know, a definite bias in favor of these alternative modes of getting basic network connectivity out to people in rural areas.

Christopher Mitchell: You know, there's a line that I read from a 1950s political science paper about the meeting where that decision was made. Harold Ickes, who was a person — I actually have like, I don't know, it's like 2,500 pages of diary for him that was published that I want to read that I haven't gotten around to yet. But apparently, in one of the early meetings about rural electrification, they were trying to figure out how to make it work, and one of his people on the committee said, "Well, we're going to have to work with the electric trusts." And Harold Ickes said something along the lines of, "I won't have it. We're not going to talk to those sons of " — we have a clean tag so I'm not going to finish that off — and he said, "We're going to find another way." And as you said, they focused on the cooperatives and the munis, and I think we've saved probably trillions of dollars in rents because of that.

Susan Crawford: I think that's right. And it takes character to do that because in the current American context that sounds like heresy. What?! Not have the private sector do absolutely everything? And I'm not saying that public-private partnerships couldn't work, but they would be the public in charge and the private operator as a vendor, essentially, helping with construction or operation of networks but at the behest and under the control of the public entity or the cooperative.

Christopher Mitchell: Now I want to talk about Greensboro, North Carolina, because I think Greensboro makes this book work so much better than if you had excluded it. In this book, you talk so much about the great things that Wilson has done, RS Fiber with Mark Erickson and the many people that made that possible. You talk about MINET and we actually just interviewed Don Patten recently using some of the material from the book. You talk about Chattanooga. You talk about so many where there's great things happening. Greensboro, you actually mentioned that you'd read it just after reading George Packer's The Unwinding, which is a fantastic book. So why is Greensboro important for your argument?

Susan Crawford: Greensboro is important because I went to Greensboro expecting to find this kind of scrappy, spunky North Carolinian we-can-do-anything attitude about fiber, as well as everything else, and what I found was not that. What I found was that Greensboro's sort of sinking into a genteel irrelevance in a state that is booming really. Greensboro hasn't really gotten over its past of excluding poor and black people from civic life, that was my finding, and can't really see its way past its current Internet access situation too. Then these things are really of a piece. So the reason why Greensboro is so important narrative, is that the overall story here is that places that can think about fiber as part of a decent respectable life, just a basic affordance, can also think about treating everybody with respect and making sure that the entire community is thriving. That's true and more and more true in places like Wilson, but it is not yet true in Greensboro. They haven't made that turn. It's still suffering from the past and kind of convinced that it's important just because it's Greensboro. And what I found was that although there's some champions in Greensboro, they're not gaining any traction because local government isn't really interested in fixing the Internet access situation, which is dominated utterly by Spectrum, and there doesn't seem to be much will for overcoming the somnolence, really the sleepiness, of the city's business approach. So that's why it's important. It was in contrast to these other places.

Christopher Mitchell: Right. For me, it was such a reminder of the importance of true local leadership, not just someone who's willing to say, "Yeah, that's nice."

Susan Crawford: Right. Exactly. Yeah, they would sort of wave their hands at it and then not do anything. And there are great people there, and I hope they see that I respected what they were up to when I wrote the book but that I could also see that nothing was gonna happen — that it was sort of a plan towards a procedure towards a process without any real leadership behind it.

Christopher Mitchell: Right. Well, one of the things that I felt a little bit shown up on is the story you tell about Tiffany Cooper because it's so great and it just so illustrates why Wilson's municipal broadband network in North Carolina, in the eastern part of North Carolina, which we've talked about many times on the show because they're so pathbreaking — but her story is just a reminder that talking about low income households, you know, isn't just sort of a policy issue; it's real people's lives. And so I'm curious if you want to tell us a little bit about her.

Susan Crawford: Oh, I'd be delighted to. And I also hope people will buy the book — I know I need to start plugging — but I'm delighted to tell the story because it's an important centerpiece here. It was so moving. I just about burst into tears when she said it. So I went to visit Tiffany Cooper, who is a young mom of three sons living in public housing in Wilson. And she told me that being able to add $10 to her rent bill in public housing and have that result in a terrific fiber connection from the city of Wilson was the best thing that had ever happened to her and that she hoped it would happen to everybody else in this country. She said a funny thing. She said, "Whoever came up with this idea, this was genius," essentially. And what she was really excited about was that her sons' grades were improving because they could do their homework from home. She can't get them to the library. She has no ability to drive anywhere, and public transit in Wilson isn't great. And she knows that they are doing better and really focusing on grades because of the network's presence in her home. And she's also getting new training, medical certification for new sorts of jobs by having this fiber connection right there. And whenever I tell this story across the country, people just gasp. You know, of course you should be able to just treat this like a utility and pay an affordable amount and have it present wherever you are: in public housing, expensive houses, wherever. But Wilson really thought this through and they said, "Look, we've got this sunk network cost going into public housing. We're going to make this available to people in multidwelling units and public housing across the city, and we're very proud of it." And so it's one of my proudest moments in this book was being able to report that and then have other people from other cities just gasp when they hear the story.

Christopher Mitchell: It's a great story, and I will note that there are many similar moments like that in the book. I wrote two case studies with Todd O'Boyle, who is a Wilson native, about how Wilson built their network and then how Time Warner Cable fought back in the legislature. As I entered those parts of the book, I was thinking, well, I'm going to know all this, and there was details in there I wasn't aware of. And so, you know, if you found things that surprise me, anyone who picks this book up is going to find interesting things they did not know.

Susan Crawford: Yeah. And what's particularly — thank you for that nice compliment. What's particularly great about the Wilson part of the story is that they were willing to talk about the shenanigans with Time Warner Cable in getting the state law passed and talk about them in detail. And I don't think that's been on the record before. We all sort of know it, but it's great to have it written down and important for us as we attack this issue across the country.

Christopher Mitchell: I think that's right. I mean, I know that's right. I was trying to get into this point which is that, you know, I think one of the challenges is as many of us are bitter about the way, in particular, Republican state legislators but sometimes Democrats have accepted the arguments from the industry, and I think whenever we talk about that, we use language that is guaranteed to antagonize half of the people thinking about politics in the U.S. And so, when I'm trying to talk to people in North Carolina, in particular legislators, I have to remember that I think a number of those Republicans who voted for those bills are now angry at Time Warner Cable. And they may not say so publicly and I think we might think they should have known better at the time, but they did think that the private sector would do better than it has.

Susan Crawford: That's right. We should always assume positive intent on everybody's part, even on the part of the companies because good Lord, we haven't restrained them. We haven't given them any reason to act differently coming from the rule of law, right? So, everybody's acting according to their best interests, and what we need to do is help people understand that the best interests of the country and of our place on the global stage and our ability to act coherently and with respect towards everybody depends on reframing this entire issue — that this is not a luxury, that it's not something that only rich people should have, that it's basic to every form of business in every policy we care about. And that reframing is just beginning to come into view, and whatever we can do to push that along is our job, I think, on earth right now.

Christopher Mitchell: So as we wrap up, I want to ask you about a phrase that you used on the Diane Rehm show, which is one of my favorite phrases. It has a deep history behind it, but I wasn't sure that everyone would have caught it. And that is ruinous competition, and I'm sure you use that for a specific reason. Tell me about that phrase.

Susan Crawford: All of these businesses that seem to us today like ATMs with lawyers on top, like oil or communications, and sometimes banking —

Christopher Mitchell: Electric companies.

Susan Crawford: — electric companies, they have very high upfront costs to set up these initial networks. And so it is in the interest of the companies eventually to divide up markets, to say you take Minneapolis, I'll take Sacramento, because if they start actually competing with each other, they'll just run each other out of business. And that's what's known as ruinous competition. There's a long history of the use of that phrase in the railroad industry around the turn of last century and in oil. It's only rational to have pricing power, to have control over entire markets, and that's what's happened with telecommunications. We can't allow that to happen. This is essentially a natural monopoly service. It only makes sense to have one wire connection going to homes and businesses and that wire should be fiber. And the way to create competition, we've known for a hundred years, is to make sure that that facility is shared and shared according to really clear rules that keep the operator, the wholesale facility, from having any incentive to pick and choose retail providers. That's where we need to get. And the problem is that absent any restraint from law or oversight, these companies and legislators, everybody, will act in their own self-interest to keep the status quo in place.

Christopher Mitchell: So let me add onto that just briefly, and you can tell me that you think that I'm wrong. My way of thinking has shifted over the past 10 years, in part because of where we are and also in part because of economic theory. And that's if I could wave a magic wand and have a publicly owned or cooperatively owned fiber to everyone's home and ban all other forms of access that would compete with that, I would not do that. And that's because I think it is important, even though I think it might be inefficient in some economic analyses. I think it is good to have a little bit of infrastructure competition to keep the owner honest. My thought is the local ownership and accountability provides the best opportunity for that in itself, but also having a competing provider, I think, creates the right incentives, if at least one of those pipes has to be open in the way that you envision to multiple providers

Susan Crawford: Yeah, and I do disagree because we've seen this over and over again. If we believe in intermodal competition, which is what we did when we deregulated the telecom world, that we thought these wires would fight it out with themselves and that would protect consumers, inevitably there's consolidation and they buy each other out. And then you're left with a monopoly and no oversight, so you get the worst of both worlds. So actually, I think the competition comes from benchmarking wholesale providers against each other. This is the way Japan does it, so there's NTT East and NTT West. And you have to keep prices down coming from that wholesale provider. But then a genuine retail marketplace does emerge on top of that wire, and that is the way it should work because otherwise you just have private equity buying out competing networks and consolidating markets.

Christopher Mitchell: Well, I think this has been one of the best interviews we've had. I love all the different topics we got into, and I really hope that people appreciate it and they go out and buy your book.

Susan Crawford: And I hope everybody reads MuniNetworks.org every day.

Christopher Mitchell: Thank you. Thank you so much, Susan.

Susan Crawford: Thank you, Christopher. Talk to you later.

Lisa Gonzalez: That was Christopher and Susan Crawford, author, Harvard law professor, and broadband champion. Find her book at your local bookseller, indiebound.org, or from Yale University Press at yalebooks.yale.edu. We have a transcript for this and other podcasts available at muninetworks.org/broadbandbits. Email us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @communitynets. Follow muninetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them wherever you get your podcasts. Don't miss out on our original research from all our initiatives. Subscribe to our monthly newsletter at ILSR.org, and while you're there, take a moment to donate. Thanks to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thank you for listening to episode 343 of the Community Broadband Bits podcast.