JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to The Real News Network. I'm Jessica Desvarieux
in Baltimore.
U.S. cable company Charter Communications struck a deal with Time Warner Cable to buy
the cable giant for $55 billion. Back in April, Comcast tried to acquire Time Warner but the
FCC blocked the deal. But this Charter-Time Warner deal could end up seeing the light
of day.
Many don't know much about Charter Communications, but here's a map of the coverage area. And
their largest shareholder is John Malone. This billionaire ranks 56th on the Forbes
400 list of richest Americans, and he's the largest private landowner in America. Our
guest today wrote a column on his influence, and this deal's potential impact on the U.S.
economy. It's titled Monopoly Power Tightens Grip on U.S. Economy.
Now joining us from Rochester, New York, is David K. Johnston. David is a Pulitzer Prize
winning investigative reporter and bestselling author who writes columns for Al Jazeera America.
Thanks for joining us, David.
DAVID CAY JOHNSTON: Glad to be here.
DESVARIEUX: So David, for those who don't know much about John Malone, just describe
for us what you found out about him.
JOHNSTON: Well, John Malone has been in the cable TV business for decades. He rolled up
a lot of little mom and pop operations years ago into one of his companies, and he's bought,
sold, remade, refashioned, reworked around a whole variety of cable companies until he's
become a multibillionaire and a very major force in the cable television, and therefore
the internet business, in America.
DESVARIEUX: What would be the significance of this merger for everyday people? Let's
talk specifically about the internet, for example.
JOHNSTON: Well, so long as we depend on private companies that are de facto monopolies, or
perhaps duopolies, they might have one competitor on their market, there's not much incentive
for America to get the kind of internet other countries have. We invented the internet.
It started out as a military-funded project to help scientific researchers move information
back and forth. And yet today our internet is so bad, so slow, so unreliable that Bulgaria,
Bulgaria has a faster, cheaper internet than we do.
DESVARIEUX: Wow.
JOHNSTON: Internet in South Korea, which is universal, is the equivalent of Niagara Falls,
while America has a fire hose. And by the way, we pay more for what's coming out of
our fire hose than they do for what goes over Niagara Falls.
DESVARIEUX: And what's at the root of this, David? Like you said, the for-profit model.
Speak to that a little bit more.
JOHNSTON: Well, instead of adopting a policy that we want to have a universal internet,
a high-speed, 1GB, fiber optic internet and then going about building it however we chose
to do it, we instead said well, we'll trust the market. The market will provide. And the
market will provide. If you live in a prosperous neighborhood or a downtown urban core, you'll
probably get pretty good internet. Although Chattanooga, Tennessee decided their internet
wasn't good enough and they built a municipal system. Some other cities have tried to do
that and have done so very successfully.
But in a number of states an organization called ALEC, the American Legislative Exchange
Council, which works hand in glove with all sorts of industries, from oil and fast food
to cable companies, has gotten laws passed blocking cities from building an internet.
In most big cities if you built a municipal internet and you offered universal Wi-Fi,
probably you could serve everybody in town for a buck a month, not the $50 or more that
most people pay now for internet access.
DESVARIEUX: You mentioned ALEC, but I also want to talk about other influence, specifically
the families--I mean, John Malone's just one example. Do you see this sort of deal being
part of a larger trend in America? That we're moving away from a democracy and sort of heading
into a plutocracy?
JOHNSTON: And I've been writing exactly that for many years, in my trilogy of books and
elsewhere.
You know, it's important to understand, corporations are not the problem. We want to have corporations.
Corporations are very important for limiting risk, encouraging investment, and building
wealth. What we need, though, are rules so that we get the benefit of corporations, and
that's what we've abandoned. You know, we're not regulating big banks anymore. We've had
banking regulation for 4,000 years. I teach the law of the ancient world to law and graduate
business students at Syracuse University, and I show them how the ancients figured out
everything you need to do in the laws. Social insurance, building inspection, white-collar
crimes, testing witnesses, and controlling businesses so that they behave in ways that
benefit the public.
And we've moved into an era, the era of Ronald Reagan, which we are still in, in which we
assume that if you're a corporation, you must be motivated by the market to do good. Well,
no. you're motivated by the market to maximize profits. And in the case of cable TV that
often means don't put in the fastest equipment, it costs more. Don't wire any neighborhoods
you don't have to.
In New Jersey for example, they've gotten a setup now where Verizon only has to wire
up, or actually only has to run a wire past 35 houses in each census tract, where there's
about 1,500 houses in each tract. And as soon as they've run a wire past 35 houses they
can say, sorry, we're not going to serve anybody else. In a neighborhood where the demand might
be very third or fourth house, they don't.
DESVARIEUX: All right. David Cay Johnston joining us from Rochester, New York. Thank
you so much for being with us.
JOHNSTON: Thank you, Jessica.
DESVARIEUX: And thank you for joining us on The Real News Network.