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A modest proposal

Published: Monday, June 16, 2014 11:10 a.m. CDT

Al Jazeera recently covered Chattanooga, Tennessee’s high-speed Internet service (“As Internet behemoths rise, Chattanooga highlights a different path,” June 6). The “Gig,” as it’s affectionately known, operates at one gigabyte per second — about 50 times the U.S. average — charging each customer about $70 a month. It uses a preexisting fiber-optic infrastructure originally built for the electrical power utility.

A couple of little-known facts regarding local Internet infrastructure:  Telecommunications companies were given billions in subsidies and phone service rate hikes back in the ’90s based on their promise to build local fiber-optic infrastructure for high-speed Internet access — then they simply pocketed the money and never built that infrastructure. The original promise was something like the kind of ultra-high-speed, low-price Internet service available in most of Western Europe.

You can get a lot of the facts at the website Teletruth.org. Today, telecommunications infrastructure construction by these companies is down by about 60 percent, while revenues are way up. Instead of near-instant page loads for $40 a month, it’s typical to get gouged for more than $100 and suffer slow speeds and wireless connections that constantly fade out. Believe me, I know — I get my wireless service from AT&T U-verse, and they suck more than a galactic-size black hole. This is a classic example of the oligopoly style Paul Goodman described of the companies in an industry carefully spooning out improvements over many years, while colluding to mark up prices. The telecoms, far from building out their infrastructure to increase capacity, are strip-mining their existing infrastructure and using it as a cash cow while using oligopoly pricing to guarantee enormous profits on shoddy service.

Hundreds of cities around the United States have high-capacity municipal fiber-optic networks just like Chattanooga’s, originally built to support local government communication functions, but they’re forbidden by law in most states (passed in response to telecom lobbying) from using those to offer Internet service to the general public. Not only that, the telecommunications industry raises hell in the state legislatures even when local school districts propose using their own fiber-optic infrastructure to provide Internet service to the public schools instead of paying Verizon, Cox or AT&T for their sorry products. These telecom companies — which received billions on subsidies for a service they failed to deliver — have the nerve to whine that it’s unfair for them to have to compete with a service subsidized by the taxpayers.

So here’s my proposal: In any community like Chattanooga, with an existing fiber-optic infrastructure capable of providing better quality Internet service to a significant part of town, this infrastructure should immediately be put to use for this purpose, with rates set at actual cost of provision. But instead of being administered by the city government, it should be spun off as a consumer cooperative owned and governed by the users.

In Cory Doctorow’s novel Someone Comes to Town, Someone Leaves Town, dumpster-diving hardware hackers in Toronto attempt to construct a free wireless meshwork using open-source routers built from discarded electronics, persuading neighborhood businesses to host the routers at the cost of electricity. In the real world, schools, public libraries and municipal buildings could host such routers and provide free wireless access to those in the areas covered.

In fact, why not take it a step further? Forty years ago, in “Confiscation and the Homestead Principle,” Murray Rothbard argued that government property should be treated as unowned, that it should be claimed (via homesteading) as the property of those actually occupying and using it, and that government services should accordingly be reorganized as consumer or worker cooperatives. Further, he argued that the property of “private” corporations that get most of their profits from state intervention should get the same treatment.

The way I see it, the telecom companies that pocketed those subsidies and rate increases back in the ’90s owe customers about $200-odd billion, plus all the profits they’ve subsequently collected via price-gouging. So when local communities with municipal fiber-optic infrastructure organize those Internet service cooperatives like I describe above, they might as well go ahead and void out the telecom companies’ property claims to the “private” infrastructure as well and incorporate that infrastructure into the consumer cooperatives.

Those who follow the “net neutrality” debate are rightly outraged that Internet service providers are threatening to gouge customers based entirely on their ability to pay, simply because they can. But the proper expression of this outrage is not hacking at the branches through regulatory legislation. It’s striking at the root: The ability of the telecom companies, thanks to government subsidies and privilege, to get away with such behavior.

It’s time to expropriate the expropriators.

Kevin Carson is a senior fellow of the Center for a Stateless Society and holds the Center’s Karl Hess Chair in Social Theory.

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