06/26/2007 11:15 am ET Updated Dec 06, 2017

Bush Official in 'Shouting Match' with Open Access Supporters

The Bush administration's top telecommunications official reportedly tried to "shout down" net neutrality and open access supporters after they called him out for spinning America's Internet market as a wonderland of competition and consumer choice.

John Kneuer, assistant secretary of commerce and head of the National Telecommunications and Information Administration (NTIA), "quickly lost his temper and began shouting" after an audience of technology experts pressed him to explain how the U.S. had fallen so far behind other developed countries in providing Internet access to citizens.

Kneuer Bursting Kneuer's Bubble
According to The Register on Friday, Kneuer claimed that free market competition was the reason for the Internet's "great success," dismissing the history of net neutrality protections that have fostered new innovations and public participation online.

Real Free Markets vs. Telco Control

Kneuer, who previously served as a top phone company lobbyist for Washington law firm Piper Rudnick, told the audience that the "free market" (by which he means the current duopoly of large phone and cable companies) should be unencumbered by consumer protections and basic Internet freedoms.

Kneuer is a member of the camp of neo-cons who categorically refuse to "even *think* about regulation to promote competition," writes Harold Feld of Media Access Project.

To prop up their ideology they enthuse over the wonders of the free market, conveniently overlooking reams of data that show a balance of sound public policy and market forces to be the engine driving the Web's real successes.

Kneuer and his industry comrades try to drown out evidence of market failure with pseudo-libertarian talking points about deregulation, free markets and competition. By mouthing this propaganda they provide cover for the phone companies that Web guru Cory Doctorow calls "corporate welfare bums" -- creatures of government regulations that base their businesses on "government-granted extraordinary privileges."

These "free market" industry lobbyists have no problem demanding the federal government leverage its muscle for themselves, Feld says. "Time Warner has successfully petitioned the FCC to force phone companies to terminate cable VOIP calls while the telephone companies have persuaded the FCC to launch a rulemaking to force 'open access' to apartment buildings where cable operators have exclusive video contracts."

So called "pro-competitive regulation" is OK when it gets them into a market. "It's only when someone tries to break open their cozy little duopoly that they suddenly discover the religion of the marketplace," according to Feld.

Broadband Reality Check

So what's the real skinny?

  • There is no competitive marketplace for Internet access in the United States. More than 95 percent of residential high-speed lines are owned by telephone and cable companies. That is a rigid duopoly by any standard. (Source: FCC)
  • The result of duopoly control is higher prices for slower connections to the Internet. Compared to citizens in other developed nations, Americans now pay 10 to 20 times as much for far slower Internet services than those offered by modern European and Asian countries. (Source: Broadband Reality Check II)
  • A full 37 percent of ZIP codes have one or fewer choices of a wired broadband provider. (Source: FCC)

So, Mr Kneuer, when both your phone and cable provider are pushing to gut net neutrality, what other "free market" choices does a consumer really have?

Phone and cable's anti-competitive and anti-consumer practices have stifled innovation in both wired and wireless Internet applications, leaving U.S. services generations behind those available in other developed nations.

They have gained an unfair market advantage by aggressively lobbying lawmakers to hand over control of the Internet.

Sadly, many of these same lobbyists, like Mr. Kneuer, are now unblinking "officials" within a Washington establishment that seeks to help phone and cable companies exploit consumers, stifle new innovation and insulate the status quo.

A free market indeed.