April 2, 2013 11:54 AM

Captive Audience: A Fairer Review than Most You've Seen

A lot of people have written "reviews" of Susan Crawford's Captive Audience, or, at least, pretended to on Amazon.  But did they really read the whole book?  I kind of doubt it.    Just check the Amazon reviews for this book--nothing but 4 and 5 stars and 1 and 2 stars (i.e., just "homers" and "haters").

If I had to offer an explanation for the polarity of reviews, I would say it's because this book is really two books.  One, the first 232 pages, is a well-done history of competition law/regulatory policy and a generally well-done attempt to give this history a modern context, using the 2010 merger of Comcast and NBC Universal.  You may not agree with Ms. Crawford, but she does offer plenty to think about.

The "other" Captive Audience, couldn't be more different, and shows especially poorly when contrasted with the scholarship that went into the bulk of the book.  The last 2 chapters are only 37-38 pages total.  Thirty pages were supposed to explain and analyze the wireless industry (technology, structure, and competition), the proposed AT&T/T-Mobile transaction, and municipal/government funded retail broadband, plus muni-funded "middle mile" wholesale transmission.  

The remaining 7-8 pages are a spaghetti-style approach to a conclusion. The author offers up several unexplained policy prescriptions based on her casual observations about the "non-cable" parts of the Internet and hopes something will stick.  In the interests of being a charitable critic, I'm going to ignore these last 2 chapters--if they weren't worth the author's time, they aren't worth ours.   


Overall: 3 stars (out of 5)


This book, or at least the first 86% of it, does a very thorough--and, at times, entertaining--job of explaining potential causes for concern resulting from a dominant provider of broadband distribution also owning at least some "must have" content.  The exercise is not merely theoretical, as Ms. Crawford contends that Comcast is the dominant provider of residential broadband service throughout its service territory.  A position that, she argues, will only be exacerbated and extended as the likely consequence of the combination of Comcast and NBC Universal, which was approved by the FCC in 2010 with paper weight conditions.
 
The two major concerns for consumers--and for society--Ms. Crawford explains, are that 1) ownership of content may raise the already-formidable barriers to entry in the broadband Internet access market--further cementing the incumbent's market power over the broadband "pipe" to the Internet, and 2) content ownership--particularly of "must have" programming, such as live local and national sporting events--will allow the integrated firm to frustrate rival content owners (by withholding access to the broadband firm's content, and (at least constructively) raising the cost to consumers of subscribing to a rival content owner.

The easiest way to avoid these potential problems, Ms. Crawford argues, is to separate broadband distribution (provision of Internet access service) from content ownership.  If Captive Audience has a consistent theme, this is it--structural separation of distribution and content.  All in all, Ms. Crawford does a good job in providing the historical context of the antitrust laws, generally, as well as the regulatory history of this particular policy prescription as it would apply to the cable/broadband industry.

Conflicted About Regulation?

It is notable that, while Ms. Crawford is frequently portrayed as a champion of regulation, her narrative of government behavior virtually throughout the existence of the cable industry, reflects frequent--if not consistent--disappointment with every level of government oversight.  Specialized regulatory agencies, like the ICC and the FCC, are subject to even greater criticism.  At times, it seems like the author is frustrated to the point of questioning whether effective regulation is even possible; hence, her "structural separation" solution. 

Other times, Ms. Crawford simply makes excuses for her disappointment with the actions of the government.  For example, when discussing the Antitrust Division's decision not to challenge the Comcast/NBCU merger, Ms. Crawford blames the Division's reticence on "conservative federal judges" who are regarded as unsympathetic to vertical merger theories. 

Is it really acceptable for the Department of Justice to surrender its role as the enforcer of the antitrust laws just because the judiciary is skeptical of vertical theories of harm?  If someone in the Division made this excuse--for not challenging a merger the Division honestly thought would harm the public--that person does not deserve to hold the public trust.  Why doesn't the author express anything other than resigned disappointment?  If, the public needs protection from Comcast--which Ms. Crawford seems to believe--then doesn't the public need faithful, courageous law enforcement as well?


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I don't agree 100% with Ms. Crawford's analysis and conclusions, but you don't need to in order to get something out of this book, because the careful, and thorough, "prosecution" of the "Comcast case" will give you plenty to think about.  While Captive Audience generally succeeds in making the author's points, it also suffers from the fact that the reader knows--from the beginning--that the author is in pursuit of a specific conclusion.  This awareness leaves the reader with the sense that a more complete discussion has been sacrificed for the sake of this conclusion.  Thus, this reader was left with the feeling that the most interesting questions are those that go unasked.  We'll look at some of these in an upcoming blog.
 

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