Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

AuthorFurchtgott-Roth, Harold
PositionBook review

TABLE OF CONTENTS I. THE TRIUMPH OF PERSONALITIES OVER LAW II. SKIP THE ECONOMIC ANALYSIS III. SKIP THE INTERNATIONAL COMPARISONS IV. SKIP THE HYPERBOLE ABOUT THE IMPORTANCE OF COMCAST V. THE ANTITRUST CASE THAT WASN'T VI. EXAMINING THE CULT OF WASHINGTON PERSONALITIES VII. THE LOSING CASE FOR GOVERNMENT OWNERSHIP VIII. WHO IS THE CAPTIVE AUDIENCE? Visit an academic conference where Professor Susan Crawford is presenting a paper, and you are sure to find a large crowd and a good story in the room where she is speaking. In the world of academic telecommunications policy, Crawford would appear to be a rock star with a loyal cadre of groupies. Yet as an accomplished classical violist, Crawford does not evoke an image of Led Zeppelin and acid; lead crystal and claret seem more appropriate.

Crawford has her detractors. She is an unapologetic champion of having big government, rather than corporations, solve big problems. She is well-known, but not well-liked, in corporate America. The feeling is probably mutual.

Crawford has something that few in academic telecommunications policy can match: experience at the highest levels of government. (1) And now she has something that many in her academic audience actually can match: a book. Better than many of the books written by those in her audience, Crawford's book is published by Yale University Press and curiously titled Captive Audience. Just who is in this audience, and why are they captive? The subtitle, "The Telecom Industry and Monopoly Power in the New Gilded Age," is inapposite. A few strands of fiber are pictured on the cover of the book, but nowhere is there a clear image of the elusive captive audience that she references.

Before exploring the book in search of the captive audience, let's learn a little more about Crawford. The American public owes Crawford a debt of gratitude. From 2005-2008, she served on the board of the Internet Corporation for Assigned Names and Numbers ("ICANN"). ICANN serves as a minimalist form of governance for the Internet. (2) It may appear innocuous and unimportant, but looks are deceiving. Many who seek to destroy the Internet and weaken America have their eyes set on first eliminating ICANN. (3) If one defines a friend as the enemy of our enemies, America has few greater friends than ICANN, and by extension, its board.

Crawford also worked on President Obama's Federal Communications Commission ("FCC") transition team and then served as a Special Assistant for Science, Technology, and Innovation Policy in 2009. (4) To have supported President Obama in 2008 is not unusual in academia. To have actually served in the White House is.

I once attended a meeting with a small group in a conference room in the Old Executive Office Building. When Crawford entered the ornately decorated room, she remarked something to the effect of: "This room belongs to the American people. Enjoy it. We are all here as visitors." Jimmy Stewart could not have said it better. Unforced and unaffected, humble, and spoken without the slightest hint of sarcasm, these were not the words of a Washington insider. The usual message is both unspoken and unambiguous: "This room belongs to me, and you had better do what I say."

As it turns out, Crawford was indeed a visitor, not a Washington insider; she left the White House to return to academia in early 2010. (5) This is just when the storyline of Captive Audience begins.

There is an old adage in academia that once you leave, you can never return. Academia is filled with those who have never left, who have never seen the vistas about which they write and teach, who cannot imagine the nether world in which mere mortals live and breathe.

Crawford is an exception to that rule. She was a partner at a major law firm before deciding to try academic life. She left academia briefly to witness the highest levels of government. Returning to academia must be painful, not so much relearning the precision and rigors of academic life as reimagining an idealism that cannot long survive elsewhere. Before writing Captive Audience, Crawford had to relearn that idealism a second time.

  1. THE TRIUMPH OF PERSONALITIES OVER LAW

    Having scaled the ivory tower, Crawford has now written a book about government from an insider's perspective, or at least an academic's perception of an insider's view. This is something that is certainly not the norm for an academic book. Crawford's book is also not the standard fare of recent government employees. Written in the first person, those works often have a "kiss-and-tell" familiarity with events framed in one of a few predictable story lines. For those looking for an even better government job, there is the "I-worked-for-the-best-Administration-ever-and-please-hire-me-again" story line. Or for those looking for a private sector job, there is the "Here-is-why-I-am-important" story line. Or for those ready to retire, there is the "Here's-my-legacy" story line. Or for those with a policy axe to grind, there is the "Here's-how-to-save-the-world" story line. Or for the occasional bad experience, there is the "You-won't-believe-how-bad-it-was" story line.

    Crawford, however, writes a different story. She does not write in the first person about her government experiences, although that might be a worthwhile story. Ostensibly, the book is about the Comcast-NBC Universal merger and the government approval process. Crawford clearly did not like the approval of the merger. (6) Some readers, myself included, were pleased with the outcome of the Comcast-NBC Universal merger. We viewed it as the inevitable outcome of law and economics. Crawford sees the outcome of the merger as resulting from different forces.

    Captive Audience is about more than the failure of the federal government in one instance to block a merger. (7) It is not a mere fisherman's tale about the big one that got away. No, the book has a much bigger theme: the federal government did not do its job. (8) It is difficult not to be troubled by Crawford's story where larger-than-life personalities overshadow the details of law in Washington. Although Crawford does discuss laws and her interpretation of how government processes should work, she never lapses into a diatribe about the lawlessness of the unfolding story. Crawford is careful not to demonize any of the giant characters that populate her book. She even praises them with human qualities, strengths and weaknesses. (9) They are not individually evil. They are just doing their job. According to her, the result, in Washington, is the triumph of personality over law.

    This is a disturbing observation, particularly for those of us who toil with the cold facts of economics and law. One is left almost to wonder: why bother with economics and law if decisions are made based on other factors? I can only imagine the shock of those in academia whose idealism about government and government processes must be shattered by the insights of Crawford. She does not extrapolate beyond this one example, but the reader is hard pressed to infer that Crawford's view of the failure of the federal government in Comcast-NBC Universal is a one-time aberration. (10)

    Crawford writes primarily in the third person about events that take place after she has left government. No doubt, her government experience informs her work, but she generally refrains from focusing on it. She reviews the history of the merger of Comcast and NBC-Universal, not with the perspective of an academic, but almost with the view of a journalist. To emphasize points, she frequently quotes important people in industry and government.

    I was initially annoyed by the frequency of quotes, a journalistic style, in an academic book. Yet perhaps there is good reason. It might sound a little too cynical and fantastic for Crawford, the academic, to say in the first person that Washington is run by personalities with too much influence. But when John Malone and other large personalities say there is influence--albeit rather like Charlie McCarthy sitting beside the ventriloquist Susan Crawford--it sounds less like the rant of an academic and more like the clever observation of a successful businessman.

    Ultimately, the reader finds Crawford, an unapologetic champion of bigger government, giving the eulogy for a government process gone wrong. Captive Audience focuses on the merger of Comcast and NBC-Universal, and implicitly condemns the Obama Administration for failing to block it. The Camelot of the Obama White House in January 2009 must have become something less exalted a year later. The administration, which she had worked very hard to support, would, after she left, do nothing to block the largest media merger in history. Anyone who shared her political idealism must have been crushed.

  2. SKIP THE ECONOMIC ANALYSIS

    There is much to like in Captive Audience, and I will return to its strengths later. There are, however, glaring weaknesses. These parts of the book should be read quickly, or not at all. Crawford is gifted at storytelling and sketching characters, but her many strengths leave little room to be a skillful economist. Indeed, she makes no pretenses about being one.

    Practically all of her economic analysis is at best informal, and more likely wrong. I will give just a few examples. Those seeking a more complete catalog of Crawford's economic misstatements might look elsewhere. (11)

    Crawford uses economic terms casually. If the casual usage were approximately correct, I would not quibble, but her form of casual usage is often exactly wrong. Consider the word "monopoly." Crawford frequently states that Comcast is a "monopoly," (12) a powerful word with a clear meaning to economists: a single supplier in a market. Yet in practically every instance in which she uses the word "monopoly," Crawford mentions one or two other competitors that she claims are weak. (13) With the exception of rural markets, she never describes a market in which...

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