The Senate Commerce Committee held a hearing today on broadband Internet competition, media consolidation, and the future of online streaming video transmission. The witnesses who appeared before the committee were Comcast executive David L. Cohen and AT&T chief John T. Stankey.
Massachusetts Senator Ed Markey questioned the two about competition from municipal broadband providers, referring to Cohen’s repetitive assertion that “99% of all American communities have at least two broadband providers to choose from”. Markey also asked, “Do either of your companies oppose municipalities being able to deploy their own broadband as a third wire?”
Cohen attempted to oppose municipal broadband without appearing to opposing it. He replied, “Generally speaking, as a company, we have serious questions about whether municipalities should get into the broadband business … I was in city government for six-and-a-half years, I know what city government can do. I think it’s a mistake to do to it, and so we will advocate at the municipal government level that we think this is a mistake. The answer is we don’t oppose it — we don’t have the right to oppose it — we have the right to advocate against it.”
Sen. Markey was clearly dissatisfied with Cohen’s response, saying “More competition is the answer to all of these problems.” He continued, “We talk about two, we could talk about three if municipalities deployed broadband … My basic philosophy, this is very simple, is that Darwinian, eye-watering, bone-chilling competition is the answer to all regulation. The smaller the number of competitors, the more regulation you need.”
Cohen retorted, “All I’m going to say is that taxpayer subsidy of poorly-run and ultimately bankrupt municipal broadband networks don’t benefit anyone.”
“But if a community wants to do it, should they be allowed to do it?” Markey asked.
“They should be allowed to do it,” Cohen’s replied reluctantly.
Markey proceeded to ask Stankey the same question. Stankey tried a different response, saying, “If it’s an under-served community where there’s been no private solution…”
Markey then cut him off, and specifically framed the question as being about competition from municipal broadband networks, to make larger companies like AT&T and Comcast offer more consumer-friendly pricing.
Stankey said, “we don’t believe that private companies should actually compete against public-subsidized, taxpayer cost to capital in that market.”
Markey seemed to think that this was part of the problem. “Prices go down dramatically” wherever municipalities get involved, he asserted. “All of a sudden, the two private-sector incumbents find a way to lower prices” when there is competition in the field.
Cohen and Stankey were unable to respond, as Markey’s allotted time expired and the hearing moved on to the next Senator.
The FCC has been mulling the possibility of overruling state laws that forbid the expansion of municipal broadband, most of which were put into place by the cable lobby — the “advocates” Cohen referred to in his testimony.
- By Kylie Frazier