Fighting Monopoly Power: How States and Cities Can Beat Back Corporate Control and Build Thriving Communities

The Institute for Local Self-Reliance, of which the Community Broadband Networks initiative is a part, recently released a report, guide, and toolkit all in one. Fighting Monopoly Power: How States and Cities Can Beat Back Corporate Control and Build Thriving Communities brings together the work of all the Institute's initiatives, which advocate for more local control and less consolidation of corporate power.

Here’s the driving impulse:

Concentration has reached extreme levels. Most industries are dominated by a handful of corporations. As we detail in this report, concentrated economic power has reconfigured multiple sectors in ways that have both weakened the broader U.S. economy, by stifling investment and innovation, and harmed working people and communities. This centralization of power in private hands is threatening Americans’ fundamental right to liberty and equality.

Too often policymakers try to alleviate symptoms. This guide calls for dealing with the root problem. Concentration didn’t happen by accident; it’s not the result of inevitable forces. As each section of this guide details, it’s a product of deliberate policy choices. While some of the changes needed are federal, especially antitrust and financial reform, states and cities have potent tools and, as we show, some are using them. During the last Gilded Age, local leaders were the first to take action against monopoly power. This is a guide to the policies that state and local policymakers should enact to rekindle that fight against corporate concentration.

The guide covers lots of ground, offering both analysis and policy solutions for the set of problems plaguing banking, electricity, food and farming, pharmacies, small businesses, state attorneys general, waste, and, of course, broadband. 

In fact, broadband constitutes one of the most crucial components of this larger picture. In July 2018 we showed that the impacts of monopoly telecom and cable providers for Americans across the country include high prices, slower speeds, unreliable connections, a refusal to invest in network upgrades, and a dearth of options in rural areas as huge ISPs sought profits in urban markets. Look for an update to this report later this year.

Fighting Monopoly Power: Broadband Internet Access summarizes where we are in 2020 — the vast majority of citizens across the United States have few options for Internet Service Provider (ISP), new entrants face powerful incumbents, and there remains a market which favors consolidation and predatory action. From the report:

• Today, just two cable companies, Comcast-Xfinity and Charter-Spectrum, control more than half of the broadband market. Of 100.5 million total fixed broadband subscribers, the two companies hold 54 million, with AT&T a distant third with 15 million subscribers. [Incumbents over the last two and half decades have] swallowed smaller ISP operations, carved up exclusive geographic portions of the U.S. among one another, and influenced policy to shut out local competitors.
• Today there is a de facto truce between Comcast-Xfinity and Charter-Spectrum, for example, that allows them to compete for fewer than 2.1 million customers in the limited areas where both companies offer service.
• Monopoly control of this essential public infrastructure is leaving many Americans — particularly rural communities and communities of color — disconnected, underserved, or, at best, paying too much for substandard service.
• Telecom monopolies effectively get to pick winners and losers throughout the entire economy. Because virtually all businesses now rely on high-speed Internet access to some degree, this amounts to a form of taxation by way of private business interests.
• [W]hile monopoly cable and telephone companies use notoriously opaque pricing structures, local providers and community networks have been shown to be both more transparent and affordable in their pricing.
• The power of the conglomerates has also impeded local broadband efforts. Fearing competition from local public options, the big cable and telephone companies have lobbied — often in coordination with the American Legislative Exchange Council — to limit local authority to create broadband networks. Public policy in 19 states deliberately impedes communities’ abilities to create public options, strengthening monopoly control, and preventing competition, investment, and a better deal on Internet service.

What we can do:

Give Local Governments the Freedom to Connect: State legislatures should remove laws that discourage or prevent local governments from building broadband networks. 

Support and Guide Smaller Communities: Smaller local governments may not often bond or borrow for infrastructure investments. Consider a program that will help them access capital markets, including by aggregating potential debt or with some form of state guarantee.

Collect ISP Data: States and local governments should marshal evidence showing where the ISPs are actually serving customers and what speeds they are actually delivering at what price points.

Build Municipal Networks and Partnerships: Cities should consider building their own networks or making investments to lower the cost of entry for new competitive networks.

Create “One-Touch Make-Ready” Rules: States and cities are embracing “One-Touch Make-Ready” or “climb once” policies that require owners of utility poles to allow one construction crew to work on multiple utility wires. These statutes and local ordinances increase predictability and lower the costs of building a new network.

View the entire Fighting Monopoly Power: How States and Cities Can Beat Back Corporate Control and Build Thriving Communities here. Over time, we’ll be adding to and updating this guide. We’d love to hear your suggestions and learn from successes (and failures) in your communities. Please write to us at info@ilsr.org.