FCC Gives ISP $8,000 To Deliver Broadband Five Feet From Apple's $5 Billion Campus

from the wasted dept

We've noted repeatedly that there are two major reasons US broadband is slow, spotty, and expensive: regional monopolization (a lack of competition), and the state and federal regulatory capture (corruption) that protects it. On the latter front, there's been an absolute army of telecom industry aligned folks, who, for decades, have relied on dodgy broadband availability maps and dubious data to not only pretend there's no real problem that needs fixing, but also to slather companies with subsidies without ensuring that money actually goes toward fixing the problem.

Last fall, the FCC held a reverse auction doling out nearly $9 billion from the FCC's Rural Digital Opportunity Fund (RDOF), paid into via Universal Service Fund (USF) contributions affixed to your broadband and phone bills. To be very clear: some of this money will absolutely help shore up access in underserved communities. But after digging into the FCC maps of the winning bidders, consumer groups found a long list of examples where we were throwing billions of dollars at companies for deployments that make no sense.

For example, Free Press noted that Elon Musk, the second wealthiest man on the planet, managed to game the FCC system and nab $886 million in ratepayer subsidies for his Starlink system. And he did it by promising the FCC that his company would bring broadband to essential US areas like... already connected airports and highway traffic medians:

"As we have documented in our previous two posts, however, this effort to close the rural-broadband digital divide looks more and more like one of the most wasteful projects in FCC history."

While some of this grift will be cleaned up in a second round of FCC application review, you can't blame this on "we didn't know," or "the system just needs tweaking." We've thrown countless billions of dollars at telecom incumbents for fiber networks routinely only half completed. It's a policy choice. Now we're giving billionaires who don't need the money, even more money to deliver service that's inferior to the fiber networks most of you already paid for.

The problem is pervasive. Light Reading, for example, noticed this week that a small wireless ISP by the name of LTD Broadband is poised to get $8,000 from the FCC to deploy 1 Gbps service five feet outside of Apple's $5 billion new headquarters:

"RDOF funds will go to serve areas adjacent to the brand-new Apple Campus in Cupertino," complained the Competitive Carriers Association (CCA) to the FCC in a recent filing. "Far from 'unserved,' the Apple Campus is one of the most connected places in the entire world."

LTD nabbed $1.3 billion in promised federal payments to build broadband across 13 states. But the company is one of several that's getting FCC funds that don't make sense, for service it's not clear they can even successfully deploy:

"LTD is one of several major RDOF winners that has faced withering criticism that it will not be able to meet its RDOF obligations. "There is no indication that LTD [Broadband] has the technical, engineering, financial, operational, management, staff or other resources to meet RDOF build-out and service obligations," wrote the Minnesota Telecom Alliance and the Iowa Communications Alliance in a recent joint filing to the FCC."

And while there have been spotty efforts to improve both mapping and subsidization, they always seem just around the next corner or a few years down the road. So when you see guys like the FCC's Brendan Carr whine about how "big tech" needs to give billions of dollars to "big telecom" for no coherent reason, notice how he excludes the fact that fixing the money trough that is US telecom subsidization should probably be tackled first. As Ajit Pai showed, pretending you care about the "digital divide," while simultaneously making the corruption and monopolization that created it worse, remains very fashionable.

Again, many subsidies have certainly gone to very promising projects that provide direct and immediate aid to underserved areas neglected by regional giants. But at the same time, federal and state US taxpayers have likely paid enough in subsidies over the last few decades to deliver fiber to every home in America several times over (not that we'd ever bother to do a comprehensive audit). Instead of getting that fiber, Americans get a very expensive hamster wheel that's about 40% incompetence and grift.

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Filed Under: broadband, corruption, covid, digital divide, fcc, oversight, rdof, rural digital opportunity fund, subsidies, universal service fund, usf


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  • identicon
    Anonymous Coward, 17 Jun 2021 @ 12:49pm

    Insert NoSuchAgency monitoring equipment here...

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 12:50pm

    $8000 sounds like a lot but it's not really.

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

    • identicon
      Anonymous Coward, 17 Jun 2021 @ 1:20pm

      Re:

      The idea is that this is pointless spending for at least some of the money they receive; a more absurd example of a decrepit system for illustration purposes.

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

    • icon
      Boba Fat (profile), 17 Jun 2021 @ 9:34pm

      Re:

      Just digging a hole across the street would cost $8K in permits and labor.

      The claim that because Apple is next door anyone can get broadband is ridiculous. Apple no doubt has their own Tier 1 network drop and they don't have to share it. Comcast is the only option for much of the south bay, since AT&T advertises fiber but "doesn't yet serve your area" when you try to get it.

      LTD is a PTMP provider. In Cupertino they would probably connect to a local Tier-2 or -3 network (which is available but not to the home) and set up wireless systems like those from Mimosa. So $8K would probably cover local permits, power, and a pole or two. I used a similar ISP in Santa Clara and was quite happy with it (and it was cheaper than LTD is advertising in rural Minnesota).

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

    • icon
      PaulT (profile), 17 Jun 2021 @ 11:02pm

      Re:

      More than zero is a lot under the circumstances. Meanwhile, that amount would cover at least one or two domestic households who actually need the work done to supply them.

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 1:16pm

    Karl, where Starlink installs ground stations will be where they can get a good backbone connection. They will likely ring underserved areas, like Indian lands, with base station, so that they can serve satellites while they are over those lands. What Starlink builds is their connection to the Internet, for multiple satellites serving customers anything up to several hundred miles away. So where they build, and where they intend to serve are not the same area.

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

    • identicon
      kallethen, 17 Jun 2021 @ 1:23pm

      Re:

      And, at least Starlink is doing something for rural areas. Can't say the same of the traditional ISPs who just take money and not bother to follow through.

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

    • identicon
      Anonymous Coward, 17 Jun 2021 @ 1:24pm

      Re:

      Everyone else, even Starlink, knows how many customers they can serve, and in what areas, and it isn't all that many. It does absolutely nothing for under-served urban areas, where people couldn't affor the thing anyway.

      It will be good at what it does, but it won't do all the stuff the cheerleaders imagine the invisible pink Starlink in the garage will do.

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 1:25pm

    "There is no indication that LTD [Broadband] has the technical, engineering, financial, operational, management, staff or other resources to meet RDOF build-out and service obligations,"

    Honestly, at this point, they could give the money to some rando on the street to build an ISP from nothing and lay fiber and build networks, and get more bang for the buck.

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

  • icon
    OldMugwump (profile), 17 Jun 2021 @ 1:30pm

    Never attribute to malice...

    ...that which is adequately explained by incompetence.

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

  • icon
    OldMugwump (profile), 17 Jun 2021 @ 1:43pm

    Big fat woman

    Suppose there's a big enormously obese woman walking down the street, with dozens of overstuffed pockets filled with $20 bills, which randomly fall onto the street.

    You follow along behind and observe this. People go up to the woman (who looks remarkably like FCC chair Jessica Rosenworcel) and try to tell her she's dropping money on the ground, but she angrily brushes them away and continues as before.

    Wouldn't you, at some point, start picking up those $20 bills and putting them in your pocket? If you don't, surely other bystanders will.

    This appears to be a part of Elon Musk's modus operandi - he did it with EV credits, he's doing it with space launches and CO2 credits, and now with RDOF money.

    I find it hard to criticize Elon for this - it's hardly his fault. At least he spends the money doing important stuff.

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 2:57pm

    Throwing money at everyone and praying it to accomplish at least something of the intent, isn't a very cost-effective way to subsidize anything.

    Yes it's unregulated and for some reason that's fine, but at least try to be smart about it and have some kind of plan of where to develop they need to follow in order to get that free money.

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 3:01pm

    Starlink will serve maybe 200k users in America
    It doesn't change the fact that many Americans have only one choice of broadband provider and many rural areas have no source of broadband
    and republicans are still trying to block community broadband projects

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

  • icon
    fairuse (profile), 17 Jun 2021 @ 4:50pm

    Class Warfare

    Class Warfare at it's best.

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

  • identicon
    Anonymous Coward, 17 Jun 2021 @ 6:03pm

    Digital! Digital divide!

    A traffic median is NOT DIGITAL!

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

  • identicon
    Anonymous Coward, 18 Jun 2021 @ 10:13am

    Far from 'unserved,' the Apple Campus is one of the most connected places in the entire world."

    So what? Does Apple run open wifi or something? Techdirt's often had stories on how people are "five feet from" excellent connections and can't get anything more than ancient DSL, if that. This certainly includes stories where an ISP wanted to charge $8000 to extend their network from a neighboring property.

    What do you want done here? Apple's big enough that it's almost certainly not dealing with an "ISP". Should anyone running private fiber lines be forced to become an ISP and service nearby areas? Should an area be considered "served", and ineligible for subsidy, just because some nearby rich people have a really good connection? I recall ISPs and the FCC have been criticized for that on Techdirt.

    As a point of comparison: in Canada, Bell received subsidies to provide broadband to a neighborhood of million-dollar cottages, one of which just happens to be owned by their former CEO. Of course, they didn't extend it to the nearby neighborhoods, which are some of the poorest in the province.

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

  • icon
    Lostinlodos (profile), 19 Jun 2021 @ 1:04pm

    Oh, wait…what?

    LTD broadband doesn’t operate on the west cost from what I can tell. They’re a Mid-Central states company.
    Correct me if I’m wrong.

    But how does a company operating in Nebraska and Iowa get a contract for just-off the apple campus?

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


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