Lawmakers Question Why FCC Is Throwing Taxpayer Money At Incompetent Telcos With History Of Fraud

from the repeat-the-same-mistakes dept

In West Virginia, incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. State leaders have buried reports detailing the depth of the grift and dysfunction, and, until a few years back, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest. The result has been about what you'd expect: West Virginia routinely shows up as one of the least connected states in the nation.

Frontier has spent years taking taxpayer money then failing to adequately upgrade its network. So when the FCC recently threw another $9 billion in subsidies at the broken U.S. telecom sector, lawmakers like Republican Sen. Shelley Moore Capito, were kind of annoyed to find Frontier again slated to get $371 million to "expand broadband" across eight states. $250 million was doled out to Frontier in West Virginia despite its shaky history in the state, something that alarmed Capito in a letter to the FCC last week (pdf):

"The stakes are simply too high to provide nearly $250 million to a company that does not have the capability to deliver on the commitments made to the FCC."

Consumer groups have also been hammering the FCC, calling its latest auction a "boondoggle" in which ISPs exploited a broken system to obtain money that, with a few exceptions, won't actually fix broadband availability issues. Capito went on to correctly note that with Frontier's history of very recent incompetence and grift in West Virginia, throwing more money at the company and expecting some different outcome is foolish:

"Frontier's mismanagement of prior federal funding through the Broadband Technology Opportunity Fund program, resulting in $4.7 million in funds repaid to the federal government for improper use, raises significant questions about their ability to manage federal funds of this magnitude. Furthermore, Frontier has a documented pattern of history demonstrating inability to meet FCC deadlines for completion of Connect America Fund Phase II support in West Virginia. The inability to deploy federal funds in a timely fashion to make improvements to a network delivering broadband service at speeds of 10/1Mbit/s or higher should raise significant concerns about their capacity to build out a network delivering 100 times that level."

As we've noted a few times now, the U.S. seems intent on throwing taxpayer subsidies at companies with a long history of failing to live up to their promises despite 30 years of this not really working out that well. What we don't appear to have any interest in is actually tackling the real reason U.S. broadband sucks: a handful of powerful regional monopolies have cornered their respected markets, then successfully lobbied state and federal policymakers to look the other way and pretend none of this is actually happening. It's a textbook case of monopolization and regulatory capture. And we couldn't care less.

As COVID lockdowns highlight broadband's essential role in connection and survival, pressure will only mount to throw even more money at industry. But unless policymakers take aim at the underlying corruption protecting the status quo, history will only repeat itself.

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Filed Under: broadband, competition, fcc, fraud, shelley moore capito, subsidies
Companies: frontier


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  • identicon
    Pixelation, 17 Dec 2020 @ 7:30am

    Regulatory. Capture.

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

  • identicon
    Anonymous Coward, 17 Dec 2020 @ 8:05am

    what a stupid question! why the hell do they think it's doing it?

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

  • identicon
    Anonymous Coward, 17 Dec 2020 @ 8:30am

    "Mismanagement" of funds, or swindle?
    It's a swindle.

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

  • identicon
    Anonymous Coward, 17 Dec 2020 @ 9:14am

    I figure it's kickbacks.

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

  • icon
    Mononymous Tim (profile), 17 Dec 2020 @ 10:47am

    Easy

    Pai's OBVIOUSLY an industry shill.

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

  • icon
    fineas (profile), 17 Dec 2020 @ 11:23am

    As usual- we can subsidize profit making corporations, and it's not considered "welfare". IF we are to continue the farce of giving money to these corporations, how about flipping things? They must invest and provide the services and infrastructure FIRST. Then they can apply for some reimbursement.

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

    • This comment has been flagged by the community. Click here to show it
      identicon
      Finger, 17 Dec 2020 @ 12:55pm

      Re: You're fingered, "fineas"! TWO comments in nearly SEVEN yea

      fineas: 2 (< 0.3) nearly SEVEN year gap; Jan 29th, 2014 https://www.techdirt.com/user/fineas

      C'mon, kids. This is unbelievable. Back after ONCE in 2014? -- NO, it's an abandoned account taken over by an Admin to give the illusion of interest. Like the Ashley-Madison scam, Techdirt is for entertainment purposes only: it's not required to tell the truth.

      ["Phineas Fingers" was cartoon series in an early DND mag.]

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

      • icon
        thefantodayhtml (profile), 17 Dec 2020 @ 1:53pm

        Re: Re: You're fingered, "fineas"! TWO comments in nearly SEVEN

        What sort of drugs are you taking?

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

        • identicon
          Rocky, 18 Dec 2020 @ 9:22am

          Re: Re: Re: You're fingered, "fineas"! TWO comments in nearly S

          I think the problem is that he isn't taking his prescribed drugs.

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

          • icon
            Scary Devil Monastery (profile), 22 Dec 2020 @ 3:12am

            Re: Re: Re: Re: You're fingered, "fineas"! TWO comments in near

            Probably. Baghdad Bob doesn't want to realize that techdirt is full of people who all think he's the reprehensible shitwit that he is. And so he's invented this world all his own where half the regular Techdirt posters are sock puppets paid for by Mike Masnick and Tim Geigner, just for the purpose of...beating a deranged troll around his face and neck with his own bad arguments, apparently.

            I think we all realizes just how badly Baghdad Bob is unbolted from, factual reality when he implied Masnick did all that on behalf of his, and I shit you not, Google and CIA paymasters.

            So if you've been on a hiatus from online? You're a sockpuppet, says Baghdad Bob.
            Not usually posting? Sock puppet, says Baghdad Bob.
            Followed the twitter/instagram/facebook feed of a topic back here to post for the first time? Sock Puppet, screams Baghdad Bob, in full hysterics.

            I'm starting to think, after ten years worth of seeing Baghdad Bob remain his largely unchanged self on torrentfreak and techdirt, that he simply got himself hooked on a grievance addiction many years ago and all his randomly demented blathering is just the desperate fumbles of a junkie trying to provoke people into providing him his next fix of "being mad about <whatever>".

            Outside of actual addiction I don't find a credible hypothesis for a normal shitposting troll or even someone in dire need of a therapist to keep this shit up for more than ten years.

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

      • identicon
        Anonymous Coward, 17 Dec 2020 @ 4:34pm

        Re: Re:

        Why do you support the government giving corporations free money, blue? Did the people give those corporations the rights to taxpayer money? Is this supported by common law?

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

      • identicon
        Anonymous Coward, 17 Dec 2020 @ 6:48pm

        Re: Re: You're fingered, "fineas"! TWO comments in nearly SEVEN

        Jesus fuck, what is your problem.

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

  • identicon
    Anonymous Coward, 17 Dec 2020 @ 11:56am

    Finally, this is the correct issue.

    It really does seem that the problem is not so much who is benefiting from this corrupt, graft-ridden program as why does it exist at all. If there were no RDOF, there would be no unworthy or questionable claimants. With SpaceX starting what looks like a genuine program to service remote and underserved locations and individuals, the need for the program is highly debatable. If something is needed, perhaps it should be an individual grant program to assist in startup/connection costs. Given the highly corrupt and anti-competitive state of the telecoms industry in the US, I doubt that programs like the RDOF will ever significantly close the US rural/urban digital divide.

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

  • icon
    ECA (profile), 17 Dec 2020 @ 12:23pm

    More funny.

    How much would it cost, to have the 3rd party companies that WORK for the Telco's installing Fiber, to do the work.
    REALLY.
    They could hire extra people all over the country, and get to work, and get it done, in a few years.
    That alone would put people to work. And if you really want some FUN, DONT GIVE THE WORK DONE back to the telco. LEASE IT to them. Easier then TRYING TO TAX THEM, and getting 100% write off.

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


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