California Bill Would Require That AT&T And Comcast Make Broadband Affordable For Poor People
from the actually-helping-people dept
We’ve documented for decades how U.S. telecom is an uncompetitive mess dominated by politically powerful telecom monopolies that see no competition and effectively own Congress. As a result, the U.S. telecom and broadband market is an uncompetitive mess, with Americans still seeing higher prices, slower speeds, spottier access, and worse customer service than in many developed nations.
Generally, U.S. regulators are too captured to even acknowledge there’s a problem. When they do propose a solution, it either involves throwing money at the problem, or developing performative half-measures that don’t take aim at the real problem: monopoly power and the corruption that protects it.
With the Trump administration butchering whatever’s left of federal consumer protection and telecom oversight, states are taking a bigger role in telecom policy. That includes New York State, which, during peak COVID, passed a law mandating that big telecom companies provide low-income state residents with affordable broadband (25 Mbps broadband for $15 a month, or 200 Mbps for $25 a month).
That’s not a huge ask for regional telecom giants that routinely overbill for service.
Telecom giants didn’t much like that, though their legal efforts to kill the law fell short recently when the Supreme Court refused to hear their challenge. Now California is exploring its own, similar, law (AB353), which would require giant telecoms like Comcast and AT&T provide low-income state residents 100 Mbps down, 20 Mbps up broadband for $15 a month.
“Broadband affordability is not an urban versus rural issue, nor does it have to be a partisan issue. We all should agree that broadband is an essential service that must be affordable for all,” California Assemblymember Tasha Boerner said of the law.
The proposal comes after Republicans killed a federal FCC program that provided a $30 discount off the broadband bills of low-income Americans. The Republicans in question claimed they killed the popular program to save money, but a follow up study showed that the program more than paid for itself (by a factor of four) because it helped expand access to remote healthcare, employment, and education.
This is, to be clear, a nightmare if you’re a lumbering giant like AT&T and Comcast, which have carved out lucrative regional monopolies, then glommed onto the federal tit as unaccountable domestic surveillance buddies. They’ve long insisted that any oversight of their business practices is “radical extremism,” and I suspect their lobbyists are extremely hard at work trying to scuttle California’s plan.
But this is, again, a byproduct of these companies’ own making. They’ve worked relentlessly for decades to not only crush regional broadband competition, but to lobotomize federal government oversight. They’re finally on the cusp of achieving this generational victory thanks to Donald Trump, whose government believes that affordable, equitably-deployed fiber optic broadband is “woke.”
Now the only thing that stands between them and unchecked broadband price gouging and predation are a handful of states that occasionally try (with various degrees of success) to do the right thing. And the hundreds of local municipalities that are building their own (usually better, faster, and cheaper) community-owned fiber networks.
I think you’ll find this theme of localism becoming a steady constant drumbeat in the months and years to come. As the corrupt federal kakistocracy fails around us, state and local fights become exponentially more important and heated.
California, despite its well documented flaws on policy, has actually been doing a lot of interesting stuff on broadband. Like using billions in ARPA (COVID relief) bill funding to effectively build a massive new middle-mile fiber network, and fuel a whole bunch of new fiber broadband deployments to neighborhoods long neglected by shitty regional monopolies.
They’re actually targeting the real problem: consolidated monopoly power. That’s being layered with AB353, which just passed the state’s Assembly Communications and Conveyance Committee by a vote of 7 to 2. Combined with a huge looming infusion of federal infrastructure bill broadband grants (assuming they don’t all get siphoned off by Elon Musk, AT&T, and Comcast), and there’s some actual potential for reform here, despite the insanity and ignorance going on at the federal level.
Filed Under: affordability, broadband, california, fiber, high speed internet, low-income, minority, monopoly, telecom
Comments on “California Bill Would Require That AT&T And Comcast Make Broadband Affordable For Poor People”
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Running Out
California has an odd problem where several industries are trying to leave the state. First it was the insurance industry, then the gasoline refineries are going to close. Apparently now California is trying to chase the telecom industry out.
Price controls never work.
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Good riddance, industries that price gouges or damages the environment and customers health should be chased out everywhere.
Here you are once again, stumping for industries that doesn’t give a shit about you except for the fact that to them you are just another money piñata.
But I guess you are just following your usual pattern of wanting to defend the worst of the worst for no real clear reason beside living in a facts optional echo chamber were everyone outside it is the enemy.
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Who pays the cost of tariffs?
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Taking a break from murdering children and deporting citizens to third world countries?
Re: Running Out
Yeah, Musk moved to Texas (before he moved into the White House). And that worked out so well for him.
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The alternative is to let the telecom industry do whatever it wants, but that doesn’t work, either.
So price control it is.
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No; that’s just one (bad) alternative. There are others. For example, California could forbid physical-network operators from providing retail internet access services, and require those operators to offer the same terms to all ISPs who’d use their networks. If those terms end up reasonable, no government would need to get involved in adjusting them. (And this would also address the general problem of monopoly, which price controls don’t.)
There’s no good reason to predict that any such idea would result in California ending up with no viable telecommunications companies. Companies will build refineries and such wherever is cheapest; their locations are, to a large extent, fungible. Network operators have to go where their customers are, and there’s still no sign of many residents leaving California due to these laws.
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Your absence speaks much louder than your words.
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Oh my god, but if the big ISPs leave, the poor citizens will have to pay municipal broadband prices with the infrastructure that tax subsidies have already paid for! What will those poor people do with all the money they save? Human sacrifice, dogs and cats living together, mass hysteria!
How about just encouraging a lot of competition and make broadband affordable for everyone?
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Hasn’t worked so far. Why would it work now?
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It did work: there was a shitload of competition in dial-up internet service, because any idiot could buy access to the infrastructure on the same terms as anyone else. (At least till the telcos started running their own semi-privileged ISPs; but it wasn’t till high-speed networks appeared, and the FCC abandoned rules requiring third-party access, that the competition really went away.) People often had dozens of small ISPs within their local-calling areas.
What American government has tried anything like that since? Maybe a few municipalities; and according to past Techdirt stories, some of these open-access networks are working very well indeed, providing real competition and low prices for everyone (in at least one case, completely free service for low-income people). In some countries, that’s forced by regulation on a much larger scale, and they have effective competition—with ISPs that people actually like.
Re: sadly..
Most of the entrenched ISPs have cut sweetheart deals with localities that effectively let them lockout potential competitors from pole access to string their own lines, etc. City/county-wide version of the apartment block owner locking the tenants into Provider X, who’s usually providing some kickback based on percentage of tenants they get signed up.
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What exactly did you think they were doing long-term?
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Is that actually happening in a useful way, or just planned? In particular, I fear it could end up like the title 2 subsidy abuse Techdirt reported on repeatedly? (In summary: the ISPs took money to build “common carrier” networks, but somehow managed to keep any competitors from ever getting access.)
I agree that the stuff described by the linked story does sound pretty good. Especially the last-mile connections, if they end up open-access.
Government picking business winners and losers again…
This needs to be applied to ALL internet providers operating in the state to be fair.
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Have they all received millions and billions in tax payer funds and used it on hookers and drugs instead?
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Not quite. Following the example of glorious leader Bender Bending Rodriguez, I spent it all on hookers and blackjack.
More seriously, I ran an ISP which leased dialup lines for many years. But oddly enough, the wholesale rates for those lines kept going up until they surpassed the retail rates. And then they kept going up. And up. That made it impossible to compete on price, doubly so when the companies involved offered 1- or 2-year deeply discounted deals to new customers. We tried offering DSL for a while, but curiously, the same pattern repeated. Funny how that works.
And here’s the icing on the cake: after economically forcing us (and a couple of our competitors) out of market, the telco in question decided circa 2016 to abandon it. They shut down the copper plant — which means no dialup, no DSL — and replaced it with: nothing. And now all those people have been left trying to convince a cableco to run lines (which they don’t want to do) or trying to use cellular service (flaky) or trying to use satellite service (flaky and expensive).
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Great point. Holding small independent telephone companies and rural ISPs with fewer than 50,000 subscribers to the same standard as AT&T is only fair and does not in any way pick winners and losers. You are very intelligent.