In 2010, a municipality in Tennessee started  work on an infrastructure plan that was going  

to be a little bit sneaky. They had received a  federal grant from the Department of Energy to  

construct a digitally integrated electrical grid,  which would distribute energy to 170,000 customers  

in its district. The upgrade replaced the aging  energy infrastructure with automated switches and  

real-time monitoring to give the utility provider  more control over energy distribution while also  

reducing downtime from outages. According  to the town's own energy board, the EPB,  

these modern upgrades would save $40 million a  year in lost revenue from power outages while  

also saving $3 million a year in maintenance costs  on outdated tools. Now, local energy improvements  

are cool and all, but that's not what makes  this story interesting. To connect all these  

switches and smart meters to homes, businesses,  and their own control center, the town needed to  

lay down thousands of miles of network cables  anyway. So, they figured that surely there'd be  

no harm in extending those cables an extra few  feet and using the new network to also carry  

internet traffic for all its energy customers as  well. The new network was a massive improvement to  

put it lightly. After the rollout was complete,  the citizens of Chattanooga municipality were  

getting internet speeds 200 times faster than  the national average. Prices were also more  

competitive and coverage more consistent. In the  years that followed, this town bucked the trend  

of midsize Appalachian communities dying out  and actually started growing its local economy.  

Instead of moving out to big cities, young people  were actually moving in, attracted by a growing  

ecosystem of online businesses and predictable  online work. Today, it proudly calls itself the  

gig city, as the few million dollars a year in  savings from the electrical grid have pald in  

comparison to the billions of dollars generated  in the economy. All thanks to having fast,  

reliable, cost-effective internet. Other telecom  companies saw this economic potential and the  

billions of dollars that could be generated  from these comparatively modest investments  

and unequivocally committed to never letting it  happen again. Major internet service providers  

have lobbied relentlessly to ensure that what  happened here couldn't be repeated anywhere  

else across America. The industry has since  collectively spent over a billion dollars to  

influence laws designed to work against these  public networks. Representative groups funded  

by these same companies have also routinely sued  city governments for even considering offering  

something similar to their people. If all that  wasn't enough, they also spent a lot of money  

airing some of the most boomer ads you've ever  seen. You can't expect a policeman to unclog your  

drain. You shouldn't ask a teacher to change your  oil. And you wouldn't want a fireman to clean your  

teeth. So why would we let politicians take over  our internet service? That's just not what they  

do. Experience proves government-run networks  mean waste, corruption, and failure. Their  

objective was pretty clear. Limit competition  so they could charge higher prices for a worse  

service. And it absolutely worked. A study by the  International Telecommunications Union found that  

Americans were paying 3.2% of their net income  in broadband bills, a number largely pushed up  

by consumers in the USA specifically. Here in  the People's Republic of Europe, by comparison,  

we pay just 1.1%. However, this is more than  just another story about corporate lobbying  

ruining everything. I know that alone is not  going to shock any of you anymore. Instead,  

what you should probably know about is exactly how  this industry has been so effective at shaping the  

law in a way that's clearly against the best  interest of the people. Oh, and also the ways  

that other ISPs have watched America and are  now slowly starting to pull the same tricks in  

other countries as well. Information has a global  supply chain with journalists, experts, partisans,  

and talking heads all working to get their version  of events in front of you on a daily basis. That's  

why I trust Morning Brew to cut through the  noise and give me the basics of what's really  

going on. And we're really excited that they're  our first sponsor on Micro. A recent newsletter  

talked about the 996 grind set trend where lots  of young professionals are working from 9:00 a.m.  

till 9:00 p.m. 6 days a week just to get ahead of  their competition. I hadn't heard of the trend,  

and while I'm no workaholic, I definitely resonate  with the feeling of having too much to do and too  

little time to do it in. A good reminder  to shut off the laptop more often and get  

outside cuz I'd rather spend less time keeping  up on new trends or business than I already do.  

That's why Morning Brew's free, quick, and easy  to digest newsletter gives me just useful and  

timely information that I want with no fluff  or spin. This newsletter has over 4 million  

readers now. And if your work involves business,  finance, or tech, or you just want to know what's  

really happening before the spin doctors get  to it, and all in less than 5 minutes a day,  

you might want to join them. It's completely free  and takes less than 15 seconds to sign up. So,  

click the link in the description to sign up  for Morning Brew for free or scan the QR code  

on screen now. Okay. So, most industries where  political lobbying is highly effective have a  

few things in common. The first and absolute most  important variable is complexity. Think of all of  

the industries that have most successfully shaped  laws in their favor. Pharmaceuticals, healthcare,  

banking, and of course, technology are all the  domains of highly educated career professionals.  

So, even if lawmakers really were acting in the  best interest of their constituents, they often  

depend on these industries to explain what it is  they actually do. But follow along for the next 2  

minutes and I promise you'll understand more about  how the internet works than 99% of the politicians  

passing laws about this stuff. When you sent a  naughty picture to your friend via MSN Messenger  

or whatever it is you kids are using these days,  the connection between you and them is not nearly  

as direct as you might think. When you upload  that image, what you're actually doing is sending  

data packets to the server hosting the chat. Those  packets will go out through your router through a  

last mile connection to your home to a headend or  network hub which is either owned or operated by  

your telecommunications company or they'll lease  out capacity from a third party provider. This  

central aggregation center will then send those  data packets through internet exchange points  

where traffic is mixed together between different  providers before it's directed to the Microsoft  

server which will save these data packets locally.  Since Microsoft and MSN Chat pride themselves on  

speedy communications even with larger files,  the server will also send those packets out to be  

saved at various other servers around the world to  form something called a content delivery network.  

The reason why you can watch this very video  and skip seamlessly through that ad a minute  

ago is because YouTube makes copies that it then  sends out to thousands of data centers that it  

strategically positioned around the world to  make sure you can always connect to a server  

with low latency where you live. as something  of a balancing act to save on storage. Extremely  

popular videos across the site will be stored on  almost every data center around the world where  

smaller, more market specific content might  only get hosted in a few dozen. For security  

and competition reasons, Google doesn't actually  publicly share how it handles this data behind  

the scenes. In the case of your photo, though,  the server will send a copy of those packets  

back out through the public exchange points  and across the ocean using an undersea cable.  

A quick but interesting little detail is that  Microsoft actually uses its own cable MA which  

spans from Bill Bao in Spain to Virginia Beach in  the US. It laid this particular undersea cable in  

partnership with Meta to handle their immense  bandwidth requirements since on any given day  

they're sending pabytes of data back and forth  between Europe and North America. But anyway,  

at either end of the ocean, this cable connects to  more exchange points, which will eventually direct  

those data packets to another Microsoft server in  North America, where the copy will be saved. Then,  

when your friend reads the chat, their computer  will connect through their ISP's network through  

their own headend through the exchange points to  the local Microsoft server to request the image it  

will then send to them back down through the same  pipe. Now, that is the extremely basic breakdown  

of an extremely basic online interaction. I'm  sure even then there are going to be a few actual  

network engineers in the comment section telling  me what an idiot I am. However, the point is your  

internet experience depends on so many delicate  interactions between companies, governments,  

and cooperatives that it's frankly a small miracle  that it works at all. If the average person can't  

wrap their head around it, then what hope do  average lawmakers have? This technical complexity  

is mixed with a lot of legal complexity which  lets internet companies slip in laws tailored  

massively in their favor using three general  arguments. Number one, it's expensive. Number two,  

nobody else can do it properly apart from them.  And most importantly, providing an uncompetitive  

internet service is a god-given right laid out  by the founding fathers in the constitution. I  

am not joking. A majority of the problems  average consumers have with their internet  

happens right down here in the connection between  their ISP's headend and their home. Back in 1999,  

that last mile connection in Broward County had  been installed and was managed exclusively by  

Comcast. Unsurprisingly, with no other options  available, the service was not great, even by  

1990s standards. The city attempted to introduce  an ordinance that would allow other internet  

providers to share utility cables and bring some  competition to the marketplace. Their argument was  

that since Comcast was using public polls and  public land to run their network, they should  

be open to public competition. However, they did  not like this idea. So, they sued the city. When  

this case went to court, Comcast and a group of  industry lobbyists argued that they were the press  

because they made programming choices about  what messages to deliver and more importantly  

what messages to not deliver. In this case, the  messages they were choosing not to deliver were  

any data packets carried by their competitors.  What's more is that if the city government forced  

them to deliver these data packets via this new  ordinance, that would violate their rights to free  

speech and free press as outlined in the first  amendment of the constitution. It sounds dumb  

because it is dumb, but the judge sided with them  and now this ruling has been used as a foundation  

any time a local government tries to take away  their rights to hold a local monopoly. Of course,  

cities like Chattanooga got around this problem  by just building their own last mile network,  

but the ISPs had a plan for that as well. Just  like last mile deliveries, last mile connections  

are a major upfront investment with a lot of  technical and practical barriers to entry. Local  

governments want to build this infrastructure  because it will be popular with their voters who  

will appreciate the good internet. And the federal  government has also pushed programs for better  

connectivity because it's aware of the larger  economic benefits. So what the ISPs have done is  

target state level governments specifically with  a barrage of lobbying and political donations.  

They've argued that if local councils are  allowed to build this infrastructure themselves,  

they could go bankrupt given how expensive and  difficult it is to build those networks. That  

would mean that the state government would have to  bail them out, presenting a significant financial  

burden that could be avoided if only they just let  private enterprise handle it all for them. They've  

also argued that any attempt by the federal  government to build out this infrastructure  

is a violation of state sovereignty. So they  physically bottleneck connections at the local  

level and legally bottleneck them at the state  level. It's all very transparent, but the average  

voter just doesn't understand how these systems  work. So there's little risk to lawmakers who side  

with these companies. Now, if there's any actual  push back, the final argument is old, reliable,  

free market efficiency. If companies can't  guarantee captive customers in a given area,  

they won't have any incentive to reinvest or  innovate because they won't own that market.  

This has been the general messaging of a lot  of industry groups running those dumb ads. But  

the problem is they aren't innovating anyway. 15  years later, the broadband in Chattanooga is still  

some of the fastest anywhere in America. and other  internet service providers are allowed to compete  

in the same market if they want to. Proving  that competition doesn't stifle innovation,  

it encourages it. But if you're feeling smug  laughing at the Americans, you should probably  

know that telecommunications companies across  the world have seen how lucrative shaping laws in  

America has become, and they are trying to do the  same thing by pushing the technical limitations of  

their own local laws. It's also not just internet  services that fall victim to this strange blend of  

private enterprise protected by public legislation  either. As I was putting this video together,  

Hank Green released a video about electrical  companies pulling the same kind of shenanigans  

in Georgia. So, if you're from there, I'll leave  a link to that video below as required watching.  

One last thing that holds the US back is that  it costs a lot more to service sprawling suburbs  

compared to more densely populated cities and  towns across Europe and Asia. This is something  

that the companies and industry groups also really  like to highlight as a significant cost driver.  

And that's fair enough except for the fact that  this line of reasoning is almost always used as a  

way to ask the government for financial assistance  to help them build a network, a network that they  

will have a monopoly over. The Institute for Local  Self-Reliance published a comprehensive list of  

these monopolized networks that were built using  public funds, which is not great by itself, but to  

steal a line from the old crew, it gets worse.  If a local government has already contributed  

millions of dollars in financial assistance  to one company to build out their network,  

they're not going to spend the same money all over  again to help out another company. So what they  

end up effectively doing is creating a publicly  funded moat protecting a private business from  

public competition. Anyway, if you think this  system is dumb, go and watch this video next to  

find out how the financial system is undermining  the way the economy is supposed to operate.