Broadband Monopolies Keep Getting Money For Networks Never Fully Deployed

from the round-and-round-we-go dept

As we've noted a few times, there's an underlying belief in American tech policy that if we just keep throwing money at entrenched broadband monopolies we can lift US broadband out of the depths of mediocrity. But as we've noted more than a few times, heavily subsidizing a bunch of regional monopolies, while not doing anything about the conditions that created and insulate those monopolies, doesn't result in much changing. It's especially ineffective when you don't really punish ISPs for decades of taking taxpayer money in exchange for network upgrades that almost always, like clockwork, wind up unfinished.

The latest case in point: in 2015, regional monopolies CenturyLink and Frontier Communications took nearly $800 million in taxpayer funds to expand broadband to underserved areas they deemed too expensive to wire themselves. And guess what happened:

"The deadline to hit 100 percent of the required deployments passed on December 31, 2020. Both CenturyLink and Frontier informed the FCC that they missed the deadline to finish deployment in numerous states."

CenturyLink rather coyly acknowledged that it failed to meet deployment milestones in more than 25 states. Frontier failed to meet its deployment targets in around 17 states. Under the law, ISPs have a year from the point they finally inform the FCC that haven't done what they promised to... actually do what they promised.

And while that same law says the the government can take back taxpayer funding "equal to 1.89 times the average amount of support per location received in the support area," plus another ten percent of the carrier's total funding in that area, that often never happens. ISP lawyers routinely tap dance over, under, and around those milestones; and penalties are particularly pathetic when there's a captured regulator like outgoing FCC boss Ajit Pai at the helm.

A shining example of this lack of accountability is Frontier Communications, which we've long held up as a stunning example of monopolization and corruption in states like West Virginia. This is a company that time, and time, and time again has failed to meet its obligations tied to taxpayer subsidies, and in some instances was even caught defrauding the government. The federal response to this? To throw yet more taxpayer and ratepayer money at the company via the recent, scandal-plagued Rural Deployment Opportunity Fund auction:

"CenturyLink and Frontier are both getting more money from the FCC in the new Rural Digital Opportunity Fund, with CenturyLink getting $262.4 million spread over 10 years and Frontier getting $370.9 million over 10 years.

"Sen. Shelley Moore Capito (R-W.Va.) recently urged the FCC to block Frontier's new funding, saying that "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."

Folks in DC (especially the Ajit Pai types) claim they're focus is "lifting burdensome regulations to boost network investment." In reality, they've effectively ceded all policy decisions to regional monopolies, which they're utterly incapable of holding accountable for much of anything. When the data then shows that this clearly and obviously only results in less competition, stifled investment, wasted money, and mediocrity, the impulse is almost always to pretend that this data isn't real... then double down on the same decisions that brought us there. Rinse, wash, repeat.

Now with COVID highlighting broadband's importance in an entirely new way, there's a massive new push to solve the problem by throwing more money at it. But until and unless policymakers embrace polices that specifically target the dominance of entrenched monopolies, driving more competition to market, we're not getting off this ridiculous hamster wheel.

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Filed Under: broadband, broken promises, fcc, promises, subsidies, taxpayers
Companies: centurylink, frontier, frontier communications


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  • identicon
    Anonymous Coward, 26 Jan 2021 @ 6:29am

    Good thing we gutted Net Neutrality for this.

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

  • icon
    Upstream (profile), 26 Jan 2021 @ 7:16am

    Another good example of one of the primary functions of governments: transferring money from the taxpayers to
    1) Themselves
    2) Their family
    3) Their friends
    4) Their business associates
    5) Their campaign contributors
    6) Those who will hire them as "consultants" if they ever leave government
    etc, etc, etc.

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

  • identicon
    Anonymous Coward, 26 Jan 2021 @ 8:19am

    Not only should new funding be blocked but they should have to repay the funding they already received in proportion to deployment they have not yet done. We the people paid for a service not fully rendered and should be able to demand a refund.

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

    • icon
      lucidrenegade (profile), 26 Jan 2021 @ 10:54am

      Re:

      "And while that same law says the the government can take back taxpayer funding "equal to 1.89 times the average amount of support per location received in the support area," plus another ten percent of the carrier's total funding in that area, that often never happens."

      If this is correct, it shouldn't even be that hard to get the money back. All they have to do is enforce the law. That's what pisses me off more than anything - they have the legal means to claw that money back (plus more), yet they don't do a damn thing about it.

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

  • identicon
    Anonymous Coward, 26 Jan 2021 @ 11:24am

    and Rosenworcel is still hesitating over restoring Net Neutrality and stopping these monopolies from fleecing the public, as well as those in government, continuously taking tax payers money and doing next to nothing with it except lining the pockets of the few!

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

  • icon
    ECA (profile), 26 Jan 2021 @ 11:37am

    Only a few things can be done.

    Why not ask them, HOW MUCH? to Do a certain area to get this all done.

    Installers and the Corps are 2 different groups. If you dont need them Why pay the extra costs to keep them around.
    So why NOT get the Companies that DO' the installations, to Independently Install Town by town? I know the Gov. hates paying 100 groups instead of 1 BIG group. But those responsible for this, Arnt doing it.
    THEN if the Corps get upset, because they DIDNT get the work done, SELL them the system, at 5-10 times the COST. For the 1 reason that its UP TO DATE, not the cheapest crap on the market.

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

  • identicon
    Dave, 27 Jan 2021 @ 7:24am

    Just stop throwing money at their shareholders.

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

    • icon
      ECA (profile), 27 Jan 2021 @ 12:45pm

      Re:

      problem with that?
      Shareholders that ARNT the CEO/OWNERS/ and such have no controls. Those are removed with the Current Stocks. There are at least 3 types of stocks from corps. and 2 of them have No control.
      the other point is Corps using stocks as long term Bank loans with <1% interest. there is no REQUIRED amount of money to give to stock holders.

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


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