2
THE LONG TWILIGHT STRUGGLE
In the rise of any new medium, a key factor is its relationship to the dominant technology of the day. Since organizations with a large stake in an existing technology are likely to try to preserve their investment—in today's idiom, they are reluctant to “cannibalize” their current business—any policies or legal decisions that give them influence over the new medium may retard its introduction.
—Paul Starr, The Creation of the Media
CABLE STARTED OUT AS A DISRUPTIVE BUSINESS. The first cable systems were mom-and-pop operations consisting of wire strung from antennas on hillsides providing three or four channels of broadcast television to towns that were too remote to pick up a signal. In the 1950s, these so-called community antenna television systems, or CATVs, were springing up everywhere.1 None of them was being regulated by the Federal Communications Commission, which had virtually no information about CATV. But in the summer of 1951 a lawyer running the Telephone Service System Facilities Branch of the Common Carrier Bureau of the FCC, E. Stratford Smith, was sent out to Pottsville, Pennsylvania, to interview a man named Martin Malarkey about how CATV worked and how it should be treated as a regulatory matter.2 Was this new thing Malarkey was running, a service called the Trans-Video Corporation, a common-carriage system like a telephone or a broadcast service receiving signals and delivering them to homes?
In Blue Skies: A History of Cable Television, the communications professor Patrick R. Parsons reports that when Smith got back to Washington, he wrote a memo saying that Trans-Video could be treated as a common carrier, but the FCC deferred any action on the recommendation.3 Smith eventually left the FCC to become counsel to the National Community Television Association (the ancestor of today's National Cable & Telecommunications Association), formerly the National Cable Television Association, which Malarkey had founded in the wake of Smith's visit. In the process of moving from regulator to member of a regulated industry, Smith also changed his opinion: no cable operator has ever wanted to be classified as a regulated common carrier.4
At first, over-the-air broadcasters ignored CATV, considering it a niche market that helped spread their signals farther. But as cable distributors began to sell their own ads, the broadcasters began to realize that cable's growth could undermine their profits. Cable-system technology had improved by the mid-1960s, making twelve-channel systems standard.5 Cable owners used the additional channel territory to rebroadcast signals from distant markets and began exploring non-network, cable-only channels. Television-station owners argued that the cable operators’ importation of distant signals reduced their audiences, while the owners whose signals were being imported complained that those signals had not been paid for.6
Broadcasters mounted an aggressive legal campaign against the cable industry at the FCC by way of complaints and lawsuits. In 1967, when Southwestern Cable was found to be transmitting Los Angeles broadcasting stations into San Diego, a local San Diego station complained to the FCC. The FCC decided the dispute in favor of the local station: even though its governing statute at the time said nothing about cable, the FCC reasoned that its authority to regulate and protect the nation's broadcasting system carried with it the power to regulate cable. Authority over cable's scope of business was “reasonably ancillary” to its existing powers. This interpretation of the FCC's powers had precedent: in 1965, in an effort to ensure that free over-the-air television was not destroyed by the advent of cable, the FCC had issued “must carry” rules requiring cable systems to carry the signals of local television stations. The Supreme Court upheld the FCC's broad view of its statutory powers in 1968.7 Thus, it appeared that the FCC had ancillary jurisdiction to regulate cable, too.
By the late 1960s, the broadcasting companies’ view of cable had changed yet again. Now the cable providers were not simply pirating broadcast programming; under the right ownership, cable might provide additional outlets for network programming by reaching otherwise unreachable audiences. Adding to this impression, the Supreme Court in 1974 held that cable systems were not liable for copyright infringement when they retransmitted broadcast signals as long as they paid standardized license fees. This “compulsory license” helped the cable systems: it brought them access to programming without having to negotiate thousands of individual agreements with powerful, centralized broadcasters. The government intervention helped the insurgent cable business grow. It also ensured that the incumbent broadcasters would remain locked in a relationship with the cable operators.8
At about the same time, President Richard Nixon's Cabinet-level Committee on Cable Communications submitted a stern recommendation to the president. While the nascent cable industry had much to offer and the programming it transmitted should largely remain unregulated by the FCC, the risk of abuse by local monopoly cable providers was too great to be ignored. As the committee warned: “We recommend adoption of a policy that would separate the ownership and control of cable distribution facilities, or the means of communications, from the ownership and control of the programming or other information services carried on the cable channels.”9 The mainstream conservatives at the heart of the Nixon administration felt strongly that cable's “natural monopoly” of distribution facilities—it was so expensive to install that it made sense to have just one in each town—created a risk of the cable operators’ becoming gatekeepers of information. Without a definitive separation between transport and programming, continuous oversight would be needed to ensure that the cable operators’ physical monopoly power was not leveraged into editorial power over the availability of speech and information. A clear separation requirement between content and delivery would impose far less regulatory burden than the constant jockeying and influence peddling that would be involved in assessing whether programming was being fairly treated. Separation, in short, was the lesser of two regulatory evils.10
But the recommendation that a national policy be adopted that would affirmatively separate conduit from content—effectively turning cable into a common carrier—did not prevail. It was too difficult to get a bill through Congress that would do the job; no one involved had enough will to be clear. As the telecommunications scholar Monroe Price put it at the time, the implicit message back from Congress in response to the White House's draft bill was “to continue to allow the economic bargaining [between the cable industry and the FCC] to take place at the agency level, with Congress available as a last resort, not to be utilized except as an ultimate check on the performance of the Commission.”11
Broadcasters have thus had a love-hate relationship with cable distributors since television became widespread. When broadcasters were powerful, they used their sway with the FCC to constrain the markets into which cable could bring distant broadcast programming and ensured that cable always carried their signals. The failure to separate conduit from content made it inevitable that broadcasters and cable companies would always be in conflict. Ultimately, both industries would later discover that there was more money to be made through cooperation than opposition.
Consumers, meanwhile, made little fuss about paying for television over a cable wire. As John Malone, the foremost U.S. cable executive of the 1990s, described the situation to the Wall Street Journal in 2009, “The way it was successful was blending together the transport service with the charge for the content. When you were a cable subscriber, you weren't sure whether you were paying for connectivity or whether you were paying for the content that was embodied in the connectivity.”12 The cable industry from the beginning had blended connectivity with content and did not allow subscribers to buy access to individual channels. But people loved the service, and over the years cable-designed bundles have served the industry well.
Another industry was afraid that cable companies might soon muscle into its business: the telephone companies. In the 1970s, the issue was not whether cable would replace telephone's voice service; that was decades away. It was something more mundane: whether cable could have access to the millions of telephone poles that phone companies had erected around the country. By the 1970s, 4.5 million Americans had subscribed to cable services. But AT&T was charging the cable companies a hefty fee for the right to use its telephone poles to string cable. At the time there was no particular economic reason for AT&T to refuse the cable companies access to its poles on reasonable terms. But no phone company wanted the cable broadcasters showing up in its neighborhood before it had had a chance to roll out its own video service, even though that service was years in the future.13
Representative Ed Markey of Massachusetts, who began his career in the House in 1976 just as the pole-attachment wars began, remembers being mystified by AT&T's attitude. “The phone companies were using their leverage over the poles to jack up prices. Sure, having twenty companies attach their lines to your poles might be a problem. But this wasn't about twenty companies. This was about one or two cable companies. I was amazed that it took invoking the machinery of government to get these guys [the cable companies] in the game.” After three decades in the House, Markey is silver-haired but bright-eyed, his strong Boston accent undimmed by years of commuting to Washington, his shining tie descending expertly from a well-turned collar, his hands relaxed and expressive. He has been at the middle of telecom tussles for years—serving as either the chairman or the ranking member of the House Energy and Commerce Committee's Subcommittee on Telecommunications from 1987 to 2008. There he was the principal author of many of the laws now governing the nation's telephone, broadcasting, cable television, wireless, and broadband communications systems—all the while exuberantly holding hearings and handing out pungent quotes. In Markey's mind, pole attachments are a good example of the ongoing struggles between incumbents and new, disruptive actors who want to provide services to the public. As he put it, “The government is the midwife in helping technology get to the marketplace.”14
Pole attachments had been an issue for cable companies from the beginning. Cable operators can reach houses and offices only by running wires along streets so that lines can be “dropped” to individual subscribers. Wires can be threaded through existing conduits or hung on poles, and in many places early cable-systems operators depended on access to poles that had been built by the local telephone utility. But the phone companies used their control over poles to gouge cable systems, often by doubling or tripling the rates they charged electrical utilities and other phone companies.15 The FCC took up the issue in 1967 and was asked to expedite the inquiry by the NCTA in 1970.16 But six years later the FCC decided that it did not have clear jurisdiction over the issue and tossed it over to Congress.17
After a great deal of wrangling, in 1978 Congress passed a law requiring that where phone companies gave the cable industry access to their poles they would have to do it on reasonable terms to be set by the FCC. These pole-attachment rules are a good example of government intervention enabling a new market. The law gave cable a subsidy—in the form of a preferential rate on access to telephone poles—that is still in place today.18
In the ensuing decades, cable ceased to be a mute pipe for distributing existing content to places with poor reception and became a source of programming. There was a great deal of investment in cable infrastructure to tie together cities and towns, and many new networks cropped up that were delivered solely over cable. But cable operators often overextended themselves and lacked the money to maintain or enhance their networks; they had to raise their prices, and customers complained. Companies began to consolidate, and throughout the 1970s and 1980s, cable distributors fought for control over exclusive municipal franchises. Dozens went out of business.19
Meanwhile, the rules that were supposed to govern the relationships between cable and broadcast, and between cable and telephone, were not altogether clear—and regulators began to worry this could be a problem as the market expanded and the technology progressed. There was a patchwork of authority drawn from federal and state sources, and municipalities and city councils were finding creative ways to be persuaded by cable operators to grant exclusive franchises. As Paul Baran, the father of packet-based communications, described the situation in a 1999 speech, “When the economics of cable allowed extending cable to the cities, there was a bidding war for the franchises. All sorts of games were played at the time, including rent-a-citizen, giving out cheap stock to bribe local political figures, etc.”20 Cities made exorbitant demands for “sweetened” bids, and city officials sometimes used their power to have part of the local cable company's profits assigned personally to them; in return, cable-system operators sought affiliations with well-known locals (“rent-a-citizen”) to bolster their bids and promised cities whatever they asked for—services to libraries and schools, community channels, and interactive systems that often were never built.21
In an attempt to bring order to a complex system of federal and state requirements and to make the franchising process more certain for the cable operators—and in response to concerns expressed by state officials and federal representatives about the discretion and opportunity for corrup-tion inherent in the patchwork of cable-franchising rules—Congress passed the Cable Communications Policy Act of 1984. The FCC had been concerned throughout the 1970s about local franchising decisions but felt that it could not impose uniformity without legislative authorization.
The centerpiece of the law was a provision that only locations without “effective competition” for cable—which the FCC determined to mean locations that did not have at least three over-the-air broadcast channels—would be subject to rate regulation. For everywhere else (about 97 percent of the country) the act lifted price controls at the end of 1986, freeing the cable industry to charge whatever the market could bear for its local monopoly services. The only rates that remained regulated were those for “basic packages,” but cable operators were free to remove from “basic” tiers any channels that were not subject to the “must carry” rules. In effect, this meant almost anything other than the broadcast networks. In short, the FCC's definition of competition meant that cable systems were deregulated by the end of the decade.22
The Cable Communications Policy Act was a triumph for the cable companies, for in addition to deregulating rates it also prohibited phone companies from competing in the cable business. (Even with the breakup of AT&T at about the same time, people believed that the local incumbent Baby Bells could act anticompetitively toward the emerging cable industry if they were given a chance to offer programming.) Monopoly without oversight made the cable companies attractive to Wall Street. Almost every municipality in America had already given a cable company an exclusive franchise, and those companies were poised to make enormous profits.
As things turned out, the broadcast networks did not provide the “effective competition” that was supposed to constrain cable rates, even if there were many municipalities that had enough over-the-air signals to meet the FCC's requirements. Indeed, no business was in a position to constrain these rates; today's satellite pay-TV services that market directly to consumers had not yet been launched. The cable industry did invest in upgrades that improved the country's overall data infrastructure, but this did not improve day-to-day service for many smaller customers. Although in later years the cable industry began providing new services or other inducements to retain customers when rates went up, in the heady days of 1980s deregulation cable companies simply raised their prices.23
By 1990, John Malone's giant Tele-Communications, Inc. (TCI), a Denver business he took over in 1972, was the largest cable distributor in the country, with 8.5 million subscribers, about a fifth of the market.24 TCI had grown through Malone's tough, shrewd management as well as acquisitions and partnerships; as Ken Auletta reported in a 1994 New Yorker profile of Malone, a dollar invested in TCI in 1975 was worth eight hundred dollars in 1989.25 Believing that cable would grow by offering content that was unavailable from free over-the-air carriers, Malone had cut deals with networks like CNN, ESPN, HBO, and MTV that gave TCI the best discounts for programming in exchange for guaranteed distribution to TCI subscribers. Meanwhile, TCI's rates soared, even as customer service plummeted.26
Malone's maneuverings made it clear that it was time to rein in the cable industry. Regulators began to notice that competition from broadcasting services was not keeping cable prices down. TCI's power to obtain programming at the lowest rates going and to control the fate of new programming services was apparent. According to Mark Robichaux's excellent biography of Malone, in 1986 TCI paid ninety cents a subscriber a month for HBO, the largest pay channel of the time, while small cable operators had to pay more than five times that rate.27 Malone had programmers over a barrel: without access to TCI's portion of the market, cable-network programmers could not be certain of getting enough distribution to attract the national advertising that would make the network viable. Then-senator Al Gore called Malone “a monopolist bent on dominating the television marketplace” “he called me Darth Vader and the leader of the cable Cosa Nostra,” Malone later recalled.28
In self-defense, Malone pointed to cable's investment in infrastructure, its wide variety of programming, and consumers’ affection for their cable service. He insisted that he wanted to plow his profits back into growth and investment that would bring communications into the twenty-first century—if only Washington would stay out of the way. Big wasn't bad, he reminded Congress in the early 1990s. On the contrary, to have a world-class cable industry, big was necessary; this was a business that depended on scale and scope. But suspecting that government regulators wanted to break TCI into separate content and distribution businesses, Malone preempted them: he spun off most of his content interests into a new company, Liberty Media.29
The core issue of rate hikes for cable services remained. The General Accounting Office (now the Government Accountability Office) sent a report in 1991 to Representative Markey, then chairman of the Subcommittee on Telecommunications and Finance of the House Committee on Energy and Commerce, showing that the cable industry had taken advantage of price deregulation by raising rates for the most popular basic-service package by more than 37 percent in real terms since 1986. During a single fifteen-month period alone—from the beginning of 1990 until April 1991—the monthly rates for that package had risen by 15 percent while the average number of channels per package had decreased. Consumers were paying more for less.30
In response to public anger over the cable operators’ abusive pricing and practices, the FCC suggested that six over-the-air stations (rather than three) would now be needed to show effective competition in markets where cable penetration was less than 50 percent before cable operators would be exempt from price regulation. But Congress objected to the FCC's attempts to regulate without its own explicit authority; the Cable Communications Policy Act had firmly reinserted Congress into the equation, and the legislature acted again to ensure that the FCC would exert no more “ancillary” authority without the go-ahead from Capitol Hill. Markey and Senator John Danforth, in particular, believed that cable operators were running a scandalously abusive business: rates were skyrocketing, customer service was poor, and the growing vertical integration between cable programming and cable distribution was suppressing competition from satellite-based systems. Markey and Danforth doubted that regulators could rein it in alone, and they hoped that consumers’ anger over cable rates would be powerful enough to support a large-scale legislative effort. After prolonged wrangling, the two struck a remarkable deal.31
The 1992 Cable Television Consumer Protection and Competition Act
Even as cable rates for consumers rose in the late 1980s, the cable industry argued that it needed continued protection from competition from AT&T to enable it to grow large enough to reach all Americans. At the same time, access to programming controlled by the cable distributors was an increasingly contentious issue: satellite-service providers, who were just getting started, would have a hard time surviving unless cable distributors were required to give them access to their programming on reasonable terms. Meanwhile, the broadcasters, who were looking for new revenue streams to supplement their traditional advertising-supported model, wanted to be able to charge cable for the privilege of redistributing their very popular content.32
With all these factors to consider, Senator Danforth and Representative Markey envisioned a deal that would finally bring real reform to the industry. The phone companies were looking to get into cable someday (by entering what they then called the “video dialtone” market), and their competition might force the cable industry to ensure that cable programming was made available to satellite companies (and presumably, someday, to phone companies too). Consumer advocates, while not eager to see telephone companies using their monopoly status to sell video, did want to see an end to exclusive cable franchises and a firm reregulation of cable prices, and they were willing to cooperate with the phone companies to achieve this. They could also find common cause with broadcasters who wanted to ensure that cable paid more than a standard license fee for their network programming.33
Here was a unique chance to do something big: Congress could tackle cable exclusivity, help satellite services, give broadcasters a chance to make some deals, and impose price regulation on cable, all in one legislative swoop. Senator Danforth introduced the bill, called the Cable Television Consumer Protection and Competition Act, on January 14, 1991; Representative Markey launched the same bill in the House, calling it “a pro-consumer, pro-competition bill designed to rein in the renegades in the cable industry who are gouging consumers with repeated rate increases.”34 What made the deal work was adding the broadcasters into the mix—the phone and satellite providers could make the argument that their competition benefited consumers and the still-powerful broadcasters, acting in their own interest, could push the bill through.
The only problem was that the first Bush administration was pushing a deregulatory agenda, and taking shots at cable did not fit in with that goal. In mid-September 1992 the cable industry launched a full-out campaign to defeat the bill, including ads in the New York Times and the Washington Post claiming that broadcasters were trying to “add a 20 percent tax to your basic cable bill” and that any money raised in this manner would “go right into the broadcaster's pockets.”35 Nearly four hundred cable executives traveled to Washington to appeal to their representatives to vote against the bill and sustain the expected presidential veto if it passed. Broadcasting and Cable, an industry magazine, reported that “congressmen were being bombarded by calls and letters stirred up by the industry's massive media campaign against the bill.”36 After the bill passed, President Bush dutifully vetoed it in October 1992, but the Democratic Congress overrode him—for the first and last time during the Bush presidency.37
The resulting legislation, the 1992 Cable Television Consumer Protection and Competition Act, reregulated cable rates, brought competition from the telephone companies into local cable service, helped the fledgling satellite industry gain access to cable programming, and gave the broadcast industry “retransmission consent”: the right to ask the cable companies to pay it for broadcasters’ programming. The central thing that did not happen—the thing that John Malone had feared regulators would do, that Nixon's appointees had urged, and that FCC lawyers had considered appropriate in the 1950s—was to separate content from distribution, forcing companies with de facto municipal monopolies over distribution to act as common carriers. In the end, the act created a thicket of rules that the cable industry has been able to sidestep through relentless litigation and creative interpretation. And cable companies have consolidated through a long series of trades, acquisitions, and deals: where once there were thousands of cable operators with a few systems each, now there are just a few serving millions and staying out of one another's territory. By far the biggest of these is Comcast.
Meanwhile, the telephone industry was pursuing its own video market. The pole-attachment wars of the 1970s demonstrated the leverage AT&T could use to protect its existing market power. AT&T was not pressured by competition at that point; it controlled the U.S. telephone system through its equipment-manufacturing arm (Western Electric), its long-distance arm (Long Lines), and its twenty-two local Bell Operating Companies.
In the late 1970s and early 1980s, AT&T was making it difficult for new competitors to get a toehold in a variety of markets by using its power over local and long-distance service as well as its control of the telephone poles. John DeButts, then the president of AT&T, testified at a 1976 hearing before the House Subcommittee on Communications that if someone were to plug non-AT&T equipment into the AT&T network, the entire system might collapse.38 AT&T also made it difficult for long-distance competitors: MCI tried to connect its microwave-based system (which used the airwaves instead of wired phone connections) to AT&T's local monopoly networks, but AT&T refused; its Long Lines division had a lock on this business.39
MCI first filed suit in 1974, to be joined by the Department of Justice later that year. It was not until the beginning of 1981, with the support of William Baxter, President Reagan's first antitrust chief, that the case finally went to trial. Even then, AT&T did its best to stop the case during the summer of 1981 through both pressure from its allies in the White House (Commerce Secretary Malcolm Baldrige and Defense Secretary Casper Weinberger were widely reported to be in favor of dropping the lawsuit—Weinberger's argument was that an integrated AT&T was good for national security)40 and through legislation: HR 5158 would have forced the Antitrust Division to drop the case by legislating a less onerous solution to AT&T's monopoly power than divestiture. Markey was unable to prevent HR 5158 from leaving the Energy and Commerce Committee in the House, and the bill was subsequently referred to the Judiciary Committee. There Chairman Peter Rodino sat on it, a brave decision, given that his home state of New Jersey was also AT&T's home state. Markey mounted the House of Representatives equivalent of a filibuster in 1980 to stop AT&T's efforts to pass HR 5158. As he told me in an interview, “I came to see that AT&T's resistance to innovation was at their heart.” His delaying tactics included demanding a reading of the complete bill (a formality that is usually waived) and the introduction of more than fifty amendments on which he forced debate. “We dragged it out so long that time eventually ran out.”41
The Reagan Justice Department's antitrust suit continued despite staunch opposition from within the administration. Finally, in 1982, Baxter persuaded AT&T to spin off its local companies and re-form them into seven independent regional Bell Operating Companies (RBOCs, pronounced “ARE-box”), a long-distance company (which retained the AT&T name), and Western Electric. The court document setting forth the terms of the breakup, the Modified Final Judgment (MFJ), was finally implemented in 1984 under the jurisdiction of Judge Harold Greene of the Federal District Court for the District of Columbia.42
The breakup of AT&T worked, mostly. It allowed MCI and new compe-titor GTE Sprint to offer long-distance phone service, creating a more competitive marketplace. Meanwhile, however, the RBOCs were prevented under the MFJ from providing long-distance or computer-processing services and from manufacturing telephone equipment.43
The MFJ limitations did not last long. Just three years after the corporate reorganization called for by the MFJ was finished, the RBOCs arranged for the introduction of legislation, the Swift-Tauke bill, that would let them back into these markets. Markey did his best to keep the bill from being voted on; he repeatedly introduced discussion drafts that kept the clock ticking, in an attempt to run out the clock. “I wanted those Baby Bells to develop their own independent lives,” he said. He remained focused on the importance of competition: “I thought that innovation would spring out of the best regulatory environment, one that honored competition. The longer we could avoid the mother-and-child reunion, the more innovation we'd be able to bring into the marketplace.” He managed to stave off the mother-and-child reunion in 1987, but in 1993 the Baby Bells succeeded in getting the MFJ's limitation on their ability to perform computer-processing tasks lifted through a successful appeal at the D.C. Circuit Court of Appeals. Judge Greene issued a fifty-three-page opinion following a remand from the Appeals Court, forcefully expressing his view that the Baby Bells were anticompetitive and should not be permitted to generate the content of information services. As Judge Greene put it, “Were the Court free to exercise its own judgment, it would conclude without hesitation that removal of the information services restriction is incompatible with the [MFJ] and the public interest.” But the Department of Justice had recommended elimination of the restriction and the Court of Appeals had mandated that Judge Greene lift it. With the passage of time the Baby Bells had amassed the political capital they had wanted: they were ready to rid themselves of Judge Greene's control through legislation.44
In response, Markey offered a bill in which the telephone companies could be allowed into video services and long-distance services but would have to open their networks up to competition. Markey's bill, which passed the House in June 1994 by a vote of 423 to 5, required the phone companies to open up the “local loop” (the lines between a central switching station and individual houses) to competitors. It preempted state laws against competition with local phone companies and also included a provision to unbundle equipment with cable service. And it let the phone industry into the cable business. Phone would do cable; cable would do phone; manufacturers would be allowed into a new area of competition. All parties—cable as well as phone—would get what they wanted, but in exchange they would have to submit to the marketplace.45
When the Republicans took control of both houses of Congress in the 1994 election, however, the bill had to be reintroduced on a bipartisan basis. Many Republicans had already voted for it, so it became the first section of another bill. The other sections of the new bill were not quite what Markey had wanted: Title 2 once more deregulated cable pricing, and Title 3 deregulated other media. Now in the minority, Markey and his team battled on, getting amendments added and changes made, eventually reaching the point at which the bill, though not as strong as the 1994 draft, nonetheless would launch greater competition. It is now known as the 1996 Telecommunications Act.46
The 1996 Telecommunications Act
Here are the conditions that shaped the 1996 act: the Baby Bells were demanding permission to compete with the cable companies and to offer long-distance services. The cable companies were finding ways to continue to overcharge consumers. Consumers wanted competition for local phone service. And congressional power now belonged to the Republicans.
The 1996 act set up a grand bargain: it tried to force competition into all telecommunications markets while also deregulating them. The Bells had to give smaller companies access to their circuits, and the cable companies had to allow the Bells to compete with them for cable service. Local telephone companies could now offer long-distance service outside their own service areas, but in order to offer long distance inside their service areas, they had to prove that they had opened their local phone markets to competition. Rate regulation for cable systems was ended other than for the “basic tier” of programs; the theory was that stiffer competition from telephone companies (now in the video business) would constrain rates.47
Congress did leave in place an FCC requirement that limited the percentage of the market that one cable provider could control up to 30 percent of all pay-TV subscribers. The FCC argued that the 30-percent-ownership limit was “generally appropriate to prevent the nation's largest MSOs [multiple systems operators—that is, the cable companies] from gaining enhanced leverage from increased horizontal concentration,” while ensuring that “the majority of MSOs continue[d] to expand and benefit from the economies of scale necessary to encourage investment in new video programming services and the deployment of advanced cable technologies.”48
What the act did not do was keep the cable companies from clustering their operations (“you take Minnesota, I'll take Sacramento”) or the telephone companies from consolidating. Even before it passed, two of the Baby Bells, NYNEX and Bell Atlantic, were rumored by the Wall Street Journal to be considering a merger. Within a few years, the Baby Bells were merging rapidly: SBC bought Pacific Telesis, then Bell Atlantic and NYNEX merged. There was activity in long-distance markets as well: AT&T bought Teleport, and MCI bought a metropolitan fiber network called MFS. Bell Atlantic merged with GTE and renamed itself Verizon. SBC bought Ameritech. By 2005 America was effectively left with two wired companies—Verizon and SBC.49
At the same time, MCI and the old AT&T (still in long distance) kept trying to enter local markets and were having a hard time. They faced a firestorm of litigation over the regulations the FCC had created to force incumbents to share their facilities with their competitors. Essentially, the Baby Bells used the courts to avoid the act's requirement that they open up their local networks to competition. The ensuing litigation went on for ten years. When it was over, the 1996 effort to open up phone lines to competition was widely considered a failure. In the end, the D.C. Circuit and the FCC so softened SBC's obligation to lease its facilities that AT&T had effectively no chance to get into local competition with the Baby Bells. The regulators had been thoroughly out-lawyered.50
AT&T gave up and announced in January 2005 that it would be bought by SBC—and bringing everything full circle, SBC renamed the new entity AT&T. Verizon acquired MCI at the same time. Both Verizon and SBC claimed that they could increase efficiency by combining long-distance with local phone services, but whether those cost savings would be passed along to consumers was not clear. The new AT&T, as an integrated company, saw “positive indications of pricing stability” after the merger. In other words, competition would not be a problem.51
What had happened to the competition that the 1996 law was supposed to foster? The act's fundamental assumption, that open platforms and alternative technologies would undermine the market power of the incumbent carriers over basic communications platforms—and that behavioral regulations on these actors would make structural limitations unnecessary—has proven overly optimistic. Although the phone companies were supposed to allow competing carriers to share their facilities, and the cable companies were supposed to compete with the phone companies to provide distribution of video content, data, and phone services, the opposite happened. On the phone side, without limits on mergers, consolidation and litigation foiled the act's open-access mandates. At the same time, cross-technology competition between phone and cable turned out to be weak: when it came to wired access, the incumbent cable operators had unbeatable economic advantages over the phone companies.
Internet access, a service provided by both phone and cable companies, could have disrupted all these giant companies’ efforts to block competition, if only the open-access mandates of the act had held firm. But the mergers were not what undermined the power of Internet access to eliminate the gatekeeping role that the carriers enjoyed. It was the FCC itself.
Michael Powell, chairman of the FCC from 2001 to 2005 and now the leader of the cable industry's trade association, has an easy speaking style. He is clearly aware of the overstated rhetoric that often characterizes titanic battles over telecommunications policy and is happy to follow suit in his tone and choice of words. He raises his eyebrows, speaks blazingly fast, makes his points lightly, and, having made them, moves on. He often told reporters that he was enjoying being the FCC chairman, and he seemed to mean it.
Powell was born in 1963 in Birmingham, Alabama, and as the only son of General Colin Powell, he heard the call to public duty at a young age. Scholarly by temperament but convinced of the importance of the armed forces, he enlisted in the army after college and suffered a broken back when the jeep he was in crashed in a rainstorm and rolled over on him; he was flown back to Washington and spent more than a year recuperating. Law school, an appellate clerkship, private practice, and a stint as chief of staff at the Antitrust Division of the Department of Justice launched his public career. During the Clinton administration he was named an FCC commissioner, and he became chairman when his party came to power in January 2001.
Powell is a genuine student of technology who was convinced early on of the transformative power of the Internet. He downloaded Skype as soon as it was released. On his arrival at the FCC, he was shocked to find that 40 percent of the staff engineers were close to retirement. Powell brought an intellectual, inquiring joy to his role at the Commission, setting up “FCC University” to ensure that all staff members understood the technologies and economic questions they were dealing with. As he explained in 2002, “I wanted the FCC University to be the very best employee development program that anyone can find in the US government.”52 Robert Pepper, who served as a policy adviser to six FCC chairmen between 1989 and 2005, said during the Powell chairmanship, “Out of the modern chairmen, Michael Powell is the most technologically sophisticated. He absolutely understands the power of technology. He invested in technology at the FCC—we hired new engineers, we revitalized the technology side of the FCC.”53
Powell's focus at the FCC was to move the agency away from what he liked to call the one-wire problem. As he saw it, for decades telephone service was provided by a single, integrated monopoly—Bell Telephone—whose services had to be regulated to avoid price gouging. In exchange for the grant of that monopoly, the company was obligated to provide certain social goods, like making sure that everyone had a telephone connection and agreeing to serve everyone on reasonable and nondiscriminatory terms.
This was the right approach when there was only “one wire” going into each home. But Powell believed that other technologies, such as cable and perhaps wireless, would become viable competitors to the telephone, creating the possibility of multiple wires competing to provide a range of services. The problem, he thought, was that the regulatory structure had not yet adapted to this new reality.54
Powell's view, which he shared with many conservative economists in the early 2000s, was that when it came to Internet access, competition was not defined as different companies with the same technology vying for customers. Rather, different media—cable, wireless, satellite, and possibly “broadband over powerline” (using electrical connections to send data transmissions)—would compete, thereby providing the constraints on monopoly power that had once been imposed by regulatory structures. Instead of having the government force the key incumbent distribution network—before 1996, the telephone network—to make its poles and lines available to competitors providing Internet access, the distributors (now including wireless and cable as well as phone companies) would compete with one another to serve consumers. The result: protection for consumers against abusive pricing and monopoly-quality service without heavy-handed government regulation.
Powell's goal, then, was to facilitate the creation of multiple communications companies and technologies that would be able to reach homes and provide high-speed access to the Internet. Even a company with a monopoly over, say, cable would still have to compete with telephone and other companies. The existence of multiple deregulated platforms would drive down the price of connectivity and unleash innovation.55
In the long run, Powell's prediction proved wrong. Cable's advantages eventually became unbeatable: more than 90 percent of new wired Internet access subscriptions now go to the local cable incumbent, not the phone company, while wireless access is an entirely separate market.56 But for a few years in the early 2000s, things worked out as he had anticipated: cable systems offered high-speed Internet access and made a few of their channels available for two-way transmissions running over the same hybrid coaxial fiber that brought the cable content into the home: cable-modem service. The development of the cable-modem service in turn drove the phone companies to improve their version of Internet access service over their metal lines: digital subscriber lines, or DSL. These services were clear competitors, at least initially, as they gave consumers access to the Internet at roughly similar speeds.57
This is where the problems began. The different modalities raised a regulatory conundrum: was high-speed Internet access via cable analogous to high-speed Internet over the phone, and therefore in need of the same common-carriage regulations? Or was it something new that should be left unregulated? Powell had another problem in creating a level playing field: if the two services were functionally indistinguishable, why should they be regulated in different ways?
The cable companies were confident they had the answer. Cable had never been regulated as a common-carriage service in the past; phone had been. It would stifle innovation, cable operators claimed, to treat cable-modem Internet access as a common-carriage system, even if the services provided were functionally the same as those of phone companies.58
Powell is by nature a free-market advocate, and he was frustrated by the weight of federal common-carriage regulation under Title II of the 1996 Telecommunications Act. He could not imagine why access to the Internet should be hampered by outmoded regulation. He would point out to anyone who would listen that the 1996 act took as gospel a model in which the technology of any infrastructure is understood to be integrated with the use made of the technology: if a company is running copper wires and providing voice services, for example, it falls under Title II of the 1996 act and is regulated as a common carrier; if it is running coaxial fiber wires and providing entertainment, it is a cable service and falls under Title VI; if it is a broadcaster using the airwaves, it falls under Title III. He felt that these distinctions were fine for old technologies. But they made no sense from a regulatory perspective when it came to Internet access. “When AT&T provides voice, video, and data over the same set of wires,” Powell said, “you have a mess on your hands.”59
Powell believed that when it came to high-speed Internet access via cable modems, he had a choice. He could take the existing Title II common-carriage requirements (nondiscrimination, sharing of connections) and “forbear” from—refuse to enforce heavily—the most onerous requirements, until only the portion of the regulation appropriate for high-speed Internet access was left. Or he could decide what social policies were truly needed (emergency service availability via 911 functionality, assistance to law enforcement) and apply regulations concerning them to high-speed Internet access one by one. As a free-market advocate, he was much happier “regulating up,” starting with a blank, unregulated slate, than ”deregulating down,” starting with the multiple requirements of Title II. “Deregulating down” would require hundreds of pages of “forbearance” findings, a process he found distasteful and wasteful.
Powell had to act: cable-modem Internet access service was already in use, but it was in regulatory limbo. There had been a tussle since 1998 over how to treat it, but by the end of 2001 the Federal Communications Commission had not expressed a view except through one-off assertions in merger reviews. Powell's approach to this question set the United States on the road toward the titanic battles of 2010. Thanks to his bottom-up approach, the essential communications network of our time, access to the Internet, has no basic regulatory oversight at all.
The history of communications regulation in the late-twentieth and twenty-first centuries depended on one basic distinction: regulators have traditionally treated the transport of communications as a common-carriage service—open to all, subject to oversight to prevent discrimination, and bound by requirements to connect to other networks. Everything else, including data-processing services, was treated as a non-common-carrier “information service.” When computers came into use in the 1960s and 1970s, the FCC was careful to draw a line between computer processing (information service) and the transport of data by the carriers (common-carriage service). The FCC did this as a regulatory matter to avoid giving the carriers power, in their gatekeeping role, over data processing. It would have been easy for the carriers to cross-subsidize and dominate data-processing businesses with their monopoly profits, and the FCC was trying to prevent that; it also wanted to avoid burdening the new computer services with the heavy superstructure of common-carriage regulation—rate-making, tariffs, and so on. Carriers were therefore prohibited from offering computing services. They were eventually (in 1980) allowed into this business, but only if they sold their basic transport services separately and without discrimination. The assumption was that carriers would keep selling basic transport under common-carriage rules.60
The 1984 AT&T divestiture was, in turn, designed to ensure that local phone companies would not be allowed to leverage their provision of local service into control over long distance. Under the supervision of Judge Greene, AT&T agreed to sell its Bell operating companies, which in turn agreed not to sell long-distance services, sell or manufacture telephone equipment, or—most important—get into the data-processing business. Then, in 1993, the restrictions on the RBOCs on providing data-processing services (or information services, as we now call them) ended (over Judge Greene's strong objections). This was a big victory for the carriers, and they wanted to cement it into statute. Shortly thereafter, drafting began on the 1996 act, which was aimed at removing communications-policy jurisdiction from Judge Greene's courtroom altogether and moving it to the expert agency—the FCC—while leaving in place the FCC definitions that had separated data processing from common-carriage transport during the proceedings in the 1970s and 1980s.61
From 2000 to 2002, as Powell considered how to classify cable-modem Internet access services—which seemed to have characteristics of both DSL services and traditional cable services—the courts went ahead without him. The Ninth Circuit Court of Appeals decided that cable-modem services were indeed “telecommunications service” providers under the act and so were required to not discriminate and to interconnect; in other words, they were common carriers, similar to the old telephone companies.62
The FCC then declared—after the court had already spoken—that cable-modem service was an information service.63 A data-processing service. This meant it would not be regulated. The FCC asked the Department of Justice to appeal the Ninth Circuit Court's decision, hoping to get the ruling reversed, which led to a Supreme Court decision during the summer of 2005, the Brand X case. As a legal matter, the FCC took the view that the Commission had been handed an ambiguous statute and had done its best to interpret it; the FCC should not be obligated to apply common-carriage principles to all possible carriers, even those the public viewed as providing general-purpose communications-transport services.
The Supreme Court deferred to the FCC's interpretations of “information service” and “telecommunications,” as well as its deregulatory application of those interpretations to high-speed Internet access, overruling the Ninth Circuit Court's inconvenient opinion to the contrary. (This conclusion frustrated Justice Scalia, who issued a stinging dissent, possibly informed by his service as staff to the White House Office of Telecommunications Policy during the Nixon era. He contended that transmission is transmission and that it can be seen as separate from everything else.)64 Shortly thereafter, the FCC declared DSL Internet access service an information service, leaving DSL providers (like cable-modem providers) free to act as they pleased, even to discriminate in pricing and access. Only voice communications over copper telephone wires were still subject to common-carriage obligations—and those services were rapidly losing their popularity.65 The upshot was that all high-speed Internet access service was completely deregulated.
This move created a risk that the carriers would be able to price discriminate—choosing which online services to prioritize based on, say, their affiliation with the service. Carriers could thus ensure that people who wanted to pay more for particular content were able to do so (“capture consumer surplus”)—which, from the carriers’ perspective, would facilitate investment in additional high-speed Internet access facilities around the country. But consumer advocates worried that price discrimination and prioritization could mean that the carriers would be able to decide which uses of their networks were permitted—a power that could inhibit innovation, economic growth, and competition generally. Incumbents always want to block competitors. From the advocates’ perspective, the Powell Commission's regulatory gymnastics served the interests of the enormous incumbent network providers by shielding them from traditional common-carrier obligations that would have allowed upstart businesses to thrive.66
To mollify its critics, during the summer of 2005 the FCC issued an Internet Policy Statement that outlined “four freedoms” for Internet users: access to content, access to applications, choice of devices, and competition among service providers.67 But two of the commissioners deemed this statement unenforceable, and the policy statement itself was subject to “reasonable network management” and the “needs of law enforcement”—unclear concepts at best.68 Given these caveats and the lack of clarity surrounding the policy's legal status, it is not surprising that people who were already worried about the future of the open Internet were not satisfied.69
The “net neutrality” fights that followed Powell's deregulation of high-speed Internet access were fierce and included several prolonged and painful attempts to pass and defeat legislation. But the most important thing that happened next was a discovery by an Associated Press reporter and the Electronic Frontier Foundation (EFF).
During the fall of 2007, many Comcast users began to notice that their ability to share digital files over BitTorrent, an Internet protocol that allows people to share digital files without hosting or streaming the entire file, had been compromised. Most blamed their own computers, or the weather, or a number of other elements. Few guessed that their network access provider was blocking their ability to share video files; even if such a thing were possible, it would not have seemed right. But Robb Topolski, a barbershop-quartet enthusiast (and Intel engineer), and researchers at EFF decided to check out the disruptions more systematically.
BitTorrent works by cutting large files into pieces and allowing other users (peers) to make those pieces available across transport networks, enabling even users of devices with limited bandwidth (such as early mobile phones) to share large data files, like video. The process results in servers being contacted hundreds of times a second, a detail that Topolski and the EFF thought might provide an opportunity for someone to interfere. Independently setting up controlled experiments and trying to download a copy of the King James Bible and other non-copyrighted works, Topolski and the EFF discovered that Comcast was effectively telling both sides of a BitTorrent communication, “Sorry, I have to hang up now,” and forcing the communication to terminate. Comcast was “hanging up” on attempts to use the BitTorrent protocol.70
When Topolski's story was published in the Associated Press, it had a sensational impact.71 Net neutrality supporters had long suspected such corporate interference, and here was their smoking gun—and, in fact, the gun was still being fired every day. Comcast was throttling BitTorrent video traffic that conspiracy-minded technologists thought might be competing with Comcast's own video plans.
Kevin Martin, then the chairman of the FCC, was known for his relentless pressure on the cable industry. He went after Comcast during two public hearings that further added to the uproar.72 (Martin has become known in telecom circles more for his Machiavellian political hijinks than for his policies. This reputation doesn't do him justice; he clearly took action vis-à-vis the cable industry.) At the end of the summer of 2008, Martin announced that Comcast's practices amounted to unreasonable network management under the FCC's 2005 Internet Policy Statement. The Commission imposed no injunction or fine but insisted that Comcast promise to adopt a protocol-agnostic method of network management by the end of 2008.73
Comcast could have let matters stand; the Commission would have continued muddling along under its assumption that it could regulate high-speed Internet access providers (to some extent, at least) under the non-common-carriage Title I of the Telecommunications Act and its dubious Internet Policy Statement. But Comcast was bothered by having to account to the Commission for its network-management practices—to Comcast, the FCC's action appeared to be ad hoc, unprincipled, and based on little more authority than its assertion that the Commission was in charge. Comcast sued, and in April 2010 it won.74
The D.C. Circuit Court of Appeals found that there was nothing in the 1996 act to which the FCC's Comcast adjudication was “reasonably ancillary.” Congress simply had not delegated power to the FCC to regulate network-access providers that the Commission had already labeled as deregulated. That label, it turned out, made a major difference. Powell's desire to “regulate up” (starting from scratch) rather than “regulate down” (by classifying these services as Title II and then restraining the Commission from applying rate regulation and other old-fashioned rules) had proven to be unenforceable; the D.C. Circuit Court ruled that the Commission had no delegated power over Comcast's behavior after it had expressly declined to regulate in this area. The FCC suddenly found itself to be a regulator with no clear regulatory authority over the central communications medium of the age: Internet access.
In short, the Commission had taken the basic idea in the Telecommunications Act—that general-purpose two-way networks should be labeled common carriers, obliged to treat everyone equally—and, with no direction from Congress, had relabeled high-speed Internet access as … something else.
The months following the decision were a frenzy of attacks and counterattacks. A difficult question confronted the FCC: could it continue to label high-speed Internet access a “deregulated” service and still accomplish its regulatory goals of achieving ubiquity, neutrality (an Obama campaign promise), and other policy ends? Or would it have to reclassify high-speed Internet access service as a “regulated” service (a Title II service) in order to tell providers what to do?
The new FCC chairman under President Obama, Julius Genachowski, was in an uncomfortable position. Since the deregulatory decisions in the mid-2000s by Michael Powell's FCC, cable companies had invested billions of dollars installing high-speed Internet access infrastructure and related facilities. Pointing out that 93 percent of the country was now reached by cable infrastructure,75 the cable trade association argued that changing the rules governing how network access was regulated would stifle the companies’ ability to attract investment that could be used to serve difficult-to-reach areas.76
Genachowski is not a bomb thrower. He has an eager way of speaking and a lawyerly, precise mind. He had served on the Harvard Law Review with President Obama and wanted to avoid embarrassing the president; he also wanted to be seen as a business-friendly, investment-conscious centrist. Genachowski had been sworn in at the end of June 2009, and the first several months of his tenure had been occupied with creating the National Broadband Plan called for by the stimulus bill enacted at the beginning of the Obama administration. He had assembled a huge team to research and draft the plan, which was delivered in March 2010. The plan did not propose deep changes in America's broadband structure or make any substantive effort to deal with concentration in the market for Internet access. It did note that there would be a strong cable monopoly for video-speed broadband by 2015—a reasonable point, given that only cable would be sufficiently upgraded to allow for speeds beyond 50 Mbps, that the phone companies were reluctant to make the necessary investments to lay fiber, and that there would be no competition among cable providers—and it suggested that municipalities should be able to bring high-speed Internet infrastructure to their citizens. The report also suggested a lengthy transition in which the government would switch to subsidizing high-speed Internet access rather than telephone service (so-called “universal service”).77
At the same time, the Commission had run a separate rulemaking process aimed at the president's apparent campaign commitment to address net neutrality. Hoping to keep the National Broadband Plan uncontroversial, the Commission carefully kept net neutrality out of it.
But after the D.C. Circuit Court opinion in the BitTorrent case in April 2010, that separation became untenable. The court had ruled that the FCC did not have the power to make Comcast ensure that its “network management” was reasonable—and the arguments the Commission had used to support its exercise of authority over Comcast in the BitTorrent case were the same ones supporting its net neutrality arguments. Using the same legal tactics to support net neutrality would, it seemed, run up against problems with the D.C. Circuit Court. Similarly, the FCC's “universal service” policies in the National Broadband Plan were threatened—only a Title II common-carriage service could be subsidized and high-speed Internet access now fell under Title I. The same labeling that had released high-speed Internet access from regulatory obligations meant that federal subsidies could not be provided to allow Internet access for everyone.
The FCC had hoped to keep the court focused on process, not on the substance of its authority, and both Genachowski and his lawyers were surprised by the outcome of the Comcast case. All other work stopped at the Commission as the FCC considered legal options. Genachowski and his lieutenants did not want to spark a war with the carriers. But they were deeply worried that everything they tried to do would be the subject of prolonged and painful litigation; every step would be examined to see whether it was “reasonably ancillary” to the exercise of the Commission's authorities under the Telecommunications Act, and the FCC would never be able to get anything done. The situation was a mess. And it was about to get worse.
On Monday, May 3, 2010, the Washington Post reported that Genachowski had decided not to reclassify high-speed Internet access as a Title II service in the net neutrality proceeding.78 The incumbent carriers, including Comcast, must have been delighted; this is what they had been fighting for. Then, three days later, the chairman's office issued a press release. The FCC was going to suggest reclassification after all, but would restrain itself—forbear—from carrying out many of the traditional elements of common-carriage regulation under Title II.79 A predictable firestorm of lobbying and complaints arose from AT&T and the other incumbents. How could there be a move toward regulation? Analysts called the FCC's move the “nuclear option.” The rhetoric rose higher: Genachowski, the carriers said, was trying to destroy the communications industry. Even the hint of reclassification was too much for the industry to accept.80
The pressure on the chairman to change his position was intense: AT&T spent almost six million dollars in the first quarter of 2010 alone lobbying the Commission, the Department of Commerce, the White House, and anyone else its lawyers could think of to convince them that the FCC was planning to “regulate the Internet.”81 The company marched on the Hill, getting signatures from 171 House Republicans and 74 House Democrats for letters excoriating Genachowski for considering reclassification of the transport portion of Internet access services.82 The campaign was reminiscent of John D. Rockefeller's attack on Theodore Roosevelt in 1907, when he proclaimed that Roosevelt's antitrust policies would bring “disaster to the country, financial depression, and chaos.”83
Eventually the chairman changed his mind once again: in a follow-up document, he suggested that reclassification was just one of many options on the table. One of the other options, he said, was for the Commission to continue as it had been doing—relying on authority based on “ancillary jurisdiction”—the idea that whatever the FCC was doing would support one of its express statutory delegations. Rather than stating which way the Commission intended to go, the follow-up statement presented all options; everything was still on the table. A long, hot summer of lobbying lay ahead.84
The FCC started holding off-the-record stakeholder meetings to explore whether a deal was possible that would preserve an open Internet without strangling the carriers’ ability to attract investment. Congress began its own series of closed-door sessions. The world of telecom policy seethed with rumors and discontent. In the end, after months of wrangling, the FCC agreed with the carriers in late December 2010 that they would keep their Title I classification.85 Within this framework, the Commission applied a very light hand to wired providers of Internet access, embracing usage-based billing and the idea of “managed services” that would not be subject to neutrality requirements. Wireless providers were freed of any obligation to refrain from discriminating against online applications. For Comcast, this was good news: it could continue its vertical integration plans without having to worry (for the moment, at least) about governmental review of its control over its pipe to American homes. Verizon sued. Someone always sues.
Over several decades, the U.S. government has tried—not always successfully—to force incumbents to let new competitors have access to the materials they need to compete. Where incumbents act as gatekeepers, new technology will not emerge without regulatory help that creates a level playing field for competition and the free flow of information. The government did this for the cable industry in the late 1970s when it mandated pole-attachment sharing, for the computing industry in the 1970s and 1980s when it protected the new industry from the depredations of the telephone monopoly, for long-distance service in the mid-1980s with the AT&T divestiture, for the nascent satellite industry in the early 1990s through program-access rules in the 1992 Cable Act, and for high-speed Internet access in the late 1990s through common-carriage rules for DSL.
Incumbents will also use all available regulatory levers to protect their business models: the broadcast industry used the FCC's broad statutory power to fend off competition from cable in the 1970s; the cable industry used vague program-access rules to make life more expensive for smaller cable providers and satellite companies in the 1990s and 2000s; and the telephone companies used vague language in the 1996 Telecommunications Act to fight attempts to force them to share their local facilities.
Behavioral restrictions are difficult to enforce; structural limitations such as the separation of carriers from content are difficult to achieve politically. The pendulum swings back and forth: cable deregulation in 1984 was followed by reregulation in 1992; the structural separation signaled by Al Gore and feared by John Malone was never carried out, and vertical integration has become common and unquestioned. Genachowski's FCC was apparently not interested in diverging from Michael Powell's view that consumers and innovation would be adequately protected by the market—and that traditional regulation was not necessary.