Surprise: Telecom Giants Are Exploiting State Corruption To Undeservingly Funnel A Disproportionate Chunk Of The Massive Broadband Infrastructure Stimulus To Themselves

from the David-needs-better-lobbyists-to-defeat-Goliath dept

Between COVID relief and the new infrastructure bill there’s a massive, historic, $50+ billion taxpayer subsidy headed for the broadband industry that should do a lot of good in shoring up access in underserved locations. But we’ve also noted how the government still doesn’t have a great idea of where that money should be spent, because our broadband maps (while improving) are generally terrible.

And we’ve also noted that (surprise), the telecom industry’s biggest players are working overtime, state by state, to ensure that this money goes exclusively to them, and not to any of the smaller utilities, cooperatives, municipalities, or small private businesses in desperate need of such funding.

The infrastructure bill dictates that states should be in charge of their own broadband funding and grant process, which makes sense. The problem is that when it comes to telecom lobbying and corruption, states are even more corrupt than the federal government. So what we’re seeing is a process that favors entrenched interests, resulting in pretty obvious outcomes.

That’s a major problem, since most of the most exciting innovation in telecom is happening at smaller ISPs, local utilities, cooperatives, and community broadband projects (I just wrote a paper for Techdirt and Copia on this very subject), which tend to offer faster, cheaper, more reliable (and locally staffed) service than most of the nation’s lumbering regional monopolies.

In Louisiana, Issie Lapowsky at Protocol notes local communities already earmarked for broadband improvement funds have had that money unceremoniously stripped away after the funding awards were challenged by large, incumbent telecom giants.

So what I’m seeing repeatedly is a giant telecom with an unlimited budget, challenging each and every grant or award doled out to smaller businesses, smaller cooperatives, utilities, or municipalities. These smaller operators can’t afford to go toe to toe with with giant companies, which are able to outspend and out politically maneuver them, ensuring the biggest players get most federal and state grant money:

Fifteen other broadband grants are being contested in Louisiana alone, and similar fights are playing out across the country. Now, thanks to a massive amount of broadband funding set to flow into states under the Bipartisan Infrastructure Law, these fights could become even more frequent — and even more fierce. “It’s happening all over the country,” said Jonathan Chambers, a partner at Conexon, “but it’s going to get worse.”

I’ve seen some variety of this play out in most states as the funding began to flow.

I’ve written about how monopolies like Charter Communications and Comcast are making life hell for anybody who applies for federal broadband grants by saddling them with costly, onerous challenges at the NTIA, based on flawed FCC mapping data.

I’ve talked with state leaders in Maine who say federal broadband maps still rely heavily on bogus coverage claims by incumbent monopolies, which allows them to both mask the sorry state of U.S. broadband competition, and direct funds away from areas they falsely claim are already served.

I’ve also written about how monopolies like Charter, Comcast, and AT&T are convincing numerous states to pass laws blocking federal grant money from going to cooperatives, utilities, and municipalities, despite this specifically being forbidden by federal rules.

Monopolies like Charter are hoovering up more than half of all grants in states like Montana, pissing off smaller ISPs in desperate need of funds.

And I wrote about how the FCC still hasn’t built an adequate system allowing smaller companies or municipalities to challenge FCC broadband mapping data they know to be false, which lets monopolies overstate coverage and claim any additional grant funding to these areas is “duplicative.” If locals do challenge, again, it’s a costly and cumbersome battle waged against a national ISP with unlimited funding.

So again, Americans talk endlessly about our absolute fealty to “small businesses,” but if you dig below the surface, you’ll routinely find (and I know this may come as a surprise to many) systems that inherently favor the wealthiest and most politically powerful companies.

That’s not to say the $50 billion+ broadband funding infusion isn’t going to do some amazing things. Or that incumbent ISPs winning these awards won’t follow through on their deployment promises (though their history on this front isn’t great). But it’s pretty obvious that state corruption is going to result in a lot of money being mindlessly thrown in the lap of monopolies… because that’s how it’s always been done.

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Comments on “Surprise: Telecom Giants Are Exploiting State Corruption To Undeservingly Funnel A Disproportionate Chunk Of The Massive Broadband Infrastructure Stimulus To Themselves”

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Anonymous Coward says:

isn’t it about time this telecom corruption was sorted out once and for all? the millions of dollars that they have gotten in return for doing what, exactly is a national disgrace! the schools, hospitals, libraries etc etc that could have been built with the funds they have basically stolen are innumerable! even worse, the actual internet structure the USA could have had instead of the heap of shit we’ve got could have been the world leader, the system everywhere else looked up to! and all because our politicians are more concerned with lining their own pockets, having their own bank accounts lined than doing their fucking jobs!! they are nothing other than pathetic jokes!!

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