Issue 7 - Spring 2001
Ralph Nader Vs. Al Gore: What’s The Best Policy
For Democracy And the Internet Economy
(page 1 of 2)

Wired News hosted a particularly lively and informative debate on technology policy during the 2000 election. It featured Green Party presidential candidate Ralph Nader and Al Gore advisor Reed Hundt, former chairman of the FCC during the Clinton-Gore administration. Other presidential campaign offices declined to participate. Here are some key excerpts.

Ralph Nader’s Critique

As a U.S. senator, Mr. Gore was indeed a supporter of public investments in the development of the Internet, and a vision for the Internet to serve educational needs. However, for the past eight years, Mr. Gore has not only coasted on his earlier deeds, he has actively pushed for a new approach to the Internet as something that is far less public.

Beginning with the famous exchange between Mr. Gore and AT&T right after the 1992 election over who would build the "information superhighway," the vice president has followed corporate America in redefining the agenda. It is no longer about information policy; it is about government promotion of e-commerce and the growth of markets.

The Snowe/Rockefeller initiative for funding telecommunications services for schools and libraries is one of the rare areas where the public character of the Internet has been given any attention. To his credit, Mr. Hundt at the FCC, of course, supported this initiative. However, at the end of the day, this isn't a lot for an eight-year legacy.

What is remarkable is how little the Clinton/Gore administration has invested in critical evaluation of technology in the classroom, the development of curriculum, training for teachers, the creation of new public-domain software or content relating to teaching.

For all of Mr. Gore's reported concerns about digital libraries, what has the administration brought forth?

The big push to put government information online came from the grass roots -- librarians and activists such as the Consumer Project on Technology. The decisive movement for government policy on this topic did not come from the Clinton/Gore administration, which was busy raising money from their friend Vance Opperman, then the CEO at legal publisher West Publishing, a company that opposed online access to public records.

Rather it was from Newt Gingrich, who proclaimed in 1994 that all Congressional documents would be published on the Internet for free -- the minute they were available to corporate lobbyists.

While Mr. Gingrich and the Congress never followed through on this promise, his statement at least pointed to a decisive policy goal that never came from the White House.
An endless source of frustration with the Clinton/Gore administration on this score has been the unwillingness to enforce across-the-board limits on the prices that federal agencies charge for data -- hefty prices that limit access except for corporate users -- and the various proposals to privatize and corporatize certain federal databases and publications. Of course, different federal agencies have different records, and under Mr. Hundt's leadership the FCC did a great job.

But there have been battles over opening up the Patent and Trademark databases and the CIA's Foreign Broadcast Information Service, which is marketed by the National Technical Information Service as the World News Connection).

An annual online subscription to the World News Connection is $25 per week, or $780 per year. Want the conference proceedings for Workers' Compensation and Managed Care? You can place your order online for $124. The 18-page executive summary of Hospital Based Managed Care: Cost and Quality is $28.50. How many school children or civic-minded citizens can afford these prices for government reports?

More recently I have been asking the administration to put all government contracts (above a threshold amount) on the Internet, to make the management of taxpayer property and government by contract more transparent and subject to public scrutiny.

I will add that the lack of openness regarding government contracts is astonishing. For example, the Clinton/Gore administration won't even disclose, under Freedom of Information Act requests, for the term of exclusive patent licenses or the royalties paid to the government for taxpayer-funded inventions that are worth billions to big pharmaceutical companies.

Putting existing government information on the Internet should be the easy part. The more challenging issue concerns the funding and support for the free public digital libraries that would focus on materials that are particularly useful for students and citizens. The vice president talked about this when he was elected, but what was actually done?

Mr. Hundt's cursory discussion of competition policy deserves something more than a few self-congratulatory pats on the back for the occasional good works by the bureaucracy.

The Reagan administration split AT&T into seven regional local exchange companies and one long-distance company, with rules in place that stopped the local exchange companies from entering various content businesses. It has been the Clinton/Gore administration that has permitted the Bell Atlantic/Nynex/GTE merger (now Verizon) and the SBC-PacBell-Ameritech merger, reducing the number of big local exchange carriers from eight to four.

This has fundamentally undermined the benefits of the AT&T breakup. With smaller local calling areas, the local exchange monopolies would have had to contend with entry barriers when they tried to grow outside of their market area. But these mergers have given the local exchange monopolies such huge calling areas that they can avoid competition with each other and punish rivals in a much bigger market.

The failures of the FCC, the U.S. Department of Justice and state regulators to protect the competitive sector for last-mile connections is one of the reasons there is so little broadband deployment.

And, without resistance from the Clinton/Gore administration, the new entrants are merging or becoming partners with the incumbent monopolies. The local exchange companies are buying into the new DSL providers. SBC/PacBell/Ameritech is now an investor in Covad, a firm that had filed an antitrust suit against SBC. Verizon is investing in Northpoint Communication.

As Brian Pioskina writes in Interactive Week, NorthPoint and Covad were the two strongest competitors in the market, not just because of their size, but because of the ferocious manner in which they took action in court against the incumbents when business practices were in dispute.

Will the Gore Administration stop these deals? The Qwest merger with U S West was another example of a merger that sought to avoid competition.

If you look at the Internet Service Provider market, you no longer see a group of upstart companies challenging the old-guard telecom players. With few exceptions, you see a bunch of upstart companies that have been bought or become partners with old-guard telecom companies.

Mr. Hundt's earlier assertion that there was no evidence that the cable industry would engage in anticompetitive conduct in the broadband Internet market prompted me, in my previous post, to quote from Disney's devastating accounting of the history of AOL and Time Warner's anticompetitive acts.

Mr. Hundt ignores all of the specific allegations expect one -- the time that Time Warner blacked out ABC from its cable television platform, which he also noted led to swift FCC action to protect Disney.

Then Mr. Hundt accuses me of shilling for Disney, which he calls "Mickey Mouse behavior." To be accused of shilling for Disney by Mr. Hundt, on behalf of Mr. Gore, is of course offensive or amusing, depending upon one's mood. But clearly Mr. Hundt is afraid to deal with the specifics set out, not only by Disney, but by virtually every major consumer group that follows the open-access issue, including the Consumer Federation of America, Consumers Union, the Media Access Project, the Center for Media Education, and the Consumer Project on Technology, not to mention free-speech groups such as the American Civil Liberties Union.

Mr. Hundt's comment on the Cisco initiative includes this naive statement: "Cisco's vision of the Internet fundamentally reinforces the concepts of openness, and the transfer of market power to the individual and/or enterprise user. The tools discussed by Cisco can work for the individual: Every person with a server is part of the vision."

While every person with a server may be part of the vision, what Cisco has marketed to cable companies will by managed by the cable owner, not by the cable subscriber? Perhaps Mr.
Hundt can't see the difference between Time Warner/AOL and AT&T or Comcast and their customers, but I can.

The issue isn't whether or not technology by Cisco or others would permit useful ways to control Internet-data delivery -- they will. The issue is who will control this technology, and what are the consequences for the Internet of tomorrow.

If the cable Internet company decides which data travels fast and which data travels slow, it can and will use this bottleneck to charge content providers premium fees for premium delivery or to discriminate among content providers.

This is not rocket science. The cable industry has been engaged in discrimination among content providers as long as there has been a cable industry. This is what the cable companies do. This is also what AOL does, and it is what every would-be Internet monopoly dreams of, including Microsoft, now an investor in many cable systems here and in Europe.

If Mr. Hundt wants to make a good case for Mr. Gore, he should explain how Mr. Gore will protect the Internet from would-be monopolies, including those in the cable industry who want to turn the Internet into a highly discriminatory content platform with monopolistic pricing for data delivery that isn't lousy (the so-called premium service). This would be more compelling than telling us how Al Gore deserves credit for every new technical innovation on the Internet.

Mr. Hundt's comments regarding privacy seem to suggest the issue will be solved if the Democrats can only control Congress. But what does this mean? Will the Democrats in the
Congress finally stop the Democrats in the White House from using U.S. trade policy to undermine European privacy policies?

Will the Gore appointees to the Federal Trade Commission finally see Internet privacy as something not solved by self-regulation? Will Mr. Gore actually agree that the government must actively protect citizen privacy rights?

Will he agree to the creation of an independent office with a mission to protect personal privacy, as most modern countries do now? Will he support an International Convention on Privacy Protection that will help safeguard the privacy interests of consumers and citizens in the 21st century, as called for by the Trans Atlantic Consumer Dialogue and global privacy groups?

On the issue of privacy, the United States stands alone in opposing meaningful privacy regulation of e-commerce. Why is this so? Because the Clinton/Gore administration has been so focused on raising campaign contributions from the e-commerce industry, where company valuations are often based upon a firm's ability to strip consumers of privacy.

When it has come down to a choice between what investors in e-commerce want and what most American voters want, the investors have had their way. Does Mr. Hundt really believe this will change in the next four years, after what we have seen in the past eight?

In looking at the Internet, one might also ask what has the administration done to support the open-source movement, either through procurement policies (very little), funding for open-source software (not something the administration talks about) or protecting free software developers from software patents and anticompetitive practices targeted at the free-software movement?

In the area of corporate welfare, tax breaks and subsidies for big corporations, there is no end to what this administration will do for the e-commerce industry.

But when it comes to supporting an astonishing citizen movement that is protecting the Internet from Microsoft and other would-be monopolies and providing huge benefits to the economy, the administration is completely inarticulate.

During the government's antitrust investigation of Microsoft, Mr. Gore's daughter went to work for Microsoft. Could he at least respond to the repeated requests for the administration to talk about procurement and the free-software movement? Or find a way to use the federal acquisition regulations to fund the development of public-domain software? More >>


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