Oh Look, More Giant ISPs Taking Taxpayer Money For Unfinished Networks

from the round-and-round-we-go dept

For more than a decade we've highlighted how the U.S. simply adores throwing taxpayer money at giant telecom companies in exchange for networks they then only half deploy. Whether it's on the city, state, or federal level, we've thrown untold billions at mono/duopolies which in turn dodge their obligations under these agreements with little to no real penalty. While sometimes this money winds up being used as intended, just as often this money winds up being pocketed by executives and shareholders with little discernible impact on America's broken and uncompetitive broadband markets.

The latest case in point: both Centurylink and Frontier have informed the FCC they've failed to meet FCC required broadband milestones after receiving millions in taxpayer subsidies:

"CenturyLink notified the Federal Communications Commission that it "may not have reached the deployment milestone" in 23 states and that it hit the latest deadline in only 10 states. Frontier similarly notified the FCC that it "may not have met" the requirements in 13 states. Frontier met or exceeded the requirement in 16 other states. Under program rules, the ISPs were required to bring Internet access to 80 percent of funded locations by the end of 2019 and must hit 100 percent by the end of 2020."

Keep in mind, these deployment goals aren't exactly what you'd call difficult. Under the terms of the FCC's 2015 Connect America Fund Auction, the two ISPs agreed to expand access to DSL at speeds of 10 Mbps down and 1 Mbps (1 Mbps!) up in exchange for big taxpayer payouts. In CenturyLink's case, the company is slated to net $505.7 million annually for six years to deploy service to 1,174,142 homes and businesses in 33 states. For Frontier, the company received $283.4 million annually for six years to bring access to 774,000 locations in 29 states.

Keep in mind these customers aren't even really getting broadband, which is defined as at least 25 Mbps by the FCC. What these territories are getting is overpriced, slow DSL, belched up from somewhere around 2003 or so from two companies that have a long, sordid history of atrocious customer service and a failure to upgrade or repair their aging networks. In most markets that's giving giants like Comcast and Spectrum an even bigger monopoly, resulting in higher rates for all broadband users as competition wanes.

Unsurprisingly, throwing billions at companies for antiquated broadband service (that's never fully deployed anyway) doesn't really fix things. In large part because we don't fully understand the problem we're trying to fix. Despite a lot of claims to the contrary, we don't actually know where broadband is deployed. US broadband maps are notorious garbage, and the telecom lobby has fought tooth and nail against efforts to fix them. Why? It's two-pronged: better maps would only highlight a lack of competition (potentially prompting somebody to actually fix it), and it helps them obscure the waste and fraud on the subsidy end.

Ideally, the FCC would step in here and punish both companies for failing to meet arguably modest goals or not being honest about where broadband is available. But there's little real indication that's actually going to happen. Just ask Verizon, which was given billions in subsidies and tax breaks by countless states and cities in exchange for fiber it never fully deployed. Or AT&T, which routinely receives billions in tax breaks, subsidies, and regulatory favors in exchange for jobs and broadband deployment that somehow never fully materialize. The penalties for both companies have been utterly nonexistent.

There's a chorus of telecom sector sycophants and Trump FCC officials that throw face-fanning tantrums every time some podunk town in Nebraska decides to spend a million bucks to build a better alternative to Comcast. But you'll notice those same folks never have a single sour word to say about the multi-decade tendency to throw billions of dollars at unaccountable monopolies in exchange for networks they never fully deploy. These folks are usually pretty easy to spot: like Pai, just look for the folks going comically out of their way to even acknowledge the limited competition and high prices that plague the US broadband sector.

Were you to do a proper audit of the telecom sector over the last 30 years, I'd all but guarantee the amount of money thrown at the sector could have funded a fiber optic line to every home in America several times over. Instead, thanks in large part to revolving door regulators and cronyism, we've built a system that throws unaccountable billions at giants like AT&T and Comcast, in exchange for substandard broadband, terrible customer service, and an eternal fountain of empty promises.

Filed Under: broadband, competition, dsl, failed obligations, fcc, subsidies, taxpayer funds
Companies: centurylink, frontier


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  • identicon
    Anonymous Coward, 28 Jan 2020 @ 6:29am

    and an eternal fountain of empty promises.

    Hey! I think I found a source of perpetual energy.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 28 Jan 2020 @ 6:40am

      Re:

      Sadly, this won't work for long.

      You can only generate energy by transferring fulfilment from meaningful promises to empty ones. If you have lots of meaningful promises, and lots of empty promises, then you can harness that the differential between the two and use it to generate energy.

      Unfortunately, we're so saturated with empty promises at this point that adding more is only going to reduce the useful energy available.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Jan 2020 @ 6:58am

    'like Pai, they're usually busy going comically out of their way to even acknowledge the limited competition and high prices that plague the US broadband sector'

    dont think it's anything to do with 'those folks' getting 'back handers' from those companies, then? who would ever think such a thing??

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Jan 2020 @ 7:29am

    But without millinos in subsidies the couldn't afford the bribes

    A true audit would look at the money flow, and would probably find that 50-70% of the 'subsidies' that go to Telecom companies end up being spent on lobbying (aka bribes) to prevent competition and keep the monopolies intact.

    Without the huge subsidies, these companies would not be able to afford the level of bribery they have resorted to in the last few years to buy politicians outright (the one from Tennessee is a pure sock puppet, whatever the telecom companies say, she regurgitates in front of the state government (sometimes passing on bills written by the telecom sector, with no editing or revisions... there isn't a more 'bought' politician out there).

    It's a joke, lets give them money so they can give it to the politicians, while claiming they will do what they said they would do 'this time, really'.... it's true you get the government you buy apparently, and the corporations have bought a government of, by, and for the corporation, and screw the individual what did they ever do for politicians, am I right?

    reply to this | link to this | view in chronology ]

  • icon
    Contumacious (profile), 28 Jan 2020 @ 8:09am

    "They don’t care about you at all… at all… AT ALL!"

    "The owners of this country know the truth... it's called the American dream because you have to be asleep to believe it!” ― George Carlin

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 28 Jan 2020 @ 8:43am

    Once again

    Once again, we get the shit Pai.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Jan 2020 @ 9:35am

    Downfall

    I have higher standards then these animals.
    -Adolf on the US telecom industry

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 28 Jan 2020 @ 12:53pm

    Love the comment..

    That China is supporting its corps..
    That is the pot calling the kettle Black.

    The worse part in most of this..
    We pay the corps.
    Corps sell Stock shares with little to no Personal control of the corp.
    Then our taxes goto these corps also..

    THEN they raise prices.
    With all that said, Few have updated, changed, fixed, made things better. And in many cases, made things worse over time.

    So Who is helping the corps More?? At least in China the money isnt from its Own Citizens(mostly) as they export more then import.. And most of the money is coming from the rest of the world.

    reply to this | link to this | view in chronology ]

  • icon
    Wyrm (profile), 28 Jan 2020 @ 2:32pm

    Funny enough, the argument that is regularly pushed forward to prevent public options or public-private partnerships is that "governments fail at everything" and "that's socialism/communism, so it's bad".

    That's willfully ignoring the three easy answers:

    • There are definitely things the government does, even in US, that never questioned. Indeed, only the government can handle these at scale: military, justice, large infrastructure... Internet connectivity could easily be classified at "infrastructure", at least partially.
    • Isn't the private sector completely failing here? How can the government handle it worse than how it's doing now: throwing money at large companies with nothing in return?
    • Isn't it hypocritical to pretend that you can't trust the government for anything then beg for subsidies? Isn't the strength of private companies supposed to be that they can provide better service/products without the help of the government?

    Government don't handle things better or worse. It's a matter of context. Corruption (or "speech" as the SCOTUS called it) is a big part of why a given service fails. It gets entrenched in privilege and monopoly, and stops caring about quality... or sometimes even about providing the service at all. If one starts failing, disruption should be introduced to stimulate the competition. In this case, if the monopolistic/duopolistic companies don't uphold their promises, public options can be introduced to force competition. (And yes, it works the other way around too.) That's not the only solution, but just adding more of the problem (i.e. more subsidies to companies with a track record of not doing their work) will certainly not lead to a better situation.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 28 Jan 2020 @ 4:18pm

      Re:

      ""governments fail at everything" and "

      And they claim private business can do it better and cheaper .... but when one looks at examples of this privatization it seems the price always goes up

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Jan 2020 @ 4:56pm

    Prostitution is the world's oldest profession and Richard Bennett is a well-compensated expert in the field.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 29 Jan 2020 @ 3:59am

      Re:

      Nah, escorts have far more class. Even hookers have some modicum of standards.

      You should see how Richard Bennett is shilling it up in the Ars Technica thread on Comcast failing to invest their Pai-gotten funds. It's a display that would make even the most voracious "3 holes, no waiting" glory hole slut blush.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 29 Jan 2020 @ 7:33pm

        Re: Re:

        I'm pretty morbidly impressed at his mental gymnastics, going from stretching what Comcast actually advertises, to what they actually don't, to "Comcast is improving you're all just too piratey and Brodericky to see it".

        Then again, Bennett appearing on Ars Technica is pretty brave considering that they're even less tolerant of his bullshit. At least on Techdirt the worst that happens to him is his rants get hidden behind clickable text. On Ars Technica, if his shit gets downvoted enough they get nuked out of visibility and the most he can hope for is people quoting him in replies, and even that isn't a guarantee since users have become increasingly careful about that.

        reply to this | link to this | view in chronology ]

  • identicon
    Agammamon, 28 Jan 2020 @ 5:10pm

    You know, if we stopped giving them taxpayer money . . .

    reply to this | link to this | view in chronology ]

  • identicon
    anonEmouse, 29 Jan 2020 @ 2:32pm

    stupid decisions

    Altice deployed fiber optics to this area in early December, yet still offer no services over fiber.. Stupid is as stupid does.
    Greed is rewarded far too much in the broadband industry.

    reply to this | link to this | view in chronology ]

  • identicon
    Wutsinterweb, 15 Feb 2020 @ 7:14am

    Meh, First World problems.

    reply to this | link to this | view in chronology ]


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