We’ve noted a few times that states will soon receive more than $42.5 billion in taxpayer funded broadband subsidies courtesy of the 2021 infrastructure bill. A lot of that money will go to big giant monopolies with terrible track records on subsidy fraud. But a lot of it is also poised to go toward super popular community-owned broadband networks or cooperatives that might not exist without that funding. It should be a mixed bag, but largely beneficial for driving competition to market.
The BEAD (Broadband Equity Access And Deployment) grant program is overseen by the NTIA, and was made possible by the Infrastructure Investment and Jobs Act (IIJA). The law has a small caveat: ISPs that take taxpayer money have to make at least a passing effort to ensure there’s a base-level introductory tier that’s semi-affordable for poor people. That’s it.
This was of course enough to drive telecom giants like AT&T and Comcast into a major hissy fit back in April. Most major telecoms have a long, elaborate history of taking taxpayer money then not delivering on the actual fiber networks, and they don’t want anything interfering with that proud tradition.
So telecoms whined incessantly that these minor affordability requirements (which I doubt will even be enforced by an increasingly feckless U.S. telecom regulatory apparatus) were illegal efforts at “rate regulation.” AT&T, in particular, has been warning states if they are required to provide cheaper broadband to poor people, they’ll take their ball and go home.
Given the GOP works in perfect policy symmetry with telecom monopolies, they’ve now joined the outrage parade. The GOP House Energy and Commerce Committee has announced an “investigation” into the NTIA for “trying to impose illegal rate regulation:”
“The letter comes amid concerns that NTIA is unlawfully pressuring states to rate regulate low-cost broadband plans required by the BEAD Program.”
This is, to be clear, corruption-fueled telecom industry puppetry from a party that opposed the infrastructure bill (yet routinely tries to take credit for its benefits among constituents). A party that has worked tirelessly (with some help from Democrats) to ensure telecom giants see neither meaningful competition nor oversight, resulting in expensive, spotty, and slow broadband.
The law in question, IIJA, delegates fund management to the states, which should start receiving money this fall. It also requires that providers that take taxpayer money provide at least one “low-cost broadband service option for eligible subscribers.” But the law also says the NTIA may not “regulate the rates charged for broadband service.” At a hearing last May, NTIA Administrator Alan Davidson put it this way:
“The statute requires that there be a low-cost service option. We do not believe the states are regulating rates here. We believe that this is a condition to get a federal grant. Nobody’s requiring a service provider to follow these rates, people do not have to participate in the program.”
Again, I suspect this was to never be enforced with any zeal; telecom giants already broadly enjoy corruption fueled regulatory capture, all but own countless state legislatures, and, as extremely patriotic participants in our vast domestic surveillance initiatives, are broadly considered beyond the reach of under-funded regulators or a corrupt Congress.
Big ISPs have always been terrified of even the faintest idea that anybody in government would so much as think about “rate regulation” (or any attempt to stop them from exploiting their regional monopolies to rip off captive customers). Even if, thanks to regulatory capture and widespread U.S. corruption, that hasn’t been a serious threat to their regional fiefdoms any time in the last quarter century.
U.S. regulators can barely even acknowledge that monopolies harm competition and consumers, much less pursue a solution with any zeal. The best we tend to get are these sort of late in the game attempts to ask nicely if big ISPs will try to be ethical. And it’s all poised to get even more feckless now that the Supreme Court has dismantled independent regulatory authority.
Large, politically influential ISPs like AT&T want to take taxpayer money with absolutely no strings attached. They also have tried very hard to make sure most of the taxpayer money goes to them, and not actual communities or smaller competitors. And the GOP vision on telecom is, if it’s not yet clear, to let these widely disliked monopolies do pretty much whatever they want.
That gets dressed up as serious adult policymaking in press and policy circles, but it’s really just corruption and regulatory capture wearing an ugly hat.
