How Antimonopoly Was Revitalized, Part 2: Barack Obama and the End of the End of History
In part one of this series, I described the “End of History” moment in the 1990s and 2000s, when policymakers celebrated a utopian vision of globalization. Ben Bernanke called it the “Great Moderation.” The big question for policymakers was to figure out whether it was deregulation or terrific monetary policy that led to such great economic outcomes. Essentially, “Am I too pretty, too rich, or too thin?”
What jarred this moment was the war in Iraq, and how it restructured the relationship between the American people and the media business. The Iraq War is the first war in which there were mass protests before the war started. Millions of people distrusted what they read and heard on the news, and many of them took to the internet to complain, using organizing tools such as blogs, listservs, and email, whose political import was driven by Howard Dean’s presidential campaign. The war’s opponents were right, which became clear fairly quickly.
At roughly the same time, and consistent with End of History libertarianism, the Federal Communications Commission (which was run by Michael Powell, Colin Powell’s son), sought to loosen local media ownership rules. Deregulation was almost pro forma at this point. But something odd happened: Those same millions who opposed the Iraq War turned their attention to the media, which they perceived as having lied the country into war, and wrote to the regulator of that media. Congress opposed the rule change, and the courts sent them back to the agency for review.
Over the next few years, the FCC became a focal point of public anger, particularly on the liberal side, because the party out of power usually has an energized grassroots. Over the course of the 2000s, the FCC sought to eliminate the common carrier rules for the telecom networks as regarding internet service, consistent with the overall framework laid down in the 1990s, to create a libertarian paradigm online. In 2005, in a complex case called Brand X, the Supreme Court ruled in favor of this move by the FCC, ratifying the policy choice that telecom monopolists could essentially control the information flowing over their wires. This became the net neutrality fight.
A large coalition of small business owners, nonprofits, and musicians joined together, spurred by comments like this one from AT&T CEO Ed Whitacre: “Anybody who expects to use pipes for free is nuts!” Of course, net neutrality wasn’t about letting people get free internet access—it was about arranging internet access on equal terms, a basic common carriage rule for a public utility. This was the first popular fight over an antimonopoly pricing law in decades. (If you want to read the full story, or at least my version of the full story, you can read it here.) The Big Tech giants weren’t giants at this point, they were moderate-sized companies on a rocket ship trajectory. In terms of political pull, it was the telecoms who controlled DC and the states.
At the same time, a scholar named Barry Lynn—then at a think tank called New America—was exploring a different side of the concentration of power: globalization. There had been protests against the World Trade Organization, most significantly the 1999 “Battle in Seattle” over labor and environmental standards. But Lynn in the 1990s wasn’t focused on social justice—he was a business reporter who noticed that supply chains had, for some reason, become increasingly brittle. In particular, he focused on an earthquake in Taiwan that in the late 1990s shut down factories halfway around the world, because an essential microchip was made in an area hit by the quake. There was no redundancy in supply.