Response to Harold Furchtgott-Roth

Abstract

I have great respect and affection for Harold Furchtgott-Roth, and it seems from his review of Captive Audience that he has respect and affection for me. Luckily for the rest of you, my view of his personality — and his view of mine — is irrelevant. I wanted to begin, though, by acknowledging his personal graciousness towards me.

What is relevant is the striking number of issues in his review on which he and I completely agree. We agree that U.S. presidential administrations for a long time have not thought of the FCC as an important agency or its role in the U.S. economy as vital. We agree that communications policy in the U.S. is not necessarily being made based on the merits of particular situations. We agree that the federal government would probably be terrible at running a nationwide network itself.

Where we differ is in our prescriptions, given this agreed-on background. Mr. Furchtgott-Roth’s conclusion from these premises is that the only answer is to give up. And my conclusion is that we cannot give up.

My conclusion, unlike Mr. Furchtgott-Roth’s, is based on the reality of consumers’ experience in America when it comes to high-speed Internet access. Based on how people actually use these connections and how much they are required to pay, consumers are being gouged; the rich are paying too much for services that are both noncompetitive and second-class, and not enough Americans are being served adequately or at all.

Keywords: communications, internet, monopoly, internet access

JEL Classification: K20, K30, L12, L50