ISPs Are Still Ripping Off A COVID Broadband Discount Program
from the oh-look,-telecom-subsidy-fraud dept
During peak pandemic, 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) 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 much in character.
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). But late last year, the FCC Inspector General issued a report saying that ISPs and wireless carriers were consistently and artificially inflating the number of qualified users in order to take taxpayer money they didn’t deserve.
A year has gone by, and another FCC Office of the Inspector General (OIG) report has emerged noting that, yes, ISPs and wireless providers are still ripping the program off. When a low-income user stops using a provider’s broadband service, the ISP is supposed to report this back to the FCC so that funding can be repurposed for folks who actually need it.
The OIG found that’s very often… not happening, and that dozens of ISPs were exploiting the FCC’s lack of follow through:
“We made a startling and troubling discovery: dozens of participating mobile
broadband providers de-enrolled few, if any, ACP subscribers for non-usage and, like Provider X, claimed reimbursement for all or nearly all their ACP subscribers (the suspect providers).”
The OIG also found that a large number of ISPs continue to take taxpayer money for users they never actually served in the first place; part of an ongoing investigation they’ll provide more details on down the road.
There’s an ongoing debate as to whether to renew the ACP program. Generally its been widely supported because it not only helps (some) low-income families, it throws a big chunk of additional taxpayer money into the laps of industry giants.
On the one hand, low-income users genuinely do benefit from a $30 monthly drop in their broadband bill. On the other hand, we’re effectively giving money to giant telecoms in exchange for temporarily lower rates; rates that wouldn’t be high in the first place if these same giants hadn’t spent decades dismantling most meaningful competitors and competent government oversight.
It’s why it’s important to target the real problem with U.S. telecom: consolidated telecom monopoly power (and the corruption that protects it). Instead, the FCC (in this case at the behest of Congress) often engages in regulatory theater, applying superficial external fixes to the symptoms of telecom monopoly power, while rarely taking meaningful aim (or even acknowledging) the underlying disease.
Filed Under: Affordable Connectivity Program, broadband, covid, fcc, high speed internet, low-income families, subsidies, telecom
Comments on “ISPs Are Still Ripping Off A COVID Broadband Discount Program”
Government Subsidized Bait N Switch
It’s a classic supply and demand problem. Government subsidies towards users will prop up the demand, thereby increasing the price. If you want to lower the price, then you need to increase the supply, not the demand. Providing subsidies, while perhaps well-intentioned, is counterproductive.
Re:
Well, do have fun increasing the supply of broadband providers when big telecom giants try to destroy you at every opportunity they can. Did I also mention that they have practically infinite money, control over the courts and the legislatures, and so on? I’d say the best first step in “fixing” this problem would be to:
You know, we could just mandate community-operated broadband everywhere.
Re: Re:
All of those possible courses of action will only be met with colossal legal counter-action by Big Telecom.
This is why the money just should have gone directly to the person and not the company, at least this way the company has less of a chance to rip off the taxpayers as a whole.
Re:
If that’d happened then the ISPs would’ve just raised prices in response to try to negate it. Might’ve not done much, but they’d still do anything to scalp their users — erm, victims.
Charter Spectrum applied $30 relief then raised rates 2x in 3 mos
We have Gig internet only and the included dumb modem.
After Spectrum applied the $30 Covid relief they raised our internet by $15 (July 2023). Two months later (Sep 2023) they raised it another $5.
As our neighborhood just got trenched for fiber (small ISP), this was probably not their best move. It does put me in a better position to convince my neighbors to switch ISPs however.
This is prima facie rent-seeking. How very typical of tyrannical monopolies and other financial predators.
Surprised is no one. And you are right, why aren’t we simply throwing the money at publicly owned open access networks? The 42 billion should prioritize open access middle mile networks. But we can only dream. The ACP has been very helpful for my older brother who lives on disability, but Charter of course is a garbage company and because pricing changes by blocks away addresses they only had impossibly slow service available for low income people or ultra expensive 70-80$ per month service that’s more than he will ever need. Also they force included a land line with his service with no option to opt out despite me asking. It’s just “included”.
Where as 5 miles away where we live we don’t have to have a land line with the service. It makes zero sense.
A locally owned fiber company says they service his apartment complex now and I have been meaning to call and make the change. But I have been dreading the calls to Charter to get the ACP benefit properly removed because it was a pain in the ass to get it applied properly.
The fiber base plan is 250/250 for 50$+ fees.
Re:
Middle? What good is that if the last mile remains a monopoly? It sounds like what we already tried with Verizon.
Much as people hate on AT&T
I am a poors, but as soon as I told the AT&T rep I wanted to be on that program, and had already qualified She was happy to sign me up and even increased the speed for downloading! I have not had to pay them a cent for almost 2 years!
acp should be doubled and made permanent
uncle sam should give the money to people instead of the isp mafia. i know con gress would make acp permanent if it was banned from taking even $1 in legal bribery