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.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

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


Reader Comments

Subscribe: RSS

View by: Thread


  1. 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.


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories
.

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.