And this respected like a maid, the big corporate heads are not this respected this respected. I think that is a terrible thing because people worked tremendously hard for the casino and for their families, they worked for the community so it means a lot for me to be able to share their stories and up next on booktv after words with guest host andrew blum author of a journey to the center of the internet. This week Susan Crawford and her book captive audience the Telecom Industry and monopoly power in the gilded age p quote the special assistant to the president on Science Technology argues the u. S. Is no longer the forefront of the internet revolution. Internet capabilities of other countries are faster and cheaper than in the u. S. Which could threaten the Economic Future. This program is about an hour. Speethree for being with us. I look forward to talking with you. Lets talk about the basics. What is the status of broadband in America Today . We have a picture that is quite different from the other developed nations. We have the high states of and download speeds in america cable monopolies, local monopolies and each region of the country that dominate that market and so for 85 of americans the only choice where they live is going to be at their local cable monopolists. We dont have any of the fastest 25 cities in the world when it comes to Internet Access in america so we are not in the World Leaders we are somewhere in the middle of the pack and we also have a very deep Digital Divide. So having Internet Access at home is tied to your economic status some may be about half of people with incomes between 30, 50,000 a year have Internet Connections at home but that number is even lower with incomes under 30,000 a year. Rich people tend to have Internet Access at home, and also 9 of americans cant buy Internet Access wherever they live because it is just not available and hasnt been billed out to their areas of that is the picture. Host how did we get here . It seems that the the internet started here and dominates country like to google or facebook or apple still dominate the internet globally. What is the divide and why hasnt it led to peoples home . Guest the great thing about the internet is that you can reach anybody. That is the whole point they are the universal addressable system and the whole idea is that the content provider like google wouldnt be subject to the wind of the telecom provider. But we have a huge split between the ideals and the openness which depend on openness and productivity. And the spirit and the warriors and money expense. Host we started off with the leaders world, the envy of the world. And in about the 70s i am skipping history here, the cable industry was launched in america. It was just for one way entertainment, but as they started competing particularly in the late 70s, cable had a tremendous advantage which was local exclusive franchises and then in 1984 they completely deregulated cable. So since 1984 and now, cable with its model not being particularly open, you know, not being available for the address of devotee everywhere has taken the lead in a financial matter. Its cheaper to update the cable system than to build up the phone wires and every place them with fiber. So weve got to this place of local monopolies as a result of just a false vacuums of the United States. We got rid of a common history of the carriage under which the telephone operators hadnt operated. They had to take everything and make sure it got to a place it wanted to go and they were not allowed to pick and choose. This was a tradeoff for the enormous expense it took to build the telephone system. Secure is the deep problem. These are infrastructure elements that are expensive to build and operate on huge economies of scale. And cable has taken the lead and dominates the market and the Telephone Companies are backing off. As a result of all of this we have no plan to upgrade to the very high speeds around the world, and the Cable Operators have no particular obligation to serve all of america the closest internal Digital Divide. Some years we got there. I would love to spell that out in detail, plus the economics of how extensive it is to build. Its very difficult to see any competitor to cable shopping at right now. Host if there had been a moment where the Cable Companies would have had to act to recognize and however it would have been regulated with having to be recognized that to be the same philosophy that applied to shall come for 100 years that is not the case. Guest that is in the case and hasnt been the case for 30 years. In 1984 weedy regulated cable almost entirely and we tried to get that back in 1982. But theres nothing in the 96 action that would make them act differently. So for the last 30 years, cable has been building under the assumption that they wouldnt be essentially regulate it very much. They see themselves as any private storm in the corner. Its this kind of obligation to serve anybody at a reasonable cost to connect with other networks to the none of that is a part of their industry that was a part of the telephone industry. But they lost this battle to serve americans. The almost back off and they have run into their corner which is wireless so verizon and at t are mostly Wireless Companies not providing the wired infrastructure tips we have the high prices and the Digital Divide internally and the country as a whole is siding in the National Competition to more connectivity. Host lets talk about the common carriage. It does seem to be a way of thinking that we could be dissatisfied in the need for broadband. How is it executed . Guest this goes all the way that people in europe. The idea of where you hold yourself out to the public and providing Data Communications facility in even though you are a private company. So the whole idea of common carriage which actually came but then traveled to railroads and then reaches the telephone industry in 1910 is that in exchange for a essentially a profit moly you get to provide people with surfaces beauty gone public burdens to charge a reasonable rate and serve everyone and to not discriminate when it comes to content. So its not been applied to the Cable Companies if applied to the highspeed Internet Access picture in america host what are the fritz . The Digital Divide. I want to focus more to begin life on the notion of the free and open internet on the sort of threats of democracy not just on the divide, but honda possibilities that the isp and the telecom is actively sheltering or whatever the prices are coming to you put that ahead of the five or the Digital Divide . Guest one is a subset of the affair. With no competition essentially for the highspeed Internet Access in america, the provider has every incentive and no limitations for the price discrimination to make sure that its reaching the markets not serving the poor systematically which helps the Digital Divide issue and ensuring they can provide Specialized Services to of the loan demand will. The risks cant be overstated. You can think of the cable as just one blow of water and that price is controlled absolutely by the gate keeper just about four channels right now apply to the Internet Access. They are moving the technology that would essentially and differentiate all the same stuff but the gatekeeper can pick and choose among the can in a kitchen and look at whatever it wants to when you thought you were going to chicago all opportunities for shifting the dials but would remove the threat to them of the competition from the services that they would like to sell americans. Some think if anything, home security, video, whatever it is, they can choose what would feel more alive to the consumer and pick and choose among what goes on line and just deliver that. So its like living in a gated community. Take the idea of the internet which is all about not having to ask for permission and reach anybody in the world. And speaking of that on top of an infrastructure which is absolutely controlled by a set of me before or five gatekeepers there is a deep conflict and the threats are real. Host you have been restrained yet in your book is about the story of comcast and nbc universal. You mentioned four or five companies, comcast you have not mentioned specifically. Threat you are talking about is that present or future and are there signs that threat is now or is it more concern for the future of this monopoly power cracks guest they are careful to restrain themselves. They fight each other for franchises in the 70s and etds we call them the franchise war. Since then there has been tremendous consolidation for comcast by far the giant. The of 50 million in their footprint in 39 states and about 45 of the American Population is within the comcast footprint. They never compete with their big company brother in and never enter each others markets. Theyve divided the country among themselves so cut time warner has a separate and its very big Second Coming of a distant second but not quite up with comcast and theres others, carter, cablevision and when it comes to the wired highspeed Internet Access, they dominate with the exception of cablevision which has defied all field of competition. But everybody else pretty much stands alone. So the threat is real today to a company like say netflix. So, netflix is responsible for about half of internet traffic and it is eating up a lot of profit. And but their future is entirely the dependent on what the Cable Companies decide to do with them. Whether they make it less convenient for netflix to bring its stream close to people so they can be seen easily and quickly, whether the Cable Companies start charging based on usage so people will start assuming that accessing netflix is going to drive their Internet Access bill of even higher so that they will drop netflix. So the Economic Future completely is dependent. And all that is just one story of hundreds of thousands that have to do with the power of a single gatekeeper overall information reaching American Homes. Host in my own inspiration the National Internet works it is a lot of competition. The backbone companies are not particularly profitable. The prices are constantly dropping. Bandwidth is constantly going up. But then again at the moment where the International Networks have to connect to comcast, that becomes very contrast it. Host this is the entire picture. It is cheap and should be getting cheap. To carry longdistance and yet because of this bottleneck controlled by a few actors with access to the home they can charge whatever they want. So where you might see the contested market, and i actually im not sure that that is going to see the case because there are stops with each other, but anyway putting that aside, even though the band with is getting cheaper and the computation is getting cheaper the whole price of the system is going down except for businesses and consumers that have to buy these connections because theres absolutely no control over the price and so price quote become a liability, all of that is up for grabs and the cable industry by the way has the lowest reading of the Consumer Satisfaction and any industry in america. Host do you think americans will stand a very long . We have the industry power and possibilities. Im vision bdy is almost like a organic Internet Access, whatever you want to call it but there is a future in which if there are possibilities for different options we can choose a surface that if it is not public and perhaps this transparent or it is past, something that sorted has some spirit not separate from these giant monopolies. Do you think people would choose that if the opportunity were there . Guest is there an assumption behind the ability even have to choose . Im not sure that makes sense. Thats because these services is as an economic matter or a monopoly. It is so expensive to build them out initially. And then you need a lot of revenue flowing in to pay yourself back for that. And it doesnt make sense to have more than one wire to a home. And so its very difficult for the competitors to enter this field. Its just like water or electricity. You wouldnt want to of those connections to your home for which he would choose. Its to ensure that there is a fiber to the home connection and every single citizen is just like clean water and electricity host the whole connection meaning the strand of class allows some this information. Guest what is the stock is that the cable physical connection as often secondbest to progress. So the cable is called the hybrid coaxial and was built initially this network for the passage consumption of information, and it can be upgraded to very high download speeds to. But as an upload matter it is very cramped in this architecture. We think of ourselves as all publishing and going to the doctors from our homes, all these things we should be doing. That is going to require a fiber to the home connection and as you said, a single strand of a class they carry 90,000 tv channels and they can be upgraded infinitely as far as we can tell. Guest the capacity is integrated with the electronics on the end. Host who owns the fiber and how do you begin to build that out . Guest with a deep tradition of private operators building our networks subject to public obligations. That is where the phone company came from and worked very well. And thats where this fiber optic National Network eventually is going to come from. I see a progression all over the United States that are really irritated about the high prices and a fellow Capacity Networks they are stuck with and so they are agitating for fiber to be built in their businesses and then to their consumers homes. That progression is a patchwork across the country and it will eventually reach a Tipping Point of jealousy and awareness in america, which will change federal policy in the drive towards having an integrated National Network but not national lives, not owned by the government. That is a tradition of how we do things. That being the private actors a reasonable rate of return in exchange for what is essentially a monopoly on services where the operate it works pretty well. We can also what happens in many developed countries b. C. The operator has to be a wholesale level only had this is coming on and singapore and many European Countries and australia. The operator then is obliged to not allow the retail competitors to reach. People call this home retail. So imagine you run into a new house somewhere in america and in the utilitys you get water and you get electricity in the super system and you get a trace of Internet Service providers, retail Internet Service providers. They will be traveling to you over the standardized wholesale fiber tale that has been built to your house. So, this happens in full today to move into an apartment you have a trace of three or four fiber into the home providers and 50 or 40 bucks a month or the metric which means equal uploading and they are about to the plate to a gigabit. So lots of choice, very low prices and a standard wholesale infrastructure across the entire country. Host this is happening in some places in the u. S. Can you describe what is happening . Guest in chattanooga the electrical utility decided that a great Side Business would be to use their connections to every home in the electrical utilities to provide a string of fiber and we are doing that. We are selling services to residents. They dont have the retail competition that i just explained but it is in the business of making the reasonable price available to everybody. So as a result, the businesses are moving to chattanooga, and they are very excited. Devotee part is excited about this because they are getting the reasonably priced access which to them feels like a utility. Host how to the Cable Companies feel about it . Guest there is a lot of litigation about the system. And more than the 19 states in america its either difficult for the cities to do this because the excessing operators the Cable Companies and that Telephone Companies build in the statehouses and say the cities shouldnt be allowed to compete with us and they tried to make it very difficult for cities to do this. So we see that pattern over and over and again and im hopeful in the next few years some of these will roll back because it doesnt make sense. We removed the power of selfdetermination. Host what is the logic for it all . It is bad for american hunton consumers to not have a choice of cable or fiber. Is it purely their power of the lobby or is there the business argument that they have to invest in their network . Is that what it is . Host it gets a lot of attraction for saying we are serving these communities perfectly well. The city is going to waste money by going int