Net neutrality was repealed a year ago. Gigi Sohn explains what’s happened since

It's been a year since net neutrality was repealed. Gigi Sohn, a distinguished fellow at Georgetown Law's Institute for Technology Law and Policy, chats with Verge editor-in-chief Nilay Patel about what's happened since by explaining the ripple effect of harmful policy decisions and more. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 0:00Speaker 00

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• 0:54Nilay Patel?

  Hey, everybody. It's Eli from The Vergecast. Got a really fun interview episode this week. I brought on Gigi Sohn, who's a distinguished fellow at the Georgetown Institute for Law, Technology, and Policy. And we talked about net neutrality. So you might remember that about a year ago, the net neutrality repeal officially went into effect. Ajit Pai, the chairman of the FCC, wiped away the 2015 net neutrality rules. And you've probably seen some headlines lately saying that nothing bad has happened. It's been a year of that net neutrality and everything's fine, right? All the fury was misplaced. Well, Gigi worked for the FCC under Chairman Tom Wheeler, passing the 2015 net neutrality rules. She is an absolutely fiery advocate for consumers. And we talked about what actually has happened. It's not one big bad thing.

• 1:37Nilay Patel?

  It's a lot of medium bad things. She actually thinks they're pretty bad. And there's a big court case still pending about whether Pai's repeal of net neutrality is valid. So we got into that a little bit. And of course, I can't help myself. So we talked about whether 5G is actually erased or not. You'd be surprised by the answer. So check this out. It's Gigi Sohn on The Vergecast.

• 1:58Nilay Patel?

  Gigi Sohn is here. Welcome, Gigi.

• 2:01Speaker 03

  It's great to be here.

• 2:02Nilay Patel?

  Yeah, we have been talking to each other for a long time. You've written for The Verge. We've relied on you for many pieces. I know we've talked about you on The Vergecast, so it's great to finally have you on. So there's a thing that I really wanted to talk to you about. It's been a year since net neutrality was repealed, a little over a year, maybe a year and a week. And I just see this rash of headlines. The National Review actually put up a headline that was like, "The Internet Apocalypse Didn't Happen," which is true. It was not an apocalypse. But I want to talk about what has happened with internet service in America over the past year since net neutrality was repealed. What happens next? Sort of the shape of the fight. But really, it's kind of like a death by a thousand cuts. There's a lot of little things

• 2:46Nilay Patel?

  that did happen that aren't great.

• 2:48Speaker 03

  Well, I guess I disagree with you to the extent that I don't think they're little things. I actually think they're very big things, and I think they're just, they're the very, very beginning of worse things to come. So that's the only place where I would disagree. Yes, it's death by a thousand cuts, but the cuts are deeper than I think people think.

• 3:06Nilay Patel?

  So give me some examples. There's some that immediately come to mind, like data caps are back in vogue. I know you want to talk about this story. There's this router fee that Frontier is charging, even if you don't use one of their routers. There's an entire, the FCC just doesn't enforce anything anymore. It gave away its power, so now there's nowhere to go. What are sort of the ones that stand out to you? What are the things that have happened?

• 3:28Speaker 03

  Yeah, I do think it's important, though, to explain to your listeners that, you know, when the FCC, when the Trump FCC repealed the 2015 Open Internet Order, it didn't just eliminate the prohibitions against blocking and throttling and paid prioritization. So in other words, these were things that Comcast, AT&T, Verizon, and Charter were not allowed to do. They were not allowed to control your internet experience. But it also gave away oversight over the broadband industry. It said... It purported to give it away to the Federal Trade Commission. We can talk about why that's, you know, that doesn't work at all. But the fact of the matter is, is the FCC abdicated its responsibility to protect consumers

• 4:12Speaker 03

  and competition in the broadband market. That is the most important thing that happened on December 14th, 2017, when the FCC repealed the open internet order. But let me explain three things, and you alluded to one of them, that have happened in the, in the last year and a couple of months that clearly demonstrate that what the FCC did is, is really terrible for consumers, terrible for competition, and frankly terrible for public safety. I mean, it really goes beyond pure consumer issues. So the first thing that happened, and this is not insignificant, is that during the

• 4:51Speaker 03

  then worst fire in California history, this was about a year ago, Verizon was throttling the Santa Clara County Fire Department's broadband. And Verizon and the Fire Department engaged in a seven-month, get that, seven-month discussion over whether Verizon ought to be throttling the Fire Department's broadband in the middle of huge forest fires. And eventually what Verizon said was, well, we'll stop throttling your broadband if you pay us more than double of what you were paying before for your broadband. And the Fire Department said, well, I have no place to go. I can't go to the FCC. They've abdicated their authority over broadband.

• 5:35Speaker 03

  I can't go to the FTC because they'll only, number one, they take forever to adjudicate complaints. If Verizon says we can throttle your broadband, there's nothing I can do about it.

• 5:47Nilay Patel?

  But that's not a trade problem, right?

• 5:49Speaker 03

  It's not a trade problem.

• 5:50Nilay Patel?

  If you sell the thing you're advertising, there's no trade problem.

• 5:53Speaker 03

  Exactly. So what this shows was that the Fire Department had absolutely no recourse. And what I found really interesting about this was that while this was happening, and this was a cause celebre, right? I had a piece in NBC News and ABC covered it. Everybody covered it. This is one of these few times where one of our issues gets covered by the cable and broadcast networks. Neither the FCC nor the FTC said anything about it. Neither of them said, oh, if they had only filed, if the fire department had only filed a complaint with us, we would have done something about it. And I found that very, very telling. But that was a matter of, of, of life and property here.

• 6:38Speaker 03

  Okay, not just a matter of, you know, did you have to pay $10 more for a router or what have you? So that's number one. So the second instance of where the absence of net neutrality really, again, implicated public safety was when a number of mobile carriers, T-Mobile, Sprint, and AT&T, were found to have sold the precise geolocation data of their customers. They sold them to data brokers who then sold them to bounty hunters. So these are people that, you know, try to find estranged girlfriends, kids, or what have you.

• 7:21Speaker 03

  Again, this was another situation where, first of all, I think very importantly, you know, the FCC had privacy rules that we adopted in 2016 that would have likely prevented this from happening, because you would have had to opt in to the collection of this data. But once again, consumers had nowhere to turn. And allegedly, the FCC has been investigating this issue for a year and a half and has done nothing about it. So this is both, in my opinion, a privacy issue, but also, again, an oversight issue.

• 7:57Nilay Patel?

  And this is one where, you know, we had Commissioner Jeffrey Starks on the show, and there's a little bit of controversy about, you know, Ajay Poi going in front of Congress and saying, oh, I handed that investigation off to Commissioner Starks. And Starks saying, wait, that, that's not how this works. And so it seems like they're not, not only are they not doing anything... What they claim to be doing doesn't even, doesn't even purport with what the commissioners are saying is happening.

• 8:19Speaker 03

  I have to say that even I'm surprised at how Trumpian this FCC is. I mean, trying to blame Democrats for, for things that are really their responsibility, forming memberships of, of advisory committees which were always bipartisan and always balanced interests, you know, into complete lapdog tools of the FCC, doing things frankly in a very sloppy legal and policy way just to be results driven. I thought if, if there was going to be one thing that Ajit Pai would do well because he's so proud of the fact that he's a good administrative lawyer, was that he would cross

• 9:00Speaker 03

  his Ts and dot his Is when it came to the legal justification for a lot of what he does. But indeed, that actually hasn't been the case. They've been so eager to get stuff out of the box that they've been sloppy. And, you know, we'll see if I'm right yet again when the, when the net neutrality court decision comes out, which will be any day now. Every Tuesday and every Friday when the DC Circuit issues its decisions, all of us are on tenterhooks, uh, waiting to see what happens.

• 9:30Nilay Patel?

  Wait, I just want to make sure everybody in the, in the audience understands this. One of the reasons there hasn't been an internet apocalypse is there's a huge court case about the rules and the repeal of the rules that we're still awaiting the outcome of.

• 9:42Speaker 03

  Yes, but that's why you're not seeing, you know, extreme cases of blocking throttling and paid prioritization. But what you are seeing extreme cases of is the Federal Communications Commission saying, uh, you know, somebody sold your information to bounty hunters, too bad. You know, your fire department and your broadband's being throttled through a major fire, too bad. That's the extreme stuff we're seeing, okay? But that's not what people focus on. People are very focused on the throttling, the paid prioritization, and the blocking. And the ISPs are too smart. To engage in anything too drastic in those categories.

• 10:21Speaker 03

  But again, the FCC has been completely willing to continue to abdicate its responsibility and basically look away when it comes to, you know, things that consumers care deeply about. Like the third thing I'm going to talk about, which Nele you alluded to, which was the fact that there is a consumer that is a customer of Frontier Communications. They're mostly in rural areas, but also in California. Verizon sold all their lines to them in California. They're not a beloved company, I'll be very frank with you. A customer bought his own router for $200 and Frontier kept charging him $10 a month to rent it. So renting his router.

• 11:06Speaker 03

  So this customer complained to the FCC and the FCC told Frontier, well, you have to respond to this complaint. And Frontier basically said, eh, too bad. This is the charge we make and you're going to continue to pay it. And the FCC's response was, yeah, well, Frontier answered you, so buh-bye. So basically what the FCC was saying is, we're delegating our oversight of the broadband industry to the broadband industry. They answered you, so later, you know, we have more important things to do, like, you know, destroying Lifeline, which is the subsidy for poor people, and getting rid of media ownership regulations and making sure that kids can't even get three hours of children's television on broadcast.

• 11:49Speaker 03

  That's what I mean when I say they've abdicated their responsibility and their appeal of the 2015 Open Internet Order allowed them to do that. Those are the deep cuts I'm talking about and I, those are no joke.

• 12:02Nilay Patel?

  Yeah. I mean, the Frontier one, to me, that's a system they'd bought from Verizon. This is a great story on Ars Technic, everyone should go read it. But this is a system they had bought from Verizon. The customer had bought his own modem to use with the Verizon system. It worked fine. Verizon wasn't charging him the additional fee. Frontier bought the system, started charging the fee for equipment. He said, wait a minute, I've got my own equipment. And they said, no, this is a fee we charge everybody to maintain the equipment. And then, which is... Absolutely absurd. And so the problem here, the heart of it to me is because it's a small system, there's no competition. So he couldn't even go anywhere else, right? There's no market remedy where you can switch to a different provider, which is the whole reason everybody

• 12:47Nilay Patel?

  wants net neutrality rules is just recognition that there's not a great market to operate in for consumers to make choices in. The FCC saying, well, they're doing what they say they're going to do. So that's fine. They responded to you. And then if you want to push that off to the Federal Trade Commission, the problem is that they're disclosing the charge.

• 13:07Speaker 03

  Yeah.

• 13:08Nilay Patel?

  But so there's no, there's no trade problem because they're just saying this is the charge.

• 13:11Speaker 03

  All right. They're, they're being completely frank. And again, you've, you've set out that is the limits of what the FTC can do. So when the, when the FCC repealed that neutrality, they said, well, the FTC can take care of it. But the fact of the matter is, if your internet service provider tells you it's blocking, throttling, or engaging in paid prioritization, there's nothing you can do about it if they do. Now, if, if they omit that or lie to you about it, that's a different story. But I, I still think even if you could bring that kind of complaint to the FTC, I think folks need to understand the limitations of the FTC's expertise. I gotta tell you a story. So about four months ago or so, I

• 13:54Speaker 03

  testified at an FTC hearing on broadband competition. And the FTC has been doing, I think they've done about a dozen or even more of hearings about competition in the digital sector. And I was asked, basically, well, how should the FTC determine whether an internet service provider is engaged in discrimination? And I, who, as many of your listeners know, actually worked at the FCC and worked on the 2015 net neutrality rules, was like, what? Well, are we really asking these incredibly basic questions about how you determine whether discrimination is happening? I mean, the FCC...

• 14:35Speaker 03

  Solve that years ago. So I got the feeling that somehow the FTC was trying to figure out how it could become the FCC. And it's not suited. It's not suited, A, because it doesn't have the technological expertise. Indeed, they do not have a chief technology officer. And number one, they don't have rules. They don't have rulemaking power. All they can do is enforce their law after a complaint is made. And just because of that, it's like playing a game of whack-a-mole. They can't address every complaint. And right now, it doesn't seem that they're addressing any complaints in this field. So the FTC is a legal enforcer of general applicability across the industry.

• 15:20Speaker 03

  The only things they don't regulate are banks and telephones. That's it. Okay, so they regulate everybody. So net neutrality cases are just going to be one of many thousands that they get on a variety of issues. And as you mentioned before, it's only going to be about deception. It's not going to be about whether the ISP should be engaging in that conduct at all.

• 15:43Nilay Patel?

  Just to play devil's advocate here. If that's the bar, and then all the ISPs, you know, start advertising these outrageous fees, you know, they do the amount of transparency they need to to clear the bar of FTC enforcement. Does that help anybody? All right, you could make the argument, okay, consumers are going to, they're going to know about these fees, they're going to write angry letters to, I don't know, their congresspeople, they're, they're going to tip the verge. You know, I'm going to make, I'm going to make Russell and Addy and McKenna write story after story about outrageous fees, and then something will happen. Does that seem like a real outcome to you?

• 16:15Speaker 03

  It could be eventually, but why should consumers have to wait? Uh, you know, and how many stories do you need? And, and, and let's remember how good a job our Congress does at actually passing anything controversial.

• 16:27Nilay Patel?

  I said I was playing devil's advocate.

• 16:29Speaker 03

  Yeah. I mean. No, because that's one of the excuses, right? Comcast say, well, if we did X, Y, or Z outrageous thing, people could A either go to somebody else, which we already know to be completely false. That, you know, most Americans don't have a choice of more than two, and sometimes they don't even have a choice of two. And even if you wanna switch, it's not that easy. There are lots of switching costs, including penalties for, you know, leaving your contract early and equipment changes and having to, you know, wait three days for your cable person to come. So, you know, e- even if you have a choice of two, it's just not that easy to make a change. And usually when there's just two in a market, they have the same prices anyway. So, y- y- there's really no competition to speak of.

• 17:13Speaker 03

  I don't think anybody other than Ajit Pai and his two Republican colleagues argue o- otherwise. The second thing they say is, well, people will make such a fuss that, you know, will be forced to stop doing it. Okay, i- i- is that really good enough? And it's certainly not good enough if you've already been harmed.

• 17:31Nilay Patel?

  Yeah.

• 17:32Speaker 03

  I gotta get back to the bounty hunters. There's been a huge hue and cry over that. In fact, I think they, I think it was a story tying one of these cheaply sold geolocation data. I think one was tied to a murder or murders in Dallas. So, don't quote me on that, but I'm almost positive of that. So, where is the outrage and where is the change in behavior? All we've heard is assurances from those three carriers that they, you know, are not collecting that information anymore. But you know what? They said this before this was revealed. They said they weren't collecting geolocation information. And the larger point is, who's making sure they don't? That's the bigger point. You really wanna take these companies at their word? I don't.

• 18:15Nilay Patel?

  Yeah, that's the argument they would make, though, is that we're incentivized because customers choose us, and there's so much churn, but you don't see it. I mean, the other argument they're making is, hey, look, speeds are going up, investment's going up, this is everything we said would happen.

• 18:29Speaker 03

  Yeah, so let's, let's talk about the i- investment nonsense. That is the biggest red herring and frankly, maybe one of the reasons the FCC loses. I always say that a fool will predict what happened in an oral argument. And I was at the oral argument, five hours, sitting next to my former boss, former FCC chairman, Tom Wheeler. And I, I will make a soft prediction that the people who sued the FCC to overturn the repeal will win. I don't know on what grounds, though. It just seemed, you know, based on those five hours there, that there was a lot of skepticism about some of the arguments that the FCC was making, and investment was one of them. So, so let's talk about investment, because this is my favorite one.

• 19:13Speaker 03

  Not long after the FCC repealed the 2015 Open Internet Order, Verizon, Charter, Comcast, and AT&T all announced that they would be investing less in their networks. Don't take this to say that I believe that, you know, the existence of net neutrality rules promoted more investment. The point is that it doesn't matter, okay? One way or another, Title II, Title I, net neutrality, not net neutrality, doesn't really impact on whether these companies are investing or not. It's the economic climate, it's level of competition, it's the invention of new technologies like 5G, which I'm sure we'll talk about. That's what determines whether they invest or not. It's not whether there's net neutrality or not.

• 19:58Speaker 03

  So that, that is such a nonsense argument, but it frankly was, it was really the basis of almost the entire decision is, oh, you know, the Title II was tamping down investment, blah, blah, blah, blah, blah. And seriously, you know, almost as soon as Pies Gavel came down on that vote, the ISP stopped investing, or they invested less.

• 20:20Nilay Patel?

  What's particularly funny to me right now is the argument that nothing bad has happened. And the argument that investment has gone up are actually in opposition with each other. Because the argument was Title II is holding back investment because they can't build these new kinds of business models on top of the network that justify increased investment. And now we're at a place where everyone's saying, "Look, nothing bad has happened," meaning no new business models have been introduced. There is no paid prioritization, which was one of the big business models the attendees wanted. There is no throttling of rival video services so that AT&T can stream Game of Thrones, which I'm sure they will do. It just hasn't really happened yet, right?

• 21:03Nilay Patel?

  So all of this new revenue doesn't exist, and everyone's saying, "Look, nothing bad happened." The new revenue schemes didn't exist. But they're also saying, "Oh, that was holding back investment." And those things, I cannot square those two arguments.

• 21:16Speaker 03

  I'm sure you're also seeing what's happening with regard to, you know, the internet service providers, cable companies, and their own content, right? So Verizon's whole oath experiment was a complete and total failure. AT&T is dying to sell off DirecTV, right? Which I think they bought DirecTV less for the sexy satellite, which is just a money pit, and more for things like, you know, the NFL exclusive and that sort of thing. And they're just, they're just dying to sell it. To whom they'll sell it is a great question, but, you know, I don't know what they're doing with Time Warner and HBO. All I know is that every good person, at HBO at least, is either left or is leaving.

• 21:58Speaker 03

  So, I mean, there's a reason we call them dumb pipes, is that that's what they do well, right? They don't necessarily do content well, they don't necessarily do over the top well. Now, they get very jealous when somebody else does, and that's a lot of what this neutrality fight is about, is, as you mentioned. But they're not that good at doing it themselves.

• 22:19Nilay Patel?

  So, let's talk about the court case for one minute, because we've referenced it a lot.

• 22:24Speaker 03

  Yep.

• 22:25Nilay Patel?

  I think one of the reasons, it's just a very rational, sort of cold, cynical business reason to wait out the court case if you are AT&T or Comcast or whatever. Oh, by the way, disclosure, Comcast is an investor in Vox Media, which is on the verge of the whole thing. They don't love me, but I disclose it every time. But if you're AT&T or Comcast or whatever, you're not going to light up some huge new revenue line like paid prioritization if there's a chance this court case could wipe it out because the rule change goes away. So I think that's like one major reason. It's not just we're afraid of, you know, public outcry if we do it. It's we can't tell our investors that we've lit up an entirely new line of business on paid prioritization if in a minute,

• 23:10Nilay Patel?

  on some Tuesday or Friday in the future, the DC Circuit's going to say, wait, this rule change wasn't correct. So tell me about the court case and sort of, you were saying you were at oral argument. What is the basis of the court case? How do you think, you know, the court is evaluating the arguments that were made?

• 23:24Speaker 03

  Well, there were a lot of arguments that were made. The biggest argument, although perhaps not the argument that the case will be decided on, was that the FCC disobeyed the Communications Act or misread the Communications Act when it reclassified broadband internet access as an information service. Okay, because first time, not only of any FCC, but also of any court, said that broadband internet access has absolutely no telecommunications component. Right? So let me just, let me just step back a second because this gets really weedy and really legalistic very quickly. Under the Communications Act, if you are

• 24:07Speaker 03

  a communications network like a telephone, like broadband operator, and then let's set aside cable and broadcasting because they have their own sections of the Communications Act, right? You can either be a telecommunications service, that's what telephones are, that's what actually mobile telephones still are, okay? Or you can be an information service, which is much more lightly regulated. So telecommunications services are regulated under Title II of the Communications Act. They're more heavily regulated. I wouldn't say they're heavily regulated, but they're more heavily regulated than information service, which is under Title I of the Communications Act. So in 2015, what the Wheeler FCC did

• 24:50Speaker 03

  that was so significant was we said broadband internet access is, you know, it's a pipe, like a telephone service, and therefore it is a telecommunications service under Title II of the Communications Act. Well, Ajit Pai reversed that and said, no, no, no. It's an information service and therefore we will not regulate it at all, essentially. The problem is, the way the FCC argued why broadband internet access was an information service and not a telecommunications service was unlike any argument that any court or any FCC had made before.

• 25:28Speaker 03

  It said, "There is absolutely no, essentially, on-ramp system that's part of broadband." So that, that's the first argument, is that the way that the FCC reclassified broadband internet access just, i- is contrary to the plain language of the Communications Act of 1934. The other arguments included, well, the FCC should have considered the impact on public safety, getting back to the throttling issue, right? And in fact, the throttling issue was raised in the briefs in the net neutrality case. The FCC has a duty to consider the impact of its decisions on public safety, and it

• 26:11Speaker 03

  did not do so here, which is absolute truth, that's just a fact. At least two of the judges seemed very, very concerned about that. The third argument had to do with the one rule the FCC kept, sort of, when it repealed the 2015 net neutrality rules. And that was a transparency rule. So in other words, that was a rule that said that internet service providers had to tell you how they were managing their networks, whether they were engaging in throttling, paid prioritization, blocking, so on and so forth. And the argument from the petitioners, right, the people challenging the FCC, said, "The

• 26:52Speaker 03

  FCC didn't cite the proper legal authority for adopting such a transparency rule." That's somewhat ironic, right? Given that, given that the FCC got rid of Title II authority, they had to find authority, legal authority, somewhere else in the Communications Act to support their transparency rule. And they cited a provision that frankly was just absurd, that had to do with the FCC turning out an annual report on how its rules affect small businesses. This is Section 257 of the Communications Act. That was their cited authority. And I will say, all three judges were extraordinarily dubious. That section two fifty seven was an adequate use of legal authority.

• 27:36Speaker 03

  Even the conservative judge, Stephen Williams, who hates net neutrality, he's been involved in a number of net neutrality cases. Was just like, no, this just doesn't work. And we argued that if the transparency rule goes away. Then the whole repeal falls of its weight. Because let me just remind folks. What Pies said was, it's okay, broadband providers will tell you. Whether they're blocking, throttling, or engaging paid prioritization. If they don't, then you can go to the FTC. Well, if you don't have a transparency rule. Then how will you know whether you have the right to go to the FTC or not? So there's a chance that the whole thing falls of its weight.

• 28:18Speaker 03

  Based on the legal authority the FCC cited to support its lame transparency rule. Those are the three major arguments. There's another argument that the court didn't, because this thing was going so long. Didn't hear a lot of, although it's critically important. Is whether the states can pass their own net neutrality laws.

• 28:39Nilay Patel?

  Because there's been a rash of states passing their own net neutrality laws.

• 28:42Speaker 03

  There are different varieties. California, not surprisingly, is the strongest one. Maine just passed one recently. Vermont has one. There's a whole bunch of, Montana has one. And they vary. I mean, some of them, like California, are the whole kit and caboodle. You know, even addressing things like data caps. And then there are others like Vermont, which just say, look. The state shall not contract with any broadband provider that doesn't obey the net neutrality rule. So there's a whole variety of them. But yes, they were introduced the year after the rules were repealed. They were introduced in thirty four different states. And I think about a dozen or sixteen or so states have them.

• 29:27Speaker 03

  But New York's considering a very strong California-like one. And there are other states considering them. So, yeah. As in many places, in many issues in our government right now, when the federal government is sitting down, the states are standing up. So there's a whole question about whether the FCC, as it did here, could say, no, I'm sorry, the state cannot legislate net neutrality.

• 29:53Nilay Patel?

  That was one of Pi's rules, just to be clear for the audience. The repeal net neutrality, he said, but I'm keeping this transparency thing under some confusing legal foundation. And I'm passing another rule, a dubious, dubious legal foundation. And I'm passing another rule that says that the FCC prohibits states from doing net neutrality of their own accord. Which seems, again, the sort of just philosophical inconsistency is striking, right? We're gonna let these markets develop however they want, but we're gonna make sure we step in and tell the states what to do.

• 30:29Speaker 03

  Yeah.

• 30:30Nilay Patel?

  Seems odd to me, but so it goes.

• 30:32Speaker 03

  Well, you know, it's interesting to see the party of states' rights preempt the states, and you know, Pi and his colleagues did it again with 5G antennas, right? Went and told the states and localities, you have to abide by our rules on permitting and allowing these antennas to be put up regardless of whether locality thinks it's good or bad for its community. Look, when it's in service of making sure that the big broadband providers get what they want, it doesn't matter whose neck a sheet Pi steps on.

• 31:06Nilay Patel?

  We gotta take a quick break for an ad. We'll be right back.

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• 32:13Nilay Patel?

  All right, we're back with Gigi Stone.

• 32:17Nilay Patel?

  So let's talk about big broadband providers for one second. You've been talking a lot about Sprint, T-Mobile. There was a story in the New York Post today about the FTC, the FCC. There's a lot of argument about this merger, this proposed merger. One of the ideas is, okay, we'll let you merge, but you have to give up enough spectrum so that there remains a fourth competitor in the market, which is incredible. That competitor, often people refer to Dish Network, right? Where they're going to give some spectrum to Dish Network. Dish Network will somehow become a mobile broadband carrier and then it will still have four, everything will be great. The report today in the Post was, Google might get involved in this and Google and Dish Network will somehow partner up and form a fourth carrier.

• 33:02Nilay Patel?

  That was, by the way, Google denied it very flatly in the Post.

• 33:06Speaker 03

  Yes.

• 33:06Nilay Patel?

  Report, it's out there, right? There's rumors of every other tech company getting in this game too, because that's what happens at this moment in time. What is going on with T-Mobile and Sprint? Is it going to happen? Is it, is the idea that Dish Network turns into a fourth major carrier a good one? How should people think about it?

• 33:25Speaker 03

  Look, I think this whole thing is ridiculous. Just to let your listeners know, a bunch of states attorneys general, 13 states attorneys general, plus the District of Columbia attorneys general have already sued to block the merger. And a lot of us thought that the Department of Justice would do the same. I think this has got to be coming, it's come, I think that there is pressure on the Assistant Attorney General for antitrust, a guy named Macon Del Rahim, who I actually respect a great deal. But I think there are some people, not particularly high up in the White House, I don't think President Trump gives a darn about this. But I think people like, you know, National Economic Council Advisor Larry Kudlow and others

• 34:05Speaker 03

  want to see this go through, under the idea that it will somehow, you know, speed the transition to 5G, which is a bunch of nonsense. Also Chairman Pai sort of put his foot

• 34:18Nilay Patel?

  Yeah.

• 34:19Speaker 03

  on Del Rahim's neck by saying now, I think we're over a month ago, putting out a statement saying, I think we should, I think we should let this merger go through, again, in the service of, of making the transition to 5G more rapid. So I think Del Rahim is feeling pressure. Uh, now he has said there's got to be four, which now puts him in a bind. So he's trying to create four. Uh, I, I think this is like a Frankenstein monster. I mean, you know, one week it's Amazon's going to save the day. Now it's Google that's going to save the day. I don't see, I am profoundly skeptical

• 34:58Speaker 03

  that the DOJ can create a fourth, a viable fourth competitor. Let's talk about viable. Okay, somebody who can compete like now, all right, or in the next couple of months. And I don't know how you do that without giving Dish Network 30 million customers. And T-Mobile isn't going to do that, right? And I think this is what's really important, is you have to not only have a willing buyer, which is Dish. And Dish has other issues, why, you know, this would get them out of a lot of trouble at the FCC, because the FCC is forcing them to build out the spectrum they already have, and they have a lot of it, by middle of next year.

• 35:40Speaker 03

  Okay, so they're trying to get, you know, they're trying to get that time extended and get some assets. But if they start off with zero customers, how are they, or is that, it wouldn't be zero, because they would buy Boost Network, right? So Boost Network is one of the, a prepaid carrier.

• 35:57Nilay Patel?

  Yeah.

• 35:58Speaker 03

  So in other words, low income people, they pay in advance on a monthly basis, okay? So they get five to eight million prepaid customers and have to compete with three other companies that have Close to 100 million or more? That's not a viable campaign. So I just, it just shocks me that a Republican administration would engage in this kind of industrial policy engineering and try to create this Frankenstein monster of a fourth carrier.

• 36:26Nilay Patel?

  Yeah, I don't think, I mean, you talk about the government picking winners and losers.

• 36:30Speaker 03

  It's crazy. Can I, I gotta tell you another story and hopefully, uh, the person I'm talking about, I'm not gonna name his name, is a person pretty high up in, in one of the executive branch offices. And I said to him, he used to be a real competition guy, and I said to him, you know, we started talking about the merger, and he was just like, "It doesn't matter, you know, four or three, as, as long as we get the technology done and we get the 5G networks built." I said, "Well, then why don't we just have one nationalized network?" And he just smiled at me.

• 37:00Nilay Patel?

  Yep.

• 37:00Speaker 03

  Because he would love that.

• 37:02Nilay Patel?

  It is funny how often the Trump administration proposing a nationalized 5G network comes up. It comes, it comes up shockingly often. It seems if Obama had proposed a nationalized 5G network, like Fox News would have just imploded.

• 37:17Speaker 03

  Exactly.

• 37:18Nilay Patel?

  It's just very confusing. So, I mean, I ask this question, everybody. Uh, I'm still waiting on an answer. Uh, why is 5G a race? Is it a race? It doesn't seem like a race. Why is it a race?

• 37:31Speaker 03

  It's only a race in words because the big mobile operators and their trade association want more deregulation, want mergers like Sprint, T-Mobile, and want more money. It's a pretext for more deregulation, for bad mergers, for bad trade policy, quite honestly. So, my former boss, former FCC Chairman Tom Wheeler, is gonna have a paper out this week that is gonna debunk a lot of the 5G hype. And basically, the bottom line is... Building 5G networks is a marathon, it's not a sprint. Alright, there's, there's no race here, and if it's a race, it's a real long drawn out one.

• 38:16Speaker 03

  And not one that is gonna happen overnight, and not, and not one frankly, that is going to, you know, fill the gaps that we have today in 4G. So, you know, rural people are not gonna benefit, because it's extremely expensive to build out these networks, and you have to put antennas very close to each other, and who's gonna do that in a rural area? So, you know, it's not coming to rural areas, it's, it's gonna be, at least at the very beginning, a very expensive technology, so poor people will also be left out. You know, it's not some magic solve that's gonna, you know, save all of our broadband problems. And quite honestly, we'd probably do much better off investing

• 38:59Speaker 03

  in fiber infrastructure than, and, and which by the way, we have to invest in that anyway, in order to get 5G. But making sure everybody has fiber to the home, rather than spending all this time, energy, and public resources on 5G. I'm not saying there should be no 5G. I'm just saying we shouldn't be making foolish policy decisions based on a so-called race to 5G.

• 39:23Nilay Patel?

  No one can articulate, to me, the negative outcome of coming in second. Which I think is important, if you're saying it's a race, like, okay, well, what bad thing happens if we come in second? And the best answer I've gotten is, well, if we come in second, we won't be in control of, of the global 5G standards. Which, maybe, but like, Qualcomm exists. They're not gonna stop trying. Uh, Apple, Apple sells a lot of phones, I think they have a lot to say about global 5G standards.

• 39:53Speaker 03

  Um, yeah.

• 39:54Nilay Patel?

  So, and also, you know, in this country, for years, we had networks that had nothing to do with global standards. It's not like Verizon did poorly when they were on CDMA and the rest of the world was on GSM. So, that's the best answer I've gotten, I'm putting out there, you know, the listeners can think about it on their own time, but I think it's a little, a little bit silly.

• 40:13Speaker 03

  Global, global standards get made in global standards bodies.

• 40:16Nilay Patel?

  Yeah.

• 40:17Speaker 03

  And you're right, companies like Qualcomm have an awful lot of power.

• 40:20Nilay Patel?

  And they have all the patents, I mean, that's the main thing.

• 40:24Speaker 03

  Power, patents, same thing.

• 40:26Nilay Patel?

  What happens next in the net neutrality fight? Obviously, we're waiting on a court decision, but what are the next big things that you see coming down the pike?

• 40:31Speaker 03

  I think legislation is the next big thing, regardless of what happens in the court. As I said before, I think we are going to be victorious, but even if we win, I think we need to have legislation that puts back in place the 2015 Open Internet Order, and let's just end the discussion right there and move on. So restores the FCC's authority, oversight over broadband, and restores the 2015 net neutrality rules. And I think if and when we win in court, I'm hoping the broadband providers will be more attuned to actually getting something done on Capitol Hill, because they're the ones that are holding it up right now. We got a, we got a bill passed in the House, we're just waiting on the Senate, and I need

• 41:15Speaker 03

  the companies to tell Mitch McConnell to bring that bill to the floor.

• 41:19Nilay Patel?

  All right, well, Gigi, it's wonderful that you're on the show. I cannot believe we haven't had you on sooner. It's been an amazing conversation. One of these Tuesdays or Fridays, there's going to be a court decision. We're going to have to have you right back.

• 41:28Speaker 03

  Please do. When the decision comes out, be happy to talk to you again.

• 41:31Nilay Patel?

  Awesome. Gigi Sun, thank you so much. We'll talk to you soon.

• 41:33Speaker 03

  Okay, take care. Bye bye.

• 41:36Nilay Patel?

  All right. My thanks to Gigi Sun for coming on. We've, she and I have been talking for so long, it's shocking to me that she hasn't been on the show before. We're going to have to have her back. That was great. If you haven't listened to Why Did You Push That Button Yet?, check it out. There's a new episode this week about auto replies on email. Are you one of those people that uses the AI feature in email for quick responses? Are you one of those people who hate it when people do the obvious auto reply? Well, they dive into it. Caitlin and Ashley on auto reply, you just listen to it. It's hilarious. It comes out on Wednesday. Subscribe to The Verchass for free on your favorite podcast app if you haven't already. Rate us and review us on Apple Podcasts, because it's a monopoly. They tell me to do it. Let me know on Twitter, I'm at Reckless, what you want to hear from the interview episode. We'll be back on Friday with a chat show, back on Tuesday with the interview show. We're going to keep going. See you soon.

• 42:31Speaker 05

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