More Subsidies Alone Wont Fix What Ails US Broadband
For decades, U.S. taxpayers have thrown countless subsidies, tax breaks, and other perks at entrenched broadband monopolies, hoping that this time we’d finally put that pesky “digital divide” to bed. And while there certainly are countless communities that have been helped by taxpayer-funded projects, there are just as many examples where this money was effectively wasted by unaccountable telecom
monopolies, which often receive millions to billions in handouts in exchange for fiber networks that are routinely only half-deployed.
The reason for our failure should be fairly obvious by now. More often than not, telecom giants face little real scrutiny for their subsidy spending decisions by federal or state lawmakers, most of which are in these monopolies' back pockets. The end result: state and federal lawmakers and regulators that tend to downplay the scope of U.S. telecom market failure, refuse to hold telecom monopolies accountable, and refuse to acknowledge that boring, ordinary corruption is truly why, decades in, American broadband is some of the slowest, patchiest, and most expensive in the world.
Under the Trump administration, this corruption problem was personified to almost comedic effect, with federal regulators literally often indistinguishable from telecom lobbyists. While it shouldn’t be hard for a Biden administration to outperform the mindless Comcast, ATT and Verizon ass kissing that was Trumpism, whether the administration will have the courage to stand up to U.S. telecom monopolies remains to be seen. What is clear is that the incoming administration will be making throwing more subsides at the industry one of its highest priorities:
“Their first major opportunity could come as part of a new coronavirus stimulus package, a top priority for Biden as he prepares to enter the White House in January. The president-elect previously endorsed a House-passed relief bill that includes $4 billion in emergency funds to help low-income Americans stay online in a pandemic that has left tens of millions out of work and strapped for cash. Biden also reaffirmed his commitment to universal broadband on Tuesday as part of a broader preview of his economic-recovery agenda.”
To be clear, including some broadband help that actually reaches end users would be a good thing. And subsidies by and of themselves aren’t necessarily bad. But while the original CARES Act may have been well-intentioned, it included some unrealistic timelines that forced many areas to either rush to spend taxpayer money in haphazard ways, or return it to the government. A follow up proposal that brings some relief to Americans and smaller broadband providers would be welcome. COVID-19 has, after all, brought the issue of broadband into stark relief to those (for whatever reason) who hadn’t yet realized that the technology is essential, and our efforts so far have been decidedly half-assed:
“Students can’t go to school without it. Patients can’t engage in telehealth without it. Governments can’t reach all their citizens with the services people expect unless there is access to it,” said Brad Smith, the president of Microsoft, in an interview. “If there is a silver lining in 2020, it is that all of this has become clear to people. The problem was here before; it just wasn’t as understood as it is now.”
Again though, more subsidies doesn’t do a whole lot if you’re not effectively tracking where broadband is or isn’t available, or where subsidies are spent. We’ve noted more times than we can count that the FCC’s broadband maps are (often by industry lobbying design), effectively useless for actually measuring U.S. broadband; more subsidies can’t fix a problem if you don’t know what the problem is.
More subsidies don’t really address the fact that more than half of Congress is literally a rubber stamp to every fleeting whim of ATT, Comcast, Verizon, Charter, and T-Mobile. Nor can it fix the fact that in many states, corruption is so rampant that telecom giants literally and routinely write anti-competitive telecom law, or state ordinances that hamstring communities' right to make local telecom infrastructure decisions for itself.
More subsidies can’t fix the Trump FCC’s net neutrality repeal, which effectively neutered the agency, making it harder than ever for it to hold incumbent telecom monopolies accountable for much of anything. In fact, if Congress rushes to confirm Nathan Simington, then blocks the appointment of a Democratic Commissioner, the FCC could remain gridlocked at 2-2, and effectively impotent for at least two years. More subsidies can’t fix that.
More subsidies don’t address the fact we routinely, repeatedly, rubber stamp competition and job killing megamergers that all but ensure Americans continue to pay some of the highest-prices in the world, something that was already a problem before a massive economic and public health crisis. More subsides don’t fix our broken antitrust enforcement mechanism that whistles while looking the other direction as merger after merger is gleefully approved, and the resulting domination crushes innovative smaller companies.
Telecom giants have a complete and total stranglehold over telecom policy making on the state and federal level. Yet year after year, we refuse to address or tackle this corruption, let monopolies dictate the lion’s share of U.S. telecom policy, and then stand around with an idiotic look on our faces wondering why the U.S. remains a broadband backwater after throwing so much damn money at the problem.
Author: Karl Bode
Date: 2020-11-30
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