Steve Bannon wants to regulate Facebook and Google as if they were utilities. The Intercept:
Bannon’s basic argument, as he has outlined it to people who’ve spoken with him, is that Facebook and Google have become effectively a necessity in contemporary life. Indeed, there may be something about an online social network or a search engine that lends itself to becoming a natural monopoly, much like a cable company, a water and sewer system, or a railroad. The sources recounted the conversations on the condition of anonymity because they were not authorized to give the accounts on record, and could face repercussions for doing so.
Under the Obama administration, the Federal Communications Commission moved forward on a plan to regulate internet service providers as utilities, barring them from slowing down traffic to a site in order to pressure it into paying higher fees. The Trump administration is pushing to reverse that move, which complicates Bannon’s message.
Bannon’s argument is bolstered by an unlikely player: Facebook founder and CEO Mark Zuckerberg. For years, Zuckerberg routinely described Facebook as a “social utility.” Indeed, it was originally part of the company’s slogan. In an interview in 2007 with Time magazine, he was asked to elaborate on what had become a central talking point.
Time: Why do you describe Facebook as a “social utility” rather than a “social network”?
Zuckerberg: I think there’s confusion around what the point of social networks is. A lot of different companies characterized as social networks have different goals — some serve the function of business networking, some are media portals. What we’re trying to do is just make it really efficient for people to communicate, get information and share information. We always try to emphasize the utility component.
If Bannon is successful in his quest, the regulation of Google and Facebook would be similar to that of cable and telephone companies, where control of vital infrastructure led to legislation to control prices and encourage competition. Fortune Magazine:
Many observers, including a pair of CNBC anchors who debated the issue Friday, would argue that the technical barriers to entry are low enough that such regulation is unnecessary when it comes to internet services. But Bannon’s reported thinking points to a new frontier in monopoly regulation. While Google and Facebook don’t control a network of wires, their dominance creates other barriers, including so-called "network effects," that make it hard for new entrants to compete. Facebook has even previously described itself as a "social utility," and its vast sway in public matters was highlighted when it helped spread deceptive news during the 2016 U.S. election.
That viewpoint makes the populist Bannon an unlikely bedfellow of the traditionally pro-regulation European Union. The E.U. slapped Google with a $2.7 billion antitrust fine last month for giving its own services preferential treatment in search results.
Bannon’s reported stance also seems to contrast with the stance of Trump’s FCC head, Ajit Pai. Pai has been working to roll back net neutrality rules that treat Internet service providers like utilities.
Since Donald Trump took office tech giants Google (GOOGL, Tech30), Apple (AAPL, Tech30), Amazon and Uber have set new lobbying spending records in Washington.