FCC Gives ISP $8,000 To Deliver Broadband Five Feet From Apple's $5 Billion Campus

from the wasted dept

We've noted repeatedly that there are two major reasons US broadband is slow, spotty, and expensive: regional monopolization (a lack of competition), and the state and federal regulatory capture (corruption) that protects it. On the latter front, there's been an absolute army of telecom industry aligned folks, who, for decades, have relied on dodgy broadband availability maps and dubious data to not only pretend there's no real problem that needs fixing, but also to slather companies with subsidies without ensuring that money actually goes toward fixing the problem.

Last fall, the FCC held a reverse auction doling out nearly $9 billion from the FCC's Rural Digital Opportunity Fund (RDOF), paid into via Universal Service Fund (USF) contributions affixed to your broadband and phone bills. To be very clear: some of this money will absolutely help shore up access in underserved communities. But after digging into the FCC maps of the winning bidders, consumer groups found a long list of examples where we were throwing billions of dollars at companies for deployments that make no sense.

For example, Free Press noted that Elon Musk, the second wealthiest man on the planet, managed to game the FCC system and nab $886 million in ratepayer subsidies for his Starlink system. And he did it by promising the FCC that his company would bring broadband to essential US areas like... already connected airports and highway traffic medians:

"As we have documented in our previous two posts, however, this effort to close the rural-broadband digital divide looks more and more like one of the most wasteful projects in FCC history."

While some of this grift will be cleaned up in a second round of FCC application review, you can't blame this on "we didn't know," or "the system just needs tweaking." We've thrown countless billions of dollars at telecom incumbents for fiber networks routinely only half completed. It's a policy choice. Now we're giving billionaires who don't need the money, even more money to deliver service that's inferior to the fiber networks most of you already paid for.

The problem is pervasive. Light Reading, for example, noticed this week that a small wireless ISP by the name of LTD Broadband is poised to get $8,000 from the FCC to deploy 1 Gbps service five feet outside of Apple's $5 billion new headquarters:

"RDOF funds will go to serve areas adjacent to the brand-new Apple Campus in Cupertino," complained the Competitive Carriers Association (CCA) to the FCC in a recent filing. "Far from 'unserved,' the Apple Campus is one of the most connected places in the entire world."

LTD nabbed $1.3 billion in promised federal payments to build broadband across 13 states. But the company is one of several that's getting FCC funds that don't make sense, for service it's not clear they can even successfully deploy:

"LTD is one of several major RDOF winners that has faced withering criticism that it will not be able to meet its RDOF obligations. "There is no indication that LTD [Broadband] has the technical, engineering, financial, operational, management, staff or other resources to meet RDOF build-out and service obligations," wrote the Minnesota Telecom Alliance and the Iowa Communications Alliance in a recent joint filing to the FCC."

And while there have been spotty efforts to improve both mapping and subsidization, they always seem just around the next corner or a few years down the road. So when you see guys like the FCC's Brendan Carr whine about how "big tech" needs to give billions of dollars to "big telecom" for no coherent reason, notice how he excludes the fact that fixing the money trough that is US telecom subsidization should probably be tackled first. As Ajit Pai showed, pretending you care about the "digital divide," while simultaneously making the corruption and monopolization that created it worse, remains very fashionable.

Again, many subsidies have certainly gone to very promising projects that provide direct and immediate aid to underserved areas neglected by regional giants. But at the same time, federal and state US taxpayers have likely paid enough in subsidies over the last few decades to deliver fiber to every home in America several times over (not that we'd ever bother to do a comprehensive audit). Instead of getting that fiber, Americans get a very expensive hamster wheel that's about 40% incompetence and grift.

Filed Under: broadband, corruption, covid, digital divide, fcc, oversight, rdof, rural digital opportunity fund, subsidies, universal service fund, usf

Consumer Groups Get Punchy As Biden Team Lags On Staffing FCC, Restoring Net Neutrality

from the taking-your-sweet-time dept

Last December the Trump administration rushed the appointment of Nathan Simington to the FCC, despite Simington having absolutely no real experience or qualifications for the role. That's because Simington was appointed for two other reasons. One being the silly (and utterly hypocritical if you tracked the net neutrality fights) effort by the Trump administration to try and have the FCC target Section 230, which was derailed by Trump's election loss.

But the other purpose of Simington's rush appointment was to ensure the FCC would be gridlocked at 2-2 commissioners. Like the FTC, the FCC is comprised of a 3-2 partisan makeup depending on who controls the White House. And while Biden could have easily appointed a new FCC Commissioner to break that gridlock, we're now nearing six months into his tenure with no movement on this front.

Granted there are a lot of fires the Biden administration is tasked with putting out. But having a gridlocked FCC during a health and economic crisis where broadband is playing a starring role still isn't a great look. As a result, a coalition of more than 50 consumer groups and unions wrote the Biden camp last week asking for something vaguely resembling urgency on the FCC front:

"As we move toward the second half of 2021 with no nomination for the fifth and final commissioner, the Federal Communications Commission remains below full capacity, which is incompatible with the goal of delivering open, affordable and reliable high-speed broadband to every home. This is all the more urgent given the fact poor families and people of color are disproportionately disconnected from high-speed internet access, compounding grave inequalities that were made worse during the pandemic.

Given the legislative calendar and the diminishing number of days for hearings and confirmation votes, we have reached a critical point to guarantee the agency charged with ensuring affordable communications access can do its work during your administration. Failing to nominate a fifth commissioner leaves the FCC less than fully operational and limits its capacity to most effectively.

Consumer groups are being overly polite here because they tactically need to be, but there's no reason for this to be taking this long, even with everything on the Biden team's plate.

I bring this up a lot, but that's because I still see a lot of folks who seem to think the net neutrality repeal didn't really matter much because the internet didn't immediately implode in a rainbow of color.

But it mattered because the repeal didn't just kill net neutrality rules, it effectively gutted the FCC's consumer protection authority, leaving it ill-equipped to police basic things like rampant telecom industry billing fraud. It shoveled any remaining consumer protection oversight to an FTC with limited authority over telecom, and that's too understaffed and underfunded to tack "hold telecom monopolies meaningfully accountable" on top of its existing, massive workload. It's precisely why the telecom lobby pushed for this. And the Biden team's lack in doing anything on this front for five+ months reflects a failure to understand any of this.

This regulatory lobotomization also occurred right before a crisis showcasing the essential nature of broadband for stuff like education, healthcare, and overall opportunity. The ridiculously named Trump/Pai "restoring internet freedom" repeal even tried to ban states from protecting broadband consumers (though the courts haven't looked too kindly on this last part). Needles to say, the combination of limited competition and regulatory capture isn't a good thing, and if you think it is, you've not spent much time on the phone with Comcast support, or trying to use an aging, expensive DSL line.

All of this also still matters because all of the justifications for the repeal, including claims of amazing job growth and ramped up broadband network investment, wound up being a lie. We effectively gutted oversight of a broken and heavily monopolized US business sector -- entirely because a handful of monopolies and their various policy tendrils promised all manner of amazing outcomes. When a long parade of experts pointed out the repeal was based on bullshit and would be harmful, we... ignored them. And when the amazing promised outcomes never materialized... we ignored that too.

And while many insist that Congress should just pass a net neutrality law and end this "regulatory ping pong," that (usually intentionally) ignores the fact that this telecom campaign-cash slathered Congress is never going to hit the 60 votes necessary to pass a law of any worth. That leaves us with a choice: either an FCC that's too feckless and pathetic to be able to stand up to AT&T and Comcast, or an FCC that at least has the authority and voting majority to occasionally hold these giants accountable.

Filed Under: biden administration, fcc, gridlock

Former FCC Boss Wheeler Says Trump FCC Napped On Cybersecurity

from the asleep-at-the-wheel dept

As we've made clear by now, the FCC under Trump spent four straight years kissing monopoly ass. From eliminating decades-old rules protecting consumers and competitors from the harms of media consolidation to gutting the FCC's consumer protection authority simply because AT&T and Comcast wanted it done, the agency under Pai was a textbook example of regulatory capture. There were a few high points (like the creation of a national suicide hotline), but by and large the FCC under Pai was just a mindless rubber stamp for the industry's wealthiest players.

While the Pai FCC was busy doing whatever AT&T and Comcast wanted, a lot of stuff those companies didn't care about fell off the table. Like any real rules governing the massive light pollution caused by low orbit satellites. Or any support for policies that would competitively challenge entrenched incumbents. And according to former FCC boss Tom Wheeler, a little thing called cybersecurity (more specifically, funds directed at smaller competitors to help them secure their networks):

"We are currently failing to use efficient regulatory mechanisms to oversee the security of these networks. The Department of Homeland Security has the expertise but lacks the regulatory authority of an agency such as the Federal Communications Commission. Yet, for the past four years, the Trump FCC was asleep at the switch, gutting cyber programs and refusing to exercise its authority."

The FCC has largely been a no show on the security and privacy issues plaguing the internet of broken things. And as Congress prepares to throw another $100 billion at America's broadband problem, Wheeler's worried that the funds won't come with any aid to shore up network cybersecurity. While a company like Comcast may not want or need that help, Wheeler argues that smaller broadband providers are going to need aid ensuring they're protected from the growing threat of cyberattacks like the one that just rocked Cox Media Group:

"It is precisely these factors that make such small rural companies prime targets for cyber hackers. The companies typically have fewer than 100 employees — some fewer than 10 — and often cannot afford dedicated cybersecurity personnel or cutting-edge defensive technology."

Of course lobbyists for incumbent giants like Comcast and AT&T are busy shaping what the final broadband bill looks like. That already means not only less money overall, but more subsidies sent to giant players, and less money sent to smaller companies -- especially if they're going to be providing any competitive challenge to incumbents. But throwing yet more money at broadband providers (an approach that already historically hasn't worked out that well for taxpayers) without providing funds to secure them could spell trouble as ransomware and other attacks increasingly target the most ill-prepared.

Filed Under: ajit pai, cybersecurity, fcc, tom wheeler

Detroit The Latest City Forced To Cobble Together Working Internet Thanks To Telecom Market Failure

from the so-heartwarming! dept

Frustrated by slow speeds, high prices, and spotty broadband availability (read: market failure) more than 750 US towns and cities have explored some kind of home-grown broadband option. Sometimes that's a local cooperative. Sometimes it's an extension of the locally owned power utility. Sometimes it's a public/private partnership with an existing internet provider. And sometimes it involves building an entire local broadband network from scratch. But always it's motivated by one thing: an ever growing, multi-decade frustration at the lack of competition and options in the US broadband market.

Enter Detroit, which is the latest city where annoyed users are being forced to build an entirely new ISP block by block:

"Detroit has historically been one of the least connected cities in America, with about 40 percent of Detroit residents lacking any home internet access at all. Things are changing, though, thanks in large part to projects like the Equitable Internet Initiative (EII), a collaboration between the Detroit Community Technology Project and a network of community organizations."

The effort involves relying on voluntary bandwidth provided by local enterprise provider 123Net. From there, locals are getting speeds of 25 Mbps via point to point wireless. That's a notable improvement for the 40% of the city that has no access to broadband at all. Or other major chunks of the city, where aging AT&T DSL may be their only option. If you're really lucky, an expensive Comcast cable line is your only broadband option.

But there's something that grates on me about these stories and it's this: for whatever reason, most major press outlets covering broadband in 2021 act as if the "digital divide" is this thing that just dropped from the sky one day. But the reason it still exists in 2021 is due to the regional monopolization and the corruption (federal and local) that protects it. Consumer groups have repeatedly showcased how with no competition and feckless regulatory oversight, AT&T just often simply refuses to upgrade its aging network. They've also shown how this impacts marginalized and low-income communities the hardest:

But for whatever reason, The Hill writes an entire story about Detroit's broadband problems and... doesn't mention AT&T's regional monopolization or political and regulatory corruption at all. There's just no shortage of stories like this that cover America's broadband dysfunction and the ad hoc solutions people are forced to come up with to get online, yet just fail completely to explain why this is happening. And kind of like stories where a local kid has to crowdfund his open heart surgery because our medical system is broken, the press tends to frame these efforts as heartwarming.

But it's extremely rare you see major outlets clearly explain that US broadband dysfunction was an active policy choice. It's the direct result of 25 straight years of prioritizing the interests of regional monopolies, and coddling giants like Verizon, AT&T and Comcast. It's the direct result of signing off on mindless consolidation and harmful megamergers. It's the direct result of choosing not to embrace pro-competition policies. It's the direct result of repeatedly neutering telecom regulatory oversight under the (false) promise this somehow results in telecom Utopia (despite 25 years of evidence this isn't true).

At this point our broadband failures aren't a matter of technology, or cost. After all, we've thrown countless billions of dollars at these incumbent broadband giants for fiber networks that mysteriously always wind up half completed. They're the result of leadership failure and corruption. But instead of clearly acknowledging and fixing these problems, we seem obsessed with (as the Trump era made fairly clear) doubling down on the bad choices that created them. Then dismissing the high prices, spotty coverage, and substandard service as just something that appeared one day, utterly free of any meaningful causation.

Filed Under: community broadband, competition, detroit, fcc, municipal broadband

CNET Amplifies FCC's Carr's Attempt To Force 'Big Tech' To Pay 'Big Telecom' For No Reason

from the troll-tolls dept

So last week we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that "big tech" companies get a "free ride" on telecom networks, and, as a result, should throw billions of dollars at "big telecom" for no real reason. You'll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn't be allowed to "ride his pipes for free." Whitacre was effectively arguing that in addition to paying for bandwidth, tech giants should pay him a troll toll, just because.

As we noted last week, this claim that technology giants (or anybody, really) gets a "free ride" when it comes to US telecom networks is laughable. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That's on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like Carr).

In reality, the argument that "big tech" gets a "free ride" has long been a flimsy proxy for telecom providers who believe it's their God-given right to get a cut of massive Silicon Valley ad revenues, even if that makes no coherent sense. It has popped up again and again for fifteen straight years, usually out of the mouths of those prodded into making it by telecom policy and lobbying organizations.

So when it popped up again last week I was fairly sure it would be ignored. Until CNET grabbed Carr's column believing it was in good faith, and amplified it to even more people:

"In a follow-up interview with CNET on Friday, Carr said companies like Facebook, Amazon, Apple and Netflix have been enjoying a free ride on the internet infrastructure, while millions of Americans have been paying what amounts to an additional tax on their telephone bills for broadband service.

"It's time for Big Tech to pay its fair share," Carr said.

CNET barely challenges Carr's assertion that these companies get a "free ride," even though you can't go five feet without running into an announcement where a company like Google is spending big bucks on telecom infrastructure. While Carr is right that the existing FCC USF and subsidization model does need fixing as contributions drop, Carr's not actually coming at this argument in good faith. If he were, he'd be able to mention in passing the billions we throw at telecom giants for fiber networks they routinely half deploy, or the countless examples of outright subsidy fraud that have plagued the telecom sector for years.

Instead the onus for funding America's unfinished broadband deployments is for whatever reason thrown at the feet of Silicon Valley, something Carr rambles on at length about, as if telecom sector monopolization/corruption and FCC incompetence is somehow Silicon Valley's fault:

"When it comes to deciding which companies should contribute to the fund and how much they should be required to pay, Carr suggests that legislators look at companies that benefit the most financially from the use of internet infrastructure.

..."For instance, Google's ad revenues -- I think those are fair game for looking at a charge to support the network," he said. "The same with Facebook or Apple's App Store, maybe even iPhone cloud services and certainly the [video] streamers."

But again, this presumes that these companies don't already pay massive amounts of money for bandwidth and telecom infrastructure. Or that telecom giants have somehow received an unfair shake, despite gleaning untold billions in tax cuts, subsidies, merger approvals, and regulatory favors in exchange for network investment and job promises that routinely never show up. CNET does at least point out this is all not new, though it's framed in the "he said, she said" view from nowhere journalistic approach that usually leaves readers wondering which side is telling the truth:

"This is an argument that large internet service providers have been pushing for years," former FCC Chairman Tom Wheeler said in an interview. In 2006, AT&T's former CEO Edward Whitacre was among the first to suggest publicly that companies such as Google shouldn't be given a "free ride" on his network. The comments ignited more than a decade of debate over net neutrality regulations.

CNET then proceeds to quote the telecom lobby, trotting out Rick Boucher, one time fair use champion turned AT&T lobbying and policy prop:

"Groups representing the telecommunications industry largely support Carr's proposal. The Internet Innovation Alliance, which represents AT&T along with telecom equipment makers like Alcatel Lucent, Ciena and Corning, says it makes sense. "Requiring Big Tech to help close the digital divide is an obvious and attractive solution to the Universal Service Fund (USF) crisis," former Rep. Rick Boucher, an honorary chair of the organization, said in a statement. "It makes sense for the Amazons, Googles, Apples and Facebooks of the world -- that depend upon and benefit from Americans being online -- to back efforts to achieve universal broadband. It's in their interest, as their user bases would be bolstered."

But it doesn't make sense in the broader context of the fact that US taxpayers have thrown countless billions already at telecom giants for fiber networks that mysteriously only wind up half deployed. That's not Amazon, Netflix, or Google's responsibility to fix, however much justified animosity you may have at these companies for dodgy behavior on numerous other fronts.

The story ends with Carr getting the last word about how he's just looking out for the little guy. But there's been no indication, at any point in Carr's long history of questionable claims, that this is actually true. What's more likely is that companies like AT&T, worried about the Biden broadband plan driving competition into their markets, want to capitalize on the animosity toward "big tech" by once again trotting out a lame argument that the real solution lies not in holding legislators, regulators, or telecom giants accountable for years of fraud and wasted money, but in taxing Silicon Valley. And Carr, never one to see a telecom argument he doesn't breathlessly support, was more than happy to amplify it.

Filed Under: big tech, brendan carr, fcc, free ride

Limited Competition Means US Broadband Prices Can Vary Drastically On The Same Block

from the do-not-pass-go,-do-not-collect-$200 dept

For years we've noted how a lack of competition means consumers across the country pay dramatically different prices for the same or worse service. For example a customer in Chattanooga, Tennessee can pay $70 or less for gigabit service, thanks to competition between Comcast and the regionally owned community broadband network.

But live in any of the countless US markets that major broadband providers have neglected (despite decades of major subsidies, tax breaks, and the near-mystical promises surrounding mindless deregulation), and you're often facing the choice of either an apathetic telco with sluggish, neglected DSL, or, more likely, a regional cable monopoly (Charter or Comcast) that charges significantly more money thanks to regional monopolization.

Over at Stop the Cap!, Phil Dampier recently showcased how the presence or absence of competition can even result in customers having to pay up to $40 more per month for the same or sometimes slower service. Not only that, users in more competitive markets enjoy longer promotion rates (often two years rather than just one). Even the fees charged by the regional monopoly (one major way they hit consumers with dramatically higher prices than advertised) are significantly higher at homes that lack any real competition:

"Spectrum charges a hefty $199.99 compulsory installation fee for gigabit service in non-competitive neighborhoods. Where fiber competition exists, sometimes just a street away, that installation fee plummets to just $49.99."

When asked to explain itself, Charter engaged in some tap dancing:

When contacted by Ars, Charter said that "Spectrum Internet retail prices, speeds, and features are consistent in each market—regardless of the competitive environment." But "retail prices" are the standard rates customers pay after promotional rates expire. Stop the Cap showed that Charter's promotional rates vary between competitive and noncompetitive areas.

Charter told Ars that its promotional offers are affected by several factors, including "location."

So while retail (post promotion) rates might be similar from block to block (which often isn't the case regardless of what Charter states), the local cable monopoly uses contract length, promotional rates, and fees to charge significantly different rates. That makes it more difficult for policymakers, consumers, and the press to analyze pricing is quite by design. And it's a major reason why the cable lobby, for years, has fought against the FCC sharing consumer pricing data, knowing full well that once you clearly illustrate the impact of regional monopolization and limited competition, somebody might get the crazy idea to try and actually fix it.

Filed Under: broadband, competition, fcc, prices

Worried About Tracfone Merger Approval, Verizon Pretends It Didn't Exploit COVID Emergency Program

from the with-friends-like-these dept

Prodded by Congress, a few months back the FCC launched the Emergency Broadband Benefit, a $3.2 billion program designed to provide folks struggling economically during COVID a little extra help affording broadband. Under the program, users get a $50 discount off their broadband bill, a total that jumps to $75 for those living on tribal areas. As we've well covered, regional telecom monopolization and corruption results in Americans paying some of the highest prices in the world for broadband, a problem that hits low income consumers and marginalized communities the hardest.

While the program does little to fix US broadband's bigger competition issue, it's certainly helping folks; roughly a million folks signed up the first week. And while the majority of the 825 participating ISPs are engaging in the program in good faith, it's not particularly surprising that some ISPs decided to try and game the system to make an additional buck. Charter, for example rejected users from signing up if they didn't agree to pay for a more expensive broadband tier once the program ends, which appears to violate the program rules.

More problematic is Verizon, which got caught forcing users to sign up for even more expensive tiers if they wanted to apply to the program, resulting in some users being forced to pay more for broadband than if they'd never signed up for government help in the first place:

"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."

Not too surprising coming from a company criticized in 2018 for capping California firefighters' "unlimited" wireless plan during an historic wildfire, then trying to upsell them to more expensive plans as they tried to battle the blaze. Only once the press highlighted Verizon's latest COVID relief gamesmanship did they back away from it, issuing an odd press release pretending that none of this had ever happened, and any changes to their approach were entirely of their own making. The company has also been trying to do damage control at the FCC, claiming people didn't experience the thing they clearly experienced:

"Verizon is defending its practice of forcing customers to switch plans to get a government-funded $50-per-month discount, telling the Federal Communications Commission that this is not the same thing as "upselling." Verizon has partially backtracked from this restrictive policy but told the FCC it will take "about a month" to deploy a billing-software update that will let more home-Internet customers get the discounts without changing plans."

Again, not too surprising for a company that spent millions of dollars trying to neuter the FCC and net neutrality, then used a fake journalist to pretend it wasn't actually doing that.

Verizon's particularly sensitive because the company is currently trying to gain regulatory approval for its acquisition of Tracfone, a prepaid wireless carrier predominately used by low income Americans. Consumer groups like Public Knowledge have been warning the FCC (pdf) that a company that thinks nothing of exploiting a program designed for low income Americans might just not be the best steward of a company catering to low income consumers. But I'd wager the Biden FCC approves the deal anyway, given America's obsession with the illusory benefits of near-mindless telecom consolidation.

Filed Under: broadband, covid, emergency broadband benefit, fcc
Companies: tracfone, verizon

Verizon Forces Users On To More Expensive Broadband Plans Just To Get $50 Covid Subsidy

from the not-helping dept

As part of a recent COVID bill, the government recently announced that folks struggling economically during COVID would be getting some temporary help. Under the EBB (Emergency broadband Benefit program), U.S. consumers can nab a $50 discount off their broadband bill, or $75 if you live in tribal areas. The program ends when its $3.2 billion in federal funding expires, or six months after the government has declared an end to the pandemic.

It's a useful but temporary band aid, and doesn't really do much to address the regional monopolization and lack of competition that makes US broadband so perennially mediocre in the first place. Nor does it address the fact the Trump FCC gutted its own consumer protection authority because a bunch of telecom monopolies asked them to, using completely bogus justifications.

Under the program, the money is first given to your broadband provider, which is then in charge of ensuring you get the discount. But given these companies' track record of dodgy behavior, it obviously didn't take long for US telecoms to misbehave. Enter Verizon, which is using the program as an opportunity to upsell customers to more expensive plans. Users contacting Verizon to sign up were told the program didn't apply to their existing plans, and in order to get the discount they'd need to sign up for more expensive service. The Washington Post politely points out this is rather sleazy:

"Verizon elicited the most ire from readers. It requires customers to call a phone line to register for the EBB, rather than just signing up online. And when you do, Verizon told some customers the EBB can’t be used on “old” data plans, so they’d have to switch. That might be allowed by the letter of the law but certainly isn’t the spirit of the program."

Granted this is the same company that tried to upsell California firefighters to more costly plans when their data allotment ran out during an historic wildfire, so this shouldn't be too surprising. In short, knowing the subsidy was temporary, Verizon nudged users to more expensive plans so they'd see a revenue boost when the plan ended. U.S. regulators at the FCC didn't do a thing. Fortunately Verizon reversed course after the Post story began circulating online:

"On Wednesday, two days after I initially published this column, Verizon reversed course and said it would accept old plans. “We heard from some customers that they prefer to stay on the legacy plans they have,” it wrote in a blog post. “Moving forward, we will offer customers on legacy Fios plans (no longer in market today) the ability to enroll in EBB."

A few other companies have taken to using misleading websites to trick users into thinking they're enrolling in the government's official program (the real website for which is here).

Needless to say the press shouldn't always be the last line of defense against Americans getting ripped off, especially considering the increasingly tenuous financial situation the press finds itself in. You also wouldn't need a COVID discount program in the first place if the U.S. hadn't spent the last twenty years coddling regional monopolies, resulting in some of the most expensive prices in the developed world for broadband.

Filed Under: broadband, competition, covid, discounts, ebb, fcc, subsidy
Companies: verizon

FCC's Carr Thinks 'Big Tech' Should Subsidize His Pals In 'Big Telecom'

from the do-not-pass-go,-do-not-collect-$200 dept

Way back in 2005, former AT&T CEO Ed Whitacre whined incessantly about how Google was getting a "free ride" on his company's "pipes," and that they should be charged an additional toll (you know, just because). As we've discussed countless times in the years since, Whitacre's argument made absolutely no sense, given that Google not only pays plenty for bandwidth, but the company owns billions in international and oceanic fiber runs, data centers, and network infrastructure. Despite making no sense, this idea that Google was some kind of free ride parasite and should be throwing millions in additional money at telecom giants has been a talking point for global telecoms for years.

While the feeble argument had taken a vacation for a while after the net neutrality debate, it popped up again this week in a clumsy, logic-optional op-ed over at Newsweek by FCC Commissioner Brendan Carr. In it, he argues that we should do away with existing flawed but important low-income and school broadband subsidy programs like E-Rate, and instead have "big tech" pay for everything:

"It is time to fundamentally rethink how we fund our high-speed networks. That is why I am proposing a third way. We should start requiring Big Tech to pay its fair share. Big Tech has been enjoying a free ride on our internet infrastructure while skipping out on the billions of dollars in costs needed to maintain and build that network. Indeed, one study shows that the online streaming services provided by just five companies—Netflix, YouTube, Amazon Prime, Disney+ and Microsoft—account for a whopping 75 percent of all traffic on rural broadband networks.

So, as we've noted the last fifty times this flimsy argument has been trotted out, streaming video giants like Google, Amazon, and Netflix pay millions of dollars for connectivity. Not only that, they run vast fiber routes that stretch around the planet and operate their own massive content delivery network hubs to ensure it's all delivered as efficiently as possible. For Christ's sake, Google is an ISP. The fact their popular video products make up the majority of overall internet traffic is an utterly meaningless stat in this context, thrown in there by Carr (or more likely his intern) to make his argument sound semi-coherent and scientific.

But the reality is these companies aren't getting anything even vaguely resembling a "free ride." When it comes to the heavily regionally monopolized US telecom market, nobody gets a free ride. Consumers, schools, and enterprise customers alike often pay some of the highest prices in the developed world for bandwidth thanks to limited competition and regulatory capture. But for literally 20 years the telecom industry has employed a rotating crop of sock-puppets and dollar-per-holler experts who employ the "free ride" argument for one reason: big telecom wants an even bigger handout.

It looks like the GOP tried to make this lame argument go viral yesterday, but be well aware, this is an AT&T message being parroted through the mouth of their most trusted, captured regulators:

That's not to say we shouldn't be reforming our existing and often quite broken subsidy programs. But something Carr (coincidentally, for sure!) forgets to mention is that if anybody is getting a free ride in this equation, it's regional telecom giants. They've received countless billions from taxpayers over the years for networks that always mysteriously wind up half deployed. Time after time after time after time, "big telecom" nabs billions in subsidies, regulatory favors, tax breaks, and other perks in exchange for half ass, half completed fiber networks.

Not only does Carr intentionally avoid mentioning the telecom industry's long and obvious history of taxpayer fraud, waste, and abuse, he attempts to flip everything on its head and suggest only large tech companies are the beneficiaries of "corporate welfare":

"Ending this corporate welfare is more than fair. It is consistent with the network compact that has prevailed since the earliest days of the Ma Bell telephone network. Historically, the businesses that derived the greatest benefit from a communications network paid the lion's share of the costs. For instance, the fees that businesses paid for local and long-distance calls provided the key funding stream to build the traditional telephone network."

Big tech has ample issues that need addressing, but that's not really what's happening here. What's happening here is the telecom lobby is trying to piggyback on valid complaints about Silicon Valley giants just so they can grab a chunk of their ad revenues. Revenues AT&T, Comcast, Verizon had friend have coveted for years. The problem is we're talking about broadband, and when it comes to broadband as it pertains to "free rides," the problem is these telecom giants themselves.

Carr must have forgotten about how AT&T got a $42 billion Trump tax cut in exchange for big promises of boosted network investment and jobs that never happened. Not only did they not happen, AT&T has laid off an estimated 54,000 employees since 2017. I think folks are smart enough to see through Carr's arguments here. After all, this is a guy that has never seen a giant telecom merger, handout, regulatory favor, or subsidy he didn't like. He's about as clear of a captured regulator as you're likely to see in the wild, and the idea he's interested in genuine reform given his track record should be laughed at.

Telecom giants like AT&T have always lusted after the immense advertising revenues Silicon Valley has enjoyed, and have always somehow believed they're owed a slice of those revenues just because much of this traffic touches their own networks. But "big technology companies should pay us billions in additional dollars for no reason" has never been a real argument. It's just a flimsy telecom monopolist pipe dream repeatedly propped up by captured regulators and corrupt politicians who lost the plot years ago.

So why is it popping up suddenly now? My wager is telecom lobbyists want to provide their trusted DC allies with talking points to help them justify their opposition to Biden's $100 billion $65 billion broadband plan. Messaging along the lines of: "spending money to expand broadband competition isn't really necessary! Wouldn't it just make more sense to have Google, Netflix and Amazon throw billions of dollars at AT&T for no reason?" But Google, Netflix, and Amazon are already paying for it. We're all paying for it. Over, and over, and over again. And the reason we're still paying for it in 2021 is because too few DC officials have the courage to stand up to regional telecom monopolists in the first place.

Filed Under: brendand carr, corporate welfare, digital divide, e-rate, fcc, free ride, subsidies
Companies: at&t, facebook, google, netflix, verizon