ISPs Abuse FCC Covid Broadband Discount Program, Showing It's A Band Aid On A Much Bigger Problem

from the band-aids dept

For more than a year the Covid crisis has showcased the essential nature of broadband and the high prices Americans pay due to limited telecom competition. While fixing this competitive logjam has long been a work in progress, the pandemic has culminated in renewed efforts to ensure affordable broadband access is a top priority.

At the forefront of these efforts was the creation of the Emergency Broadband Benefit (EBB) program, which doles out a $50 per month subsidy to those struggling economically during the pandemic (it jumps to $75 per month for those living on tribal lands). The program ends when funds run dry or the pandemic ends, whichever comes first.

Over 825 participating ISPs enrolled a million users in discounted broadband plans in just the first week alone. The EBB is now providing essential, immediate aid to the nation’s marginalized and minority populations, routinely hit the hardest by the lack of affordable broadband. But while the majority of internet service providers (ISPs) are participating in good faith, several of the biggest industry players have exploited the program in a quest to generate additional revenue.

Last May, the Washington Post reported that Verizon was exploiting the program to force broadband customers to sign up for more expensive broadband tiers than they currently subscribed to (defeating the point of the whole program):

"Annie Styles from Arlington, Va., who pays $79 per month for her Internet, says Verizon told her she would have to switch to a plan that would cost her closer to $95. “I stopped pursuing it with them after the math didn’t work out,” she says.

Sharon from Harrisburg, Pa., who asked to be identified only by her first name, said she was told by two customer service representatives that she could receive the EBB discount only if she increased her current Internet speed and reconfigured her TV package, too. She said the ultimate price would have depended on what video package she was forced to switch to, as well as new equipment with fees — but she dropped her EBB application out of frustration before she got that far."

Verizon also refused to apply the discount on the company’s older DSL lines, often the only option for users in long neglected markets. Only once the strategy began making headlines did the company shift its trajectory, insisting in a statement that it was always the company’s intent to provide its customers “a wide range of choices to best fit their needs.”

"Verizon's behavior as an EBB provider demonstrates its disdain towards serving low-income consumers, such as TracFone's Lifeline subscribers," consumer group Public Knowledge wrote in a May filing opposing Verizon’s planned acquisition of the prepaid phone provider.

Other broadband providers, including Charter, T-Mobile, and AT&T, restricted which tiers of service qualified for the government discount. Frontier Communications was last week found to be only approving users if they signed up for the company's fastest service tiers. While this did not violate agency rules (left intentionally broad to encourage ISP participation), it limited applicant choice and often shoveled struggling families toward options they can't really afford.

In a bid to protect low-income consumers from bill shock when the program ends, the FCC required that ISPs give qualifying users clear notice that the program was ending, then get their explicit opt-in consent before subscribing them to a more expensive broadband plan.

But several broadband providers, including Charter, have been criticized for requiring that low-income Americans sign up for a more expensive tier of service upon their initial application. If they refuse, they are rejected from participation entirely, something news outlets say wasn’t initially made clear to users in the company’s FAQ. That runs counter to the point of the EBB program, which was to protect consumers from expensive broadband during an economic crisis -- not leave them saddled with even higher bills once the program ended.

A recent study by consumer group Free Press found that the average U.S. household expenditure on broadband jumped 19 percent in the first three years of the Trump era. The study also found that standalone cable broadband prices jumped 34 percent between 2015 and 2020, nearly four times the rate of inflation.

But many applicants to the EBB program say they’re struggling to even make it through the approval process. One report indicates that Charter and Comcast customers are being rejected at no fault of their own. One Comcast customer on Medicaid with a disabled daughter told Protocol they’d been rejected by the ISP four times, despite being approved by the FCC:

"Over the last several weeks, Corsaro said he's reapplied and been rejected by Comcast another three times. He's followed the circuitous trails of automated FCC phone lines that all lead to dead ends and appealed to the kindness of mystified Comcast agents, who have told him again and again that he needs to finish the FCC's verification process. "I keep telling them, 'I've been approved. There's nothing to finish,'" Corsaro said."

While the EBB program is providing welcome aid to many struggling Americans stuck on the wrong side of the digital divide, significant improvements and tougher, clearer guard rails for ISPs may be required if it’s to be made permanent. If carriers continue to exploit loopholes in the program, Congress could mandate a low-income tier like the one that New York State passed into law (which was met with a lawsuit and subsequent injunction courtesy of the telecom industry).

Consumer groups say much more needs to be done in order to improve both broadband access and affordability. A new Pew study found that a quarter of Americans still lack broadband access at home, with forty-four percent citing cost as the primary reason. Up to 42 million Americans lack access to broadband, and roughly 83 million Americans find themselves stuck under a monopoly where they have just one choice in internet service providers.

Regional monopolization and a lack of competition is directly responsible for the higher broadband prices paid by US consumers, putting an essential lifeline to healthcare, opportunity, employment, and education just out of reach for many. As such, it’s essential to adopt policies that drive creative broadband alternatives to market, lowering historically high broadband prices through competition. At the same time, restoring the consumer protection authority stripped away from the FCC by the Trump administration would ensure that government regulators have the tools needed to protect consumers.

While Covid has been an unspeakable tragedy, it has also been the catalyst for real change. The government insists a $1 billion investment to improve broadband infrastructure in tribal areas -- part of a Covid relief bill passed last December -- was just a “down payment” on the $2.3 trillion American Jobs Plan, which itself aims to set aside $100 billion to shore up US broadband coverage gaps. Assuming the proposal can survive "bipartisan negotiations" in the Senate, which have continued to whittle away at the scope of the effort.

Until the government realizes the true scope of the problem, the Emergency Broadband Benefit program, warts and all, at least gives struggling Americans a fighting chance. Those curious if they qualify for discounted broadband service under the program should visit the FCC application website. Users experiencing unnecessary barriers when signing up for the EBB program should file their complaints directly with the FCC.

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Filed Under: broadband, competition, covid, covid discount, emergency broadband benefit, fcc