FCC Low Income Broadband Program A Huge Windfall For Monopolies Causing The Broadband Affordability Problem We’re Pretending To Fix

Broadband

from the dysfunction-junction dept

During the COVID crisis, the FCC launched the Emergency Broadband Benefit (EBB program), giving lower income Americans a $50 ($75 for those in tribal lands) discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to users if they qualified.

But (and I’m sure this will be a surprise to readers), reports are that big ISPs erected cumbersome barriers to actually getting the service, or worse, actively exploited the sign up process to force struggling low-income applicants on to more expensive plans once the initial contract ended. Very on brand.

The EBB was rebranded the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout to the general public was dropped to $30 a month). And, once again, not at all surprisingly, the FCC discovered that “dozens” of U.S. broadband providers were ripping the program off to the tune of millions of dollars across Alabama, Ohio, Oklahoma and Texas.

At the same time, many of these monopolies have found the program to be big windfall for the very same companies that have historically fought tooth and nail against broadband competition, driving up consumer costs. A Senate inquiry last week found that Charter (Spectrum), for example, has seen more than a billion dollars funneled through its coffers via both programs:

Several of these companies have a very rich history of significant subsidy fraud. And I strongly suspect accounting reviews in a few years will find no shortage of dubious behaviors, especially given what we’ve seen already.

To be clear: I’ve spoken to several communities who say this program genuinely has reduced broadband costs for low income residents seeking access to an essential utility. While we get hung up on broadband coverage, data suggests that broadband affordability is the biggest barrier to broadband adoption. A $30 a month savings is a big deal for lower and middle income households.

Here’s the problem though: a regulatory agency with a history of poorly tracking broadband subsidies, failing to track broadband coverage, or standing up to telecom monopolies, is funneling billions of dollars through the pockets of companies that not only have long histories of fraud, but also have intentionally driven up the cost of broadband service via decades of lobbying and dirty pool aimed at crushing all meaningful competition.

We’re paying giant telecom monopolies to temporarily lower high prices they’re directly responsible for.

At the same time, the FCC and federal lawmakers generally lack the political backbone to actually embrace things like antitrust reform. They’re comically incompetent at measuring the impact of monopolization, crafting policies that directly address monopolization, or even acknowledging that telecom monopolies exist and are the biggest contributor to high consumer broadband costs.

But they are very good at throwing billions of dollars at companies with a long, rich history of ripping off subsidy programs, then turning a blind eye to the resulting mess. And while the ACP genuinely will help some folks with temporarily lower broadband bills (money is expected to run out in a year or two), it’s a band aid for the actual problem that federal policymakers lack the backbone to actually address.

On the other end, you’ve got Republicans and Libertarians pointing to this dysfunction as justification for government doing absolutely nothing whatsoever about our broadband monopoly problem, which isn’t the answer either. Leaving companies like AT&T or Comcast in a market space with neither competition nor competent regulatory accountability genuinely hasn’t worked out well for anybody.

Combined, it doesn’t take long to realize why telecom monopolies have easily ripped off U.S. consumers and taxpayers for decades, with very little in the way of meaningful reform.

Filed Under: ACP, broadband, broadband affordability, broadband subsidies, digital divide, emergency broadband benefit, fcc, high speed internet
Companies: charter, charter spectrum