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Telecom monopolies are poised to waste the U.S.’s massive new investment in high-speed broadband

Your Wifi could be better soon. But don't hold your breath.

 

Karl Bode

Tech

Posted on Jun 30, 2022

U.S. broadband has always been mired in mediocrity. Despite decades of political promises and untold billions in industry subsidies, U.S. broadband is plagued by slow speeds, high prices, and spotty coverage. With billions more in new subsidies coming from new infrastructure and COVID-19 pandemic relief bills, there’s both newfound hope for raising the bar—and ample indication that history will only repeat itself. 

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At the heart of the problem sits U.S. telecom monopolies, which hoover up billions in taxpayer subsidies, then undermine oversight of how that money is spent. The end result: a multi-decade project to shower the very companies responsible for the digital divide with cash and favors, then act repeatedly surprised when more progress hasn’t been made.

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Depending on who you ask, somewhere between 21 million and 42 million Americans lack access to broadband. Another 83 million currently live under a broadband monopoly, with just one ISP to choose from. This lack of competition results in high prices, terrible customer satisfaction rates, and U.S. broadband metrics that are well behind many developed countries.

Policymakers have worked for decades to bridge this so-called “digital divide,” most commonly by showering telecom monopolies with incentives. The General Accounting Office (GAO) estimates that between 2009 and 2017, the federal government spent $47.3 billion to expand broadband access. Tens of billions more have been spent by states trying to shore up access.

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While FCC data claims the government expanded broadband access to 2.3 million locations during that period, actually measuring that improvement has proven difficult. Telecom lobbying not only ensures that deployment standards remain low, but that mapping U.S. broadband coverage gaps—and measuring deployment success—is a steep, uphill climb. 

And even if that number is accurate, it still left tens of millions of people lagging behind. 

Most Americans only have the choice of a cable monopoly—usually Comcast Xfinity or Charter Spectrum. These cable giants enjoy such a dominant position, they added 95 percent of all new broadband subscribers last year. They often see little competition at faster broadband speeds, thanks to regional phone companies that have lagged on upgrading their DSL lines to fiber. 

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Many of these phone companies, like Frontier Communications, enjoyed years of subsidies and tax breaks for fiber networks state residents claim were never fully deployed. In West Virginia, a state ranked 47th in broadband connectivity, Frontier remains the dominant ISP despite numerous investigations and a bankruptcy caused directly by fiber under-investment.

Frontier, Comcast, and Charter did not respond to Daily Dot requests for comment.

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Experts suggest this mindless pampering of sector giants—often with limited tangible results to show for it—is the direct and obvious cause of substandard U.S. broadband. Despite this, U.S. policymakers often refuse to even acknowledge monopoly harm, in part because these giants are closely tethered to U.S. intelligence gathering and line campaign coffers

Leveraging this apathy, the telecom lobby has waged an effective campaign to lobotomize the agencies tasked with telecom oversight. Most notably via the 2017 net neutrality repeal, which didn’t just eliminate rules limiting anticompetitive behavior, but gutted much of the Federal Communications Commission’s (FCC) consumer protection authority. 

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Consumer groups like the Electronic Frontier Foundation argue that at the root of U.S. broadband problems sits pathetic broadband standards and definitions dictated by industry. Systems and standards are designed not to improve access, but to downplay or obscure limited competition, market failure, and unfulfilled promises.

Originally, the U.S. defined broadband as anything over 200 kilobit per second (kbps) in either direction. In 2010, U.S. policymakers redefined broadband to an only slightly better 4 Megabit per second (Mbps) downstream, 1 Mbps upstream. It was updated again in 2015 to a still outdated 25 Mbps downstream, 3 Mbps upstream, where it remains today.

Such speed standards aren’t representative of modern reality, where multiple-user households embrace 4K gaming and simultaneous Zoom calls. Substandard speeds have proven particularly problematic during the COVID era, when remote work, online schooling, and telemedicine became more important than ever. 

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Telecom giants opposed each and every improvement to the nation’s dated broadband definitions. With standards set at ankle-height, ISPs can artificially inflate both coverage and connection quality, obscure competition and deployment gaps, and more easily try to convince regulators that there’s no actual problem in need of fixing.

“The FCC’s 25/3 metric is not only a useless metric, it is an actively harmful one,” the EFF recently warned. “It masks the rapid monopolization of high-speed access occurring in the United States and obscures the extent to which low-income neighborhoods and rural communities are being left behind. And, it attempts to mask the failures of our telecom policy to promote universal broadband.”

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The General Accounting Office has also issued studies showing how the current 25/3 Mbps definition of broadband is too dated to be useful and harms government policy. But still, many subsidies are often tied to an even lower standard: 10 Mbps. 

Efforts to update to a uniform, modern symmetrical 100 Mbps have been consistently opposed by sector lobbyists. 

Should the U.S. set the bar at 100 Mbps, it would immediately illustrate how countless ISPs—particularly rural telcos still selling expensive, sluggish DSL—aren’t even technically offering “broadband.” Higher standards would also showcase the clear harm of monopolization, and how a lack of meaningful broadband competition results in slow speeds and high prices.

Instead, policymakers have embraced a broadband policy paradigm in which industry giants receive billions upon billions in subsidies in exchange for doing nothing or the bare minimum. Monopolies aren’t keen on that dynamic changing anytime soon. 

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“I have been doing this for over 20 years and I can say that every single time there has been an effort to raise the speed standard, we have seen a huge lobbying pushback against it,” Harold Feld, Senior VP of consumer group Public Knowledge, told the Daily Dot.

In 2014, AT&T and Verizon urged regulators to keep the definition of broadband set at 4 Mbps indefinitely, claiming a 10 Mbps benchmark would be too ambitious. Providers also fought against the 2016 decision to redefine broadband as anything faster than 25 Mbps, and have more recently fought against efforts to further boost the definition to 100 Mbps.

As a result of low standards, countless millions of Americans are cut off from the medical care, job opportunities, home-education options, and other advantages modern broadband speeds deliver. They’re stuck on “good enough,” expensive service, something that’s particularly painful for marginalized communities and those already struggling to make ends meet.

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Subsidies also don’t wind up where they’re needed due to historically terrible FCC broadband maps, experts say. For years the FCC determined a census block “served” by broadband if a regional monopoly claimed it could offer service to just one home in that block. The FCC also routinely failed to verify the accuracy of ISP availability data.

The end result is a $350 million, wildly misrepresentative FCC broadband availability map that provides an illusory look at the state of U.S. broadband coverage, quality, and competition. While Congress demanded the FCC fix these issues with the passage of the 2020 Broadband DATA Act, these improvements still remain far over the horizon.

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Feld noted that telecom monopolies prefer inaccurate mapping data, because, as with dated speed definitions, it helps them obscure the obvious result of unchecked monopoly power. Change here has also been stymied by telecom lobbying opposition.

Both U.S. political parties have been historically poor when it comes to standing up to broadband monopolies or fighting sector consolidation. But historically the Republican party has sided with industry giants like Comcast and AT&T in strict lockstep for decades, Feld said.

“Republicans sided with industry against every proposed change to make the maps more accurate until the political pressure became too great,” he said.

The result are federal programs perpetually and comically uncertain as to whether they’re actually fixing the problem they were created to address. The Wall Street Journal recently noted how poor monitoring of these programs often results in redundant efforts to shore up access to the same areas, often somehow without actual improvement. 

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The same ineptitude often plagues U.S. tax policies, long criticized as overtly favorable to the country’s biggest telecom monopolies.

For example, AT&T received an estimated $42 billion as part of the U.S. government’s 2017 corporate tax cuts. In exchange, the company promised billions in new fiber investment and thousands of high-paying jobs. Instead, AT&T trimmed network investments in the years that followed and laid off an estimated 50,000 employees since 2017. 

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Long-time industry watchers like Feld are quick to point out that this type of government incompetence is a feature, not a bug. It’s the direct byproduct of decades of lobbying by telecom monopolies eager to build a system of subsidization and lax oversight that serves them, not the public interest.

“We had major providers who gladly took the money and simply didn’t build out, and suffered virtually no consequences,” Feld said.

It took a pandemic to see even a modest change to this dynamic. Photos of children huddled together in the dirt outside of fast-food restaurants just to attend class, combined with painful telecommuting and home education experiences for many, drove a significant shift in U.S. broadband policy making—at least for the short term. 

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The net result was $42.5 billion broadband investment courtesy of the Infrastructure Investment and Jobs Act, and billions more in broadband funding via the American Rescue Plan Act. Public anger at substandard broadband during COVID lockdowns also sparked an explosion in U.S. towns and cities looking to build their own broadband networks.

Here too local communities routinely run face-first into telecom lobbying and the corruption that protects it. Many states, at the direct behest of industry giants, have passed laws banning or restricting such networks. Such laws often derail some of the only creative, competitive local challenges seen by politically powerful regional monopolies. 

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Lobbyists for telecom giants are also busy convincing some states to funnel new infrastructure grants into their pockets and away from potential competitors. Missouri and Illinois lawmakers just passed restrictions ensuring that local towns and cities can’t use federal grant funding to build networks that could threaten monopoly power. 

So while a historic influx of new broadband funding is certain to help, without addressing inadequate standards, inaccurate mapping, regional monopolization, state and federal corruption, or ongoing efforts by telecom lobbyists to gridlock the nation’s top telecom consumer protection regulator, the underlying dysfunction itself cannot change.

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“The basic attitude toward the broadband industry by too many elected representatives has been to treat the industry like indulgent parents to spoiled six-year-olds, giving the industry treats and punishing anyone who tries to hold the industry accountable,” Feld said.

And that’s unlikely to change soon.


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*First Published: Jun 30, 2022, 12:39 pm CDT