On the latest episode of Recode Media with Peter Kafka, Recode’s Peter Kafka spoke with Harvard Law School professor Susan Crawford about her new book, Fiber: The Coming Tech Revolution—and Why America Might Miss It.
On the podcast, Crawford explained why nationwide access to high-speed fiber internet — already standards in parts of Asia and Europe — is important for everything from the future of work to the successful deployment of 5G wireless networks. She also talked about why Google’s ambitious attempt to compete with the telecom giants, Google Fiber, is all but dead.
“They’re like Verizon, which did exactly the same thing, backed off from installing fiber,” Crawford said. “Their shareholders are impatient with the long-term capital needs involved in making sure that there’s great last-mile access in America.”
“Nobody builds a bridge assuming that they’re gonna make 20 percent a year on that investment,” she added. “These are long-term investments that pay off at a rate of, let’s say, 5 or 6 percent until the sun explodes. They’re great investments, but you would have to have a different profile as a company to be interested in that. And that’s not Google’s business.”
Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Susan.
Peter Kafka: This is Recode Media with Peter Kafka. That’s me. We are here at Vox Media headquarters in New York City. I’m talking with the great Susan Crawford. Hi, Susan.
Susan Crawford: Hey, Peter. Thanks for having me.
Thanks for coming. You are a Harvard Law professor, but I think of you as a smart person who explains the internet to me.
I think of myself as a technological humanist.
All right. That sounds less fun.
You’re the person who explains how the internet works and doesn’t work. Specifically, when I have questions about broadband and net neutrality, I go to you. I was just talking to you off the air. We did this in 2014, there was a net neutrality decision, and you should go Google Peter Kafka and Susan Crawford. You’ll hear a very, very coached explanation about net neutrality law. What works and what doesn’t. Today we’re here because you have a book.
It’s called Fiber: The Coming Tech Revolution and Why America Might Miss It. Just to set this up, we spend a lot of time on this podcast talking about Netflix and Apple and Google and the fight to get things to your living room. We don’t really spend much time about physically how that’s gonna happen. That’s your focus. How the bits get to your screens.
You’ve talked in the past about the dismal state of broadband in this country. This seems like it’s a sequel, right? Broadband is miserable, overpriced, controlled by a handful of companies. Same thing with fiber.
Americans at their best are never cynical. This is the next chapter in the story saying net neutrality is just a symptom, just a little tiny corner of a giant story for the country, which is that we have no plan to upgrade our actual connectivity to meet what is standard in many Asian countries. Increasingly in Japan. A lot of Northern Europe. And Americans just don’t know about it.
Today, yet another big story about Facebook on the front page of the paper. We’re all kids on a soccer field looking at the ball in one corner of the field, it’s Google and Facebook and Twitter. There is a huge undiscovered story that this book captures about the guys who are actually bringing those platforms to our living rooms and how much power they have and how many scrappy cities in America are taking their destiny into their own hands to make sure there’s great network connectivity.
What is the problem? Is the problem that people don’t have enough speed to deliver stuff to their house? They don’t have enough choices? That they have enough speed and choice now but they’re gonna need more in the future?
It’s actually a deeper, more cosmic problem than that. We’re paying rent essentially as a country to a handful of companies that are selling second-rate, extraordinarily expensive internet access.
The Comcasts, the Verizons, and AT&Ts.
It’s basically the cable companies. If you live, say, in Austin, you’ve got one choice of a cable operator, local cable monopoly, who’s gonna sell you internet access. And it’s extraordinarily expensive. It’s asymmetrical, meaning that you’re mostly downloading, not uploading.
This is actually dumbing down the entire country and our ability to compete on the international stage. That’s the issue.
I’m gonna play devil’s advocate. I’m sitting in my basement in Brooklyn. I have a nice TV, pretty cheap, I have Netflix, and I was able to watch a great Coen brothers movie. Streamed just fine. I have all the speed I need. I think I’m paying 60 bucks a month. I used to only have one choice, which annoyed me, but now I have two because Verizon showed up. Great.
You’re in an unusual situation.
I realize that I’m in a very small minority there, that I have a choice of multiple broadband things. Nothing really changed when Verizon showed up. I think my pricing got a little better. My speed got a little better. My life didn’t get any better. I’m able to stream the internet and I can watch TV on it. Why do I need more speed?
Well, you’re talking about a very cramped vision of what we use data for. Saying that I can download movies easily is a tiny part of the possibility of being able, say, to work from home in such a way that you feel present in the office. At a cost that doesn’t matter to you.
In China, people are paying $10 a month for much higher capacity — both upload and download — than you have. That is the result of their own industrial policy. We don’t have that kind of policy in this country. We don’t seem to have a path to get there at the moment.
What’s terrible about the story you’re telling is that you’re saying, “I think of the internet as something for entertainment.” Just another broadcast TV screen and not for going to the doctor, getting an education, working, developing a new business that no other country’s ever heard of. We won’t be able to do that unless we have this tremendous connectivity.
You spend a lot of time in your book talking about the story of electricity…
… coming to America. Why is that important for the story of fiber?
It’s an exact parallel. In let’s say the ’20s, a handful of companies controlled electricity in the United States. They were selling it only to businesses and to a few rich people in selected urban areas. That’s it.
Right. You didn’t get electricity to your house.
Unless you were a very rich person.
It was not considered to be a utility. It was a private product just like, I don’t know, a tuna fish sandwich. Where the tuna fish sandwich market was cornered by one company, you’d pay whatever they wanted to charge you. It wouldn’t necessarily be available in your house.
We are walking down that same path with internet access today. Although three-quarters of Americans from both parties view it as a utility, as something in which the government should be involved, it’s not necessarily present in all corners of the country, extremely expensive, and controlled by a few private companies. We haven’t yet gotten to the part of the story where the public gets really worried about this for the future of the country and essentially demands that we get our act together and make sure that this is actually provided on a utility basis and made available cheaply to everybody.
Right. It’s literally not… It’s incomprehensible to imagine fiber access being a public policy debate, someone running on this, someone actually getting votes because of this. Both because of just the state of politics specifically right now, there’s so much else going on. Also, it’s hard to imagine this being a motivating factor.
As you point out in the book, this is … FDR was talking about electricity. Lyndon Johnson made his name bringing electricity to the hill country of Texas. There was a time where politicians had real benefit in extending this. The other thing you point out in the book — and I’m just setting you up, right — was when electricity showed up people thought of it as a thing that a light bulb does.
They didn’t think about refrigeration and all the gizmos and all the things. They couldn’t comprehend it. When you have a dummy like me saying, “My internet works just fine because I can watch a Coen brothers movie on Netflix.” You’re saying, “If you had more stuff, more stuff will come.”
Exactly. That parallel is so precise, it’s almost painful. It’s so easy that my grandmother would’ve called her electricity bill “the light bill.” Many people used it just for a single light bulb hanging in their house. There weren’t the appliances around yet in common use that created demand for very high capacity and inexpensive electricity. We’re right there right now, that other than downloading movies, our imagination is so limited.
The book imagines this future of human presence, particularly eye contact. You and I right now could look each other in the eye. You can’t do that over current internet connections in the United States in a way that is satisfying.
Here at Vox Media we have very nice equipment. But we did a conference call yesterday, people were dropping in and out. It’s better than not seeing them, but it’s not like being in the same room with them.
Exactly. If we could be in the same room, think about the effects of that on our energy use. On the ability of people to work where they live rather than having to live where they work. New forms of making money on new industries, in fact, are going to emerge once we figure this problem out. Right now, we’re not at that stage.
You’re laying out the benefit to fiber. Again, I’m gonna try to set you up here. Why isn’t fiber coming right now? What is preventing fiber from showing up at my house?
This didn’t happen by accident. Over the last 20 years, we’ve ignored this policy area and let the “free market” take its steps.
You put air quotes around free market.
Well, because it turns out for these kinds of businesses that involve very high upfront costs, they tend to natural monopoly. There’s no reason to have two wires to your house.
What we’ve ended up with is a few companies dividing the market, so Comcast takes city X and Spectrum takes city Y.
And even when Verizon and Comcast, at one point, were gonna fight and they spent a couple years on it, and basically made a peace treaty, essentially saying, “All right, we’re done.”
Right. They just divide up the market among themselves. So there really isn’t a competitive market for high-speed internet access in America. That’s the problem.
But there is high-speed internet access, and you can debate what “high speed” means and you can also debate what “access” means. Right? And you spent time talking about it in the book. There’s a good piece about this Times or Journal recently saying that there’s a community in rural Washington that supposedly has high-speed internet access, but it doesn’t really, it’s just measured as such.
But the point is, there is internet access, for the internet throughout America. And if fiber is objectively better and can lead to cool things, why wouldn’t the Comcasts and Verizons of the world spend money to bring that to us?
Because they have no need to, they are unconstrained by either … They’ve no incentive to because absent competition, because they divide the market. And absent any oversight, which is what’s happened. Up until 2004, we regulated the idea of a basic communications network. Every American had a phone connection at a very low price. And our phone network, when it was first introduced, was the envy of the world, covered the entire country.
Today, for high-speed internet access, we don’t take that approach. And so, they have no incentive to upgrade their second-class lines, and certainly no incentive to charge people less. Look, these companies aren’t evil, they are great American companies. But the unrestrained, private market, dealing with this kind of infrastructure question, is always going to end up soaking the rich for as much as they can, controlling markets, leaving out huge parts of the country, and not upgrading their facilities. They’ll milk them as long as possible.
Other countries have taken a very different approach. So, in the book, I spent a lot of time in Seoul and in Tokyo and Stockholm and other parts of the world, where they are amazed at the American situation. I’ve never been embarrassed to be an American other than on these trips.
The mayor of Stockholm took me aside and said, “Is there anything we can do to help you? Why are you so stuck? Why is it so backwards?” And in Seoul, they feel that coming to America is like taking a rural vacation because it’s so peaceful here. We’re hardly connected at all.
The internet’s not gonna bother you.
Yeah, you’d have no interruption, nothing happening.
You do have a line if you go to Seoul and you do an amazing sort of VR experience. And you’re talking about how wired Seoul is and you met many 20-somethings who did not distinguish between online life and real life. For them, these are simply layers of life as a whole. That doesn’t sound like a good thing.
You mentioned the Facebook story, the program yesterday, it’ll be several Facebook stories ago. But this is another data breach. They were releasing data they said they weren’t releasing. We’re in a world now where we’re really having a reckoning about what we want out of technology and the internet.
You’re taking it as a given that if we have more internet access, faster internet access, it’s inevitably gonna be a good thing. Is there anything that gives you pause about, it wouldn’t be the worst thing to slow stuff down right now?
All humans want to do is connect. Right? Now, terrorists do use telephones. There are negatives, there are burdens that come with this.
They use YouTube and Twitter.
But the benefit to human lives, to being able to connect to more people in a way that allows them to lead a thriving life. Really, the electricity parallel, I think, speaks to people. Can you imagine a world without adequate electricity? If you just had a light bulb in your house, you could say, “I’ve got electricity.” But you wouldn’t have refrigeration, you wouldn’t have the notion of …
And you may choose to go camping or go to your rural cabin, but it’s a choice you make.
But it’s a choice.
Exactly. And we don’t even have that choice in America right now.
What does it mean that Google, which has both the ability, capacity, and the self-interest to have fiber and high-speed internet access, said they were gonna do this, spent a bunch of money on it, and then after a couple years said, “This is too much work and it’s too complicated, we’re not gonna do it.”
Look, they’re like Verizon, which did exactly the same thing, backed off from installing fiber. Their shareholders are impatient with the long-term capital needs involved in making sure that there’s great last-mile access in America. Google had an interest in disrupting this story, making it more obvious to Americans that we’ve got a terrible problem with connectivity. But their shareholders were not interested in the relatively low returns involved in building infrastructure.
Nobody builds a bridge assuming that they’re gonna make 20 percent a year on that investment. These are long-term investments that pay off at a rate of, let’s say, 5 or 6 percent until the sun explodes. They’re great investments, but you would have to have a different profile as a company to be interested in that. And that’s not Google’s business.
It’s an extraordinary thought, right? Because Google is a money machine, right? They have an unchallenged dominance over internet advertising, even better than Facebook. If anyone could afford to do this, they could. And if anyone could tell Wall Street, “We are gonna do this and we’re gonna do it for 20 years and go pounce in.”
No private company has that freedom with Wall Street to say, “For this entire sector, we’re gonna do something that looks to you as if it’s unprofitable.” For America and for long-term policy, it’s anything but unprofitable. We are actually at a huge deficit because we’re not making this investment. And it will pay off, but in a different profile than these private companies are patient for.
Let’s talk a bit about what it would cost to bring fiber everywhere, and also how you actually do it. You go to Austin at one point and you watch them, they’re literally digging a ditch to lay cabling.
I want to be the John McFee of fiber.
It’s great. You’re going for pages and pages and you’re hanging out with these guys and I kind of wanted to watch it.
Good Netflix show. So you’d have to dig up ground, or you have to tunnel through, you have to … Stuff has to be put into the ground, right? This isn’t something you can solve with an app. It’s just guys, men and women, with machines, digging.
Right, 80 percent of the cost of putting in this great fiber last mile is the labor. These are great jobs, too, gotta say. And this kind of investment is one that requires political will and lowering the cost of capital, using government guarantees and loans in order to make that money available. But it’s not rocket science, it’s just money. And we spend money on a lot of things that would not be as beneficial as this one for the future.
I want to point out that this book is about a bunch of localities making this decision for themselves.
Right, there are pockets. There are individual cities and towns that have gone ahead and just put their own fiber in.
750 of them, around the country. And, by the way, mostly conservative places. This is a very deeply bipartisan issue. This is about making life better for everybody in your community. So, there are lots of places that have decided it’s worth it, it’s worth it just to borrow the money and have it pay off slowly.
So if this is about long-term planning and patience, which doesn’t necessarily fit the profile of either any one individual company, and often any one politician who has to show an immediate payoff, but, like FDR, who was making very long-term investments for the country, this one is absolutely worth it.
What would the bill be if we wanted to go ahead and get fiber everywhere?
The overall bill? I’m not sure. I’m not sure. And that is not what I’m intending to do.
Hundreds of billions?
Oh, no. Not… Hundreds of billions? I don’t think so. But what we’re seeing is that for localities, it is a tiny increment of what they end up spending on their overall bill.
So you lay out convincingly the many reasons we’re not getting this.
And a lot of them are economic, because we have this unfettered capitalism, right?
I’m assuming you’re gonna say that we need the equivalent of a jobs bill. Right? Or a WPA project, or some sort of federal legislation sort of spurring this.
What’s gonna happen here is the same story with electricity also. We start with localities and co-ops and agriculture, and then they gradually shame the federal government into doing something about it. And that could be an infrastructure bill, the kind of thing that the Trump administration’s talking about right now, could be a giant federal effort to say we’re gonna lower the cost of capital for building these last-mile networks across the country.
We’re gonna incent people to build this stuff with tax breaks or however else we’re gonna do it.
Right. And there are all kinds of ways to do it.
It’ll be a job creation bill that people have to follow the truck to put the thing in.
Exactly. There are all kinds of way to do it. It’s not even that complicated. It just requires political will, at this point. The problem for the country is that we do have something that feels like internet access to people around the country being sold to them at these very high prices by cable companies. Exactly the same thing, the electricity guys back in the ’30s, attacked any effort to say we need a public option or we need some oversight by saying this is Bolshevik and communist and Soviet. Those same arguments are coming out right now about the role of municipal efforts to something about the fiber story.
Whenever I see Verizon or AT&T executives talk, they are exclusively focused on the future of 5G networks.
Which seem to involve beaming the internet very quickly to my phone.
And, again, I’m sort of not convinced about why that’s a good thing, but they’re very excited about it. Doesn’t that solve this problem?
Well, glad you asked that, Peter, because, in fact, the book is about the complementary character of these great wired, fixed networks, fiber, and advanced wireless. The 5G connections that Verizon’s talking about, AT&T are too, will create tsunamis of data. And in order for that data to go anywhere there’s got to be a fiber optic connection quite close by. So, those 5G worlds will only emerge in urban areas and will only emerge where there’s fiber. So the two stories absolutely go together.
You can’t have real 5G without real fiber.
Exactly. It’s like saying, “All I need is an airplane. I don’t need an airport.” The airplane has to land somewhere.
So why isn’t Hans Vestberg, CEO of Verizon, saying, “Well here’s our plan to get fiber everywhere so we can have this 5G”?
Actually, they are building their own private fiber only connecting to their 5G plans in places like, say, Boston. They’re doing that. There’s a risk here that all we’re going to do is recapitulate the cable fixed monopoly for access. And they’re going to have so much power in 5G that no competition will emerge. And that’s a terrible story for America.
Look, the role of regulation is to unleash the private markets to have a playing field to play on. We don’t have that infrastructure in place right now. And we keep building these oligopolies that can charge us whatever they want for very small amounts of service. And that’s a risk with 5G as well.
So we talked about Google and their efforts just to do this and then they backed off. You would think, even if they’re not going to spend the billions of dollars, that the Googles and Facebooks and Netflixes would be out there sort of agitating for this.
You’d think. These guys don’t want to have people talking about … they don’t want to say, “Look at that monopoly over there.” Because they’re monopolies in their own playing fields. And so that’s why they’re not active here. They’re big enough …
They also don’t complain about net neutrality, because … and Reed Hastings said this onstage to me a couple years ago at the Code Conference. Because Netflix had been a big net neutrality proponent, and eventually said, “We’re big enough now. It’s not our fight.”
Right. This is all about power and leverage. And Comcast needs Netflix as much as Netflix needs Comcast. So they’re big enough that they can make a deal.
They’re in the club.
They’re in the club and they’ve pulled up the ladder behind them. America is a scrappy, entrepreneurial place. There are many other companies that could emerge, that would be given a playing field if we got this right.
There was something in my Twitter feed in the last week or so. It was actually a chart, we published it at Recode, saying that broadband’s fees have increased X percent in the last year. And a lot of the commentary was, “Ah, see?” This was supposed to go away post-net neutrality. But look, things are getting better. And everyone told us that the loss of net neutrality was going to lead to these terrible conditions. They haven’t materialized. Are we waiting for that shoe to drop, or are we misunderstanding the argument?
There’s a lot of bafflement and confusion in the telecommunications policy area. Net neutrality itself is just a worry about the power of one of these companies to slow traffic. We haven’t done anything about that power, and we haven’t actually done anything to cramp their business incentives, not to upgrade their networks and not to compete.
All the book is talking about is the requirement of basic neutral access. Like clean water, like energy markets. That’s the way we should be treating telecommunications.
The data we have on all of this, by the way, in the halls of the FCC, is decidedly third-rate. So when somebody says, “Well, speeds are getting better,” that’s likely based on data self-reported by the cable companies themselves. And is not very good as a basis for policy.
“I give myself an A on my report card.”
Exactly. And you just saw Microsoft coming up with a big report about two weeks ago, saying that in fact 162 million Americans don’t have …
That was the piece I was thinking of.
Yeah. It’s a very powerful piece of research. They don’t have adequate internet access today. And you’re right that what adequate internet access is is a matter of definition by the FCC. And the FCC is using a really weird, very low definition and cramped, saying that uploads don’t have to be at the same rate as downloads. So they say 25 megabits per second down, 3 megabits per second up. In the eyes of someone from China, South Korea, Japan, Singapore, Hong Kong, that’s a ridiculous definition. That’s like putting someone on the bike path when the rest of the country is on a major eight-lane highway. That’s a very small amount of data at a very low speed.
When we talked four years ago, and it was after this net neutrality decision, court challenged by Verizon, and then you said, “Well, this can all be fixed. The FCC can basically decide to regulate internet access like it does telco.”
And I said, “Really? You make it sound like it’s really easy; you just sort of sign something.” You said, “Yeah.” And sure enough, they did.
So for policy stuff, this stuff can move back and forth fairly easily, right? I mean, the flip side is that they just pulled the plug on that with the Trump administration, so we can go back and forth.
To get fiber to homes, right, that’s not just a signing a document, right? That’s real political will and capital and actual financial capital. It seems like an enormous project for a country that really is struggling to do lots of basic things.
More than four million Americans wrote in about net neutrality back in the days of those battles, in 2014 and 2015. And three-quarters of Americans, again, really think this is an important issue. And for people who can’t get access at all, it’s like not being able to breathe. It’s a huge problem. This is one of those basic issues that is akin to what we’re doing on defense or whether our water is clean or our air is clean. This is fundamental to how the country operates. The reason there’s so much …
It seems like the audience for this podcast would agree with you. And it’s hard for me to imagine a broader audience that has real problems getting food and shelter, or they have all sorts of political misinformation and they believe the Russians are coming to Florida. Whatever it is. It’s hard to imagine this really becoming a national issue.
You know, those other problems are on the same level, I would say. We are heading towards a reckoning. How do we help people lead thriving lives in America? What’s happened to our basic sense of, you need a good education, you need good healthcare, you need a utility communication service. All of those things do need to be fixed. This one is fundamental to many of the other policy issues we care about.
If you care about climate change, if you care about education or health, those require a fantastic communications network so that people get access to those services. The reason there’s been such a kerfuffle over net neutrality is that what that fight is really about is how we think about telecommunications. Is it basic to human life, or a luxury? And the reason that Comcast and the other guys are fighting against these buzzwords — net neutrality — is because what they really want to avoid is being re-labeled as a utility service, something that’s subject to government oversight.
We’ve missed the boat on that right now. We can always turn the boat around, and we seem to be heading there as a country. There’s a kind of progressive revival going on in the cities around the country where people actually see how services are delivered, education, health, communications. They really get involved. And where a mayor cares about all of his or her citizens … The capacity to care about something like fiber carries with it the capacity to care about education, workforce development, health, and everything else.
And this book explores that evolution. This is just part of a major story for the country, this day of reckoning that’s coming I think in the 2020 election. Where people say, we actually care about everyone as a country. And it’s important that we put our money where our American values are.
You traveled around the world to go see the future of fiber or what fiber looks like now. If I don’t want to cross the Pacific, there are cities in America that have done this. What’s sort of a good working lab for me to go visit if I want to see the benefit of doing this?
I think Chattanooga is a pretty terrific story.
In Tennessee. And it’s a dirty old mill town from the ‘60s and ‘70s that redid itself in a whole series of actions. And one of them has been to ensure fiber access. What you see there is many new businesses showing up. You also, though, see a city that is now turning …
They paid for it themselves?
Yeah. Well, they had some grant money for Smart Grid, so you can measure energy use using fiber. And that money was plowed into the fiber network. But it long ago paid for itself. And now the electricity rates are going down for the people in Chattanooga, because they’ve made so much money from fiber.
But you also see a place, traditionally deeply segregated, a lot of poverty, turning towards workforce development. Turning towards increasing the number of high school graduates who are ready for the great jobs that are showing up. So in small, Chattanooga is the story of what America could be.
So spell out, why does getting fiber to Chattanooga improve high school graduation rates?
It’s more about the mindset of leaders in Chattanooga … business leaders, civic leaders, the mayor, the whole populace.
We can accomplish this. We can do more.
We can do this and we care about what happens to our high school graduates and what their opportunities are. And that’s of a piece with a long series of developments in Chattanooga. It wasn’t like fiber arrived alone as a part of a narrative. It’s part of a greater narrative for Chattanooga. But what I point to in the book is that it’s also part of supporting the entire populace, not just a few people.
That’s funny, because when I read your book, it’s very high-protein, right? It’s very dense, a lot of information. It’s great. It’s easy to read. It’s also quite dour, I think. I mean, it provides very sort of stark arguments against why any of this is going to happen. I talk to you and you seem much more optimistic. Maybe I’m missing the optimism in the book. In the same way, you know, you watch The Wire, you’re like, “Oh, endemic crime and corruption is part of urban America. We can’t stop it.” But you think this can be fixed?
Look, I’m resilient and cheerful, like all other Americans. We’re always like this. We built the Hoover Dam, you know? We built the Tennessee Valley Authority. We built the national highway system. And we led, as a country, certainly from the end of the Second World War until, let’s say, the ‘70s. We can do it again.
The other thing I discovered on these trips around the world is that the grit and ingenuity and scrappiness and kind of playfulness of Americans is not necessarily echoed in those other places. They may have great networks, but they don’t have our entrepreneurial sense. And what I dream of is marrying that great American spirit of inventing new things with an actual network that will allow us to build those new industries. We don’t have that right now.
Susan Crawford, you should run for office.
No. I want other people to run for office.
I want to leave on that optimistic note. I knew you would be great as a podcast guest. I was trying to get you on for years.
Now you have a book so you have a reason to come. So thank you so much.
Thank you very much.