Telecoms To Get $45 Billion In Taxpayer Broadband Subsidies, But Are Whining Because They Might Have To Deliver Affordable Broadband To A Few Poor People

Broadband

from the greedy-telcos dept

The 2021 infrastructure bill is throwing more than $42 billion at America’s mediocre broadband networks. And while a lot of that money will be put to good use shoring up fiber, a lot of it is being dumped in the laps of regional monopolies with a long, long history of taking subsidies in exchange for broadband networks they repeatedly, mysteriously, leave half completed.

Companies like AT&T, Charter, and Comcast that, thanks to years of anti-competitive behavior and lobbying, enjoy regional monopolies, limited oversight, and all that results (spotty access, high prices, slow speeds, and comically terrible customer service).

So not too surprisingly, there’s some fairly basic requirements affixed on this infrastructure bill money. The feds are preferring that the money be used to help build future-proof fiber networks. Some states (like Washington) are also urging the construction of “open access” networks, which allow numerous ISPs to come in and compete in layers, driving down prices.

To be clear, the NTIA rules affixed to the $42 billion in infrastructure subsidies allow states to ask that in exchange for this massive handout, ISPs make an effort to ensure they’re providing low-income users in those areas some kind of lower-cost option. And telecom giants like AT&T, Comcast, Charter, and Verizon are successfully lobbying states to have those requirements killed.

The feds themselves aren’t engaging in “rate regulation,” though this is how it’s been framed by telecom lobbyists and the politicians who love them. AT&T lobbyists have gone state by state, having success in states like Virginia threatening them to eliminate requirements that ISPs provide lower-cost service for poor people, or they’ll take their ball and go home:

“In Virginia, AT&T warned the state in a legal filing last September that strict pricing requirements “would be contrary to good public policy, lead to litigation and more importantly will discourage provider participation.” The company requested that “any rate regulation language be removed” from Virginia’s blueprint.”

If you’re a regular Techdirt reader, you probably know that AT&T has an extremely long history of taking taxpayer money, subsidies, tax breaks, and other federal favors, then making a sort of farting sound when asked to do much of anything (including actually delivering on a broadband network or new jobs).

That they’re being asked to do some basic things to get taxpayer money shouldn’t be seen as onerous notes Gigi Sohn, the popular telecom sector reformer whose nomination to the FCC, you might recall, was scuttled by a coordinated GOP and telecom industry smear campaign:

“This is a requirement in exchange for a humongous government benefit,” said Gigi Sohn, executive director of the American Association for Public Broadband, which advocates for low-cost options. “The kind of notion that government can require something in exchange for giving out billions of dollars, that’s standard.”

The state requirements aren’t a big deal. And decades of lobbying and dodgy court rulings have left most states without the staff or regulatory firepower to actually enforce requirements anyway, so it’s unlikely that telecoms would have faced any real penalty should they have half-assed it.

But big ISPs are absolutely terrified of even the faintest idea that anybody in government would so much as think about “rate regulation” (or any attempt to stop them from exploiting their regional monopolies to rip off captive customers). Even if, thanks to regulatory capture and widespread U.S. corruption, that hasn’t been a serious threat to their regional fiefdoms any time in the last quarter century.

Most state and federal regulators are so corrupt and captured, they can’t even publicly admit that monopoly power and consolidation has resulted in competitive market failure, much less propose any real solution to it. So what we get instead are these sort of bare minimum half efforts; and even that results in no limit of ceaseless whining by these pampered, widely disliked telecom giants.

Giants who find it trivially easy to throw a few hundred thousand dollars at corrupt state and federal officials to ensure that even the most basic requirements affixed to taxpayer money are rendered inert.

Filed Under: affordable access, broadband, infrastructure bill, subsidies, telcos
Companies: at&t, charter, comcast, verizon