from the do-not-pass-go,-do-not-collect-$200 dept
The Infrastructure Investment and Jobs Act (IIJA) set aside $42.5 billion to be spent by the states on expanding access to affordable broadband. But state by state, telecom lobbyists are working hard to ensure that this money only goes toward “unserved” locations, and can’t be used to potentially create competition in markets they already serve.
Last month we noted how states like Illinois, at the direct demand of companies like AT&T, have been passing restrictions on who can or can’t access these funds. That includes blocking some cooperatives or local governments from building broadband networks. Since that’s expressly forbidden by the IIJA, these states are risking all broadband funding
In other instances it’s a bit more subtle than that. Missouri, for example, just passed a bill (once again directly demanded by AT&T) stating that “no federal funds received by the state, political subdivision, city, town, or village shall be expended for the construction of retail broadband internet infrastructure unless the project to be constructed is located in an unserved area or underserved area.”
On its face it doesn’t seem controversial. But if you know how the U.S. telecom sector and policy actually works, its intention becomes more clear. The bill doesn’t just block funding for areas that are already served, it blocks access to projects in areas incumbent ISPs claim they might serve someday:
the current version of the bill would allow incumbent ISPs to block federal funding to competitors if they vaguely indicate they have eventual interest in upgrading an area. Historically, state and federal regulators in fealty to regional monopolies aren’t consistent about following up on fiber deployment promises, potentially perpetuating longstanding Internet access coverage gaps.
So basically, if you’re trying to get a grant to help fund a new broadband project in Missouri, you have to ask the regional monopoly’s permission. Said monopoly can promise that an area is already on the calendar for upgrades, but because state and federal telecom regulators can rarely be bothered to follow up on promises or punish telecom giants for empty promises, this is all largely for show.
U.S. broadband isn’t just plagued by a lack of access, it’s plagued by a lack of affordability thanks to monopolization and lack of competition. Telecom giants (who enjoy hoovering up billions in subsidies for rural broadband deployments that routinely fail to materialize) very much like policy models that focus exclusively on the former, for what should be obvious reasons.
Here’s the other problem: U.S. broadband maps suck. Big telecom knows they suck, and has fought tooth and nail against improving them, because that would only further highlight monopolization and limited competition, further prompting lawmakers to do something about both. As such, our definitions of “unserved” and “underserved” are already woefully broken, by design.
When a community applies for a federal grant to improve local broadband access, they’ll then routinely face arbitrary and costly challenges by incumbent ISPs, who’ll then point to data they know understates the scope of the problem, to declare that these broadband improvements are “duplicative” and unnecessary. For many states, fighting these challenges is technically or financially impossible.
Add in the growing number of state restrictions on how the funding can be used (in stark contrast to federal rules), and you’ll start to see the level of shenanigans afoot to prevent the money from funding beneficial competition. Ironically, this will happen most frequently in GOP-controlled states by lawmakers who’ve recently professed a superficial interest in “antitrust reform.”
So while there’s $42.5 billion in IIJA Act funding (and billions more in COVID relief funding) being aimed at improving U.S. citizen access to affordable broadband, big telecom has taken to exploiting state regulatory capture to ensure that money doesn’t go to (gasp) competitors that might result in them having to (double gasp) charge more reasonable rates.
This is going to be the norm across much of the country the next few years, and it will be interesting to see how hard federal policymakers push back against states, clearly largely interested in AT&T and Comcast campaign contributions, looking to gum up the funding process to incumbent benefit.