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.