No, Congress Can't Fix The Broken US Broadband Market In A Mad Dash During A Pandemic

from the round-and-round-we-go dept

COVID-19 has shone a very bright light on the importance of widely available, affordable broadband. Nearly 42 million Americans lack access to any broadband whatsoever--double FCC estimates. And millions more can't afford service thanks to a lack of competition among very powerful, government pampered telecom monopolies.

As usual, with political pressure mounting to "do something," DC's solution is going to be to throw more money at the problem:

"The plan unveiled Thursday would inject $80 billion over five years into expansion of broadband infrastructure into neglected rural, suburban and urban areas, with an emphasis on communities with high levels of poverty. It includes measures to promote rapid building of internet systems, such as low-interest financing for infrastructure projects."

To be clear, subsidies often do help shore up broadband availability at coverage. The problem is that the United States government, largely captured by telecom giants with a vested interest in protecting regional monopolies, utterly sucks at it.

Despite ample pretense to the contrary, nobody in the US government actually knows where broadband is currently available. Data supplied by ISPs has never been rigorously fact-checked by a government fearful of upsetting deep-pocketed campaign contributors (and valued NSA partners). As a result, our very expensive ($350 million at last count) FCC broadband coverage map creates a picture of availability and speed that's complete fantasy. It's theater designed to disguise the fact that US broadband is mediocre on every broadband metric that matters. Especially cost.

While there has been some effort to fix the mapping problem via recent legislation, the FCC still needs several years (and more money) to do so. And while you'd think this would be more obvious, you can't fix a problem you can't even effectively measure. There's also not much indication that the $80 billion, while potentially well intentioned, would actually get where it needs to go. Especially right now, when federal oversight is effectively nonexistent.

You may or may not have noticed this, but US telecom is a corrupt, monopolized mess. Giants like AT&T and Comcast all but own state and federal legislatures and, in many instances, literally write the law. Feckless regulators bend over backward to avoid upsetting deep-pocketed campaign contributors. So when subsidies are doled out, they very often don't end up where regulators and lawmakers intended. There's an endless ocean of examples where these giants took billions in taxpayer subsidies to deploy fiber networks that are never fully delivered.

If you were to do meaningful audit (which we've never done because again we're not willing to adequately track the problem or stand up to dominant incumbent corporations) you'd very likely find that American taxpayers already paid for fiber to every home several times over.

That's not to say is that there aren't things Congress could do to help the disconnected during COVID-19. Libraries for example have been begging the FCC for the ability to offer expanded WiFi hotspot access (via mobile school buses) to disconnected communities without running afoul of FCC ERate rules. But while the FCC said libraries can leave existing WiFi on without penalty, it has been mute about whether they can extend coverage outside of library property. Why? As a captured agency, the FCC doesn't like anything that could potentially result in Comcast or AT&T making less money.

None of this is to say that we shouldn't subsidize broadband deployment once we get a handle on the mapping problem. But it's a fantasy to think we're going to immediately fix a 30 year old problem with an additional $80 billion in a mad dash during a pandemic. US broadband dysfunction was built up over decades. It's the product of corruption and rot that COVID-19 is exposing at every level of the US government. The only way to fix it is to stand up to industry, initiate meaningful reform, adopt policies that drive competition to market, and jettison feckless lawmakers and regulators whose dominant motivation is in protecting AT&T, Verizon, Comcast, and Spectrum revenues.

Maybe the pandemic finally provides the incentive to actually do that, but until the US does, these subsidization efforts are largely theater.

Filed Under: broadband, broadband deployment, competition, congress, covid-19, fcc

FCC Uses Cherry-Picked Stats To Justify Giving Consumers A Giant Middle Finger

from the ill-communication dept

One of the fundamental cornerstones of disinformation and propaganda is repetition. As in, if you state something often enough, the idea gets lodged in the recipient's head and becomes truth by an act of sheer will. It's called the “illusory truth effect,” and it's been essential across most of the Trump administration as it attempts to convince the public that up is down, and black is white. It has been absolutely essential at the Trump FCC, where the agency has worked tirelessly to convince the nation that kissing the ass of the biggest telecom operators is intelligent policy.

You'll of course recall that one of the FCC's key justifications for killing consumer protections like net neutrality is that the modest rules stifled industry investment. Objective data from a litany of different sources has confirmed that's simply not true, including SEC filings, earnings reports, and the statements of countless industry CEOs. That hasn't stopped Ajit Pai, major telecom providers, or the litany of their dollar-per-hollar consultants and think tankers from making the claim anyway.

As required by Congress, the FCC periodically releases a Broadband Deployment Report indicating whether affordable, fast broadband is being deployed in a "reasonable and timely" fashion. This week, the FCC circulated a draft order of the initial report among Commissioners. It wasn't made public, but a statement by the agency (pdf) offered up a few choice statistics to imply that its attacks on consumer protections is having a miraculous impact on the telecom market. The FCC's chosen metrics are very...specific:

The number of Americans with access to 100 Mbps/10Mpbs fixed broadband increased by nearly 20%, from 244.3 million to 290.9 million.

The number of Americans with access to 250 Mbps/50 Mbps fixed broadband grew by over 45%, to 205.2 million, and the number of rural Americans with access to such service more than doubled.

What the Pai FCC doesn't tell you is these numbers have absolutely nothing to do with its policies. One, this data is only current up to late 2017, when net neutrality wasn't even repealed until June of 2018. In other words, this growth occurred while net neutrality regulations were technically still active. That didn't stop a lot of outlets from unquestioningly parroting the FCC's claims that this growth was somehow thanks to killing net neutrality or other "burdensome red tape."

A huge chunk of this growth in 100 Mbps connections is simply thanks to the cable industry's deployment of faster DOCSIS 3.1 coaxial technology. Those deployments began before Pai came to office, and were fairly quickly rolled out because they cost the industry relatively little to deploy. Again, these upgrades have absolutely nothing to do with his actual policies. This growth would have occurred had Pai done absolutely nothing.

What's more important is what the Pai FCC doesn't talk about. While cable giants like Comcast and Spectrum have been deploying these upgrades, the nation's phone companies have effectively stopped upgrading their DSL lines. That's providing cable giants with a monpoly over broadband across countless markets, resulting in higher rates and less incentive than ever to improve the industry's Achilles' heel: utterly atrocious customer service.

None of this prevented Ajit Pai from enjoying a victory lap:

“For the past two years, closing the digital divide has been the FCC’s top priority,” Chairman Pai said. “We’ve been tackling this problem by removing barriers to infrastructure investment, promoting competition, and providing efficient, effective support for rural broadband expansion through our Connect America Fund. This report shows that our approach is working. But we won’t rest until all Americans can have access to broadband and the 21st century opportunities it provides to communities everywhere.

Pai likes to present himself as a hero to rural America and consumers. And he likes to repeat the idea that mindless "deregulation" (which in telecom parlance means killing consumer protections) provides untold benefits to the public. But you'd be hard pressed to find a single consumer group (you know, the people paid a pittance to try and protect consumer rights) that supports his policies. And when you go into many rural markets (and tribal lands), you'll be quickly told that many of his industry-favored policies are actually hurting these communities, driving up costs, and making the problem worse.

Another metric the FCC throws around as evidence that its "deregulatory" strategy is working is the claim that 2018 saw record growth in fiber deployments:

The private sector has responded to FCC reforms by deploying fiber to 5.9 million new homes in 2018, the largest number ever recorded. And overall, capital expenditures by broadband providers increased in 2017, reversing declines that occurred in both 2015 and 2016.

Except the FCC just issued a separate report stating that fiber deployment "appears to have slowed recently," largely thanks to US telcos that are refusing to upgrade or even repair aging DSL lines. More importantly, at least 3 million of those locations only occurred because the previous FCC required AT&T to expand its fiber deployment to an additional 3 million homes each year, which is the opposite of deregulation, and once again, had absolutely nothing to do with Pai's industry-cozy policies. Other reporters have noted this period's growth was about even with, and in some instances slower than past reports.

It apparently doesn't matter how many times you repeat the fact that net neutrality didn't stifle CAPEX or deployment. It doesn't matter how many times you point out that CEOs themselves have admitted this claim isn't true to investors (who, by law, they can't lie to). It simply gets repeated over and over again. Legit condemnation is routinely ignored, no matter how factually sound. This repetition is an attempt to use the illusory truth effect to forge a new reality: one where sucking up to entrenched monopolies and ignoring both consumers and a broken market somehow results in near-magical outcomes.

You'll notice that Pai's FCC goes comically out of its way to avoid talking about the one thing that probably matters most to American consumers: broadband pricing.

It's a subject they avoid because it's an argument they know they can't win, even with repetition. Americans continue to pay some of the highest prices for broadband in the developed world thanks to limited competition and market failure. And thanks to the cable industry's growing monopoly, that problem's only getting worse. But instead of actually pushing an agenda that truly drives more competition to market, the Pai FCC is burying its head in the sand, parroting whatever Verizon and Comcast tell them to say, and trying to sell it to you, the American public, as adult policy.

Filed Under: ajit pai, broadband deployment, cherry picking, fcc, net neutrality, stats