Home » broadband service » Recent Articles:

Sellout: Biden’s Broadband Stimulus is a Shadow of Its Former Self

After weeks of tense negotiations to secure bipartisan support for the Biden Administration’s $1 trillion infrastructure stimulus measure, the White House appears to have largely capitulated to Republican efforts to water down funding to expand broadband service into a $65 billion package that will doubtless be a financial bonanza to the country’s largest phone and cable operators.

The Biden Administration’s original proposal for $100 billion in broadband funding was dedicated to wiring rural areas as well as focusing funding on new entrants like community-owned networks that could deliver internet access to unserved and underserved locations without having a profit motive. The original proposal also would have prioritized funding for future-capable fiber internet, with some advocating that networks be capable of delivering at least a gigabit of speed to customers to qualify for funding. The Administration also promoted the idea of affordable broadband, combatting the growing digital divide exacerbated by internet pricing out of reach of the working poor.

What emerged on Sunday as a “bipartisan agreement” with Republicans on infrastructure stimulus is almost a travesty — slashed almost by half and now effectively a veritable gift to Big Telecom. The industry spent hundreds of millions lobbying Congress and got almost everything it wanted. If passed in its current form, those same phone and cable companies will pocket much of the money for themselves.

Here is how consumers were sold out:

Reduced speed requirements are a dream come true for cable operators.

The bipartisan measure proposes to water down speed requirements to qualify for government stimulus funding to a underwhelming 100/20 Mbps. That speed is tailor made for cable operators, which traditionally offer upload speeds just a fraction of their download speeds. Gone is any condition requiring gigabit-capable networks, at a time when more providers than ever are marketing near-gigabit speeds. That could quickly lead to the emergence of a speed divide, with rural Americans stuck with slower broadband technology from companies that will have no financial incentive to upgrade in these areas.

Addressing affordability is now mostly wishful thinking.

The latest proposal’s idea of solving the broadband affordability issue is to admit there is a problem and declare the need for some kind of low-cost broadband option, but apparently does not specify pricing, who is qualified to get cheaper service, and who will oversee that such programs remain affordable. That allows providers to keep writing the rules of their own token, voluntary efforts to offer discounted internet, like those that disqualify current customers and requires enrollees to jump through various qualification hoops to sign up. The stimulus program will also spend billions of dollars effectively paying a portion of disadvantaged Americans’ internet bills, at the current high prices many ISP’s charge. That is a direct subsidy to big cable and phone companies that can continue charging whatever they please for access, knowing the government will now pay $30-50 of the bill.

Republicans have made sure there is not a whiff of rate regulation or consumer protection mandates in the measure. It also abandons establishing a fixed rate, affordable internet tier for as little as $10 a month. That original proposal would have given cable and phone companies as little as $10 a month from the federal government, much less than collecting up to $50 a month from the Emergency Broadband Benefit, which pays a portion of regular-priced service. The $14 billion being set aside to continue subsidizing Americans’ internet bills at Big Telecom’s monopoly or duopoly prices could be better spent building and expanding internet services where no service or competition exists now.

Digital redlining is A-OK

The watered down compromise measure chastises companies for only incrementally expanding fiber service, mostly to wealthy neighborhoods, but stops short of banning the practice. This wink and a nod to redlining primarily benefits phone companies like AT&T and Frontier, which can now cherry-pick rich neighborhoods for fiber upgrades most likely to return the biggest profits. Phone companies and fiber overbuilders will continue to skip over urban poor neighborhoods and the highest cost rural areas which have always been the hardest to reach.

Sky is the Limit pricing with onerous data caps are fine with us.

Nothing in the measure will give preference to providers willing to offer affordable, flat rate service without the hassle of data caps. Neither will it discourage applicants that plan to use public tax dollars to subsidize expanding service that comes at high prices and with paltry usage limits.

Light Reading reported Wall Street analysts were generally pleased with the outcome, noting the negotiations resulted in stripping out oversight and price regulation and the measure won’t fund potential competitors. It also noted Big Telecom and its associated trade organizations spent more than $234 million on lobbying. Comcast topped the list of spenders at more than $43 million, with AT&T coming in second at $36 million. Both the cable and wireless industry also spent tens of millions on lobbying. They got their money’s worth. Taxpayers won’t.

Cuomo Administration Capitulates on Affordable Broadband Law; State Laws Cannot Regulate Broadband Pricing

Cuomo

As expected, New York’s efforts to lower broadband pricing through a state mandate has been effectively killed in a Brooklyn federal court, putting an end to Governor Andrew Cuomo’s efforts to require providers to offer a $15 broadband tier to income-challenged state residents.

U.S. District Judge Denis R. Hurley, who signed a preliminary injunction preventing the mandate from taking effect on June 15, signaled the concept was likely unlawful in a memorandum attached to the injunction. Several telecom companies challenged the mandate in a lawsuit heard in Hurley’s courtroom, claiming states have no regulatory authority to set broadband terms or pricing. Hurley was clearly persuaded in their direction, and was pessimistic the state could ever show a legal way to regulate internet pricing, something currently reserved to the FCC. As a result, a settlement has been proposed dropping the affordable pricing mandate.

Hurley was also moved by arguments from several smaller New York providers that claimed the new mandate would force them to sell service below cost. Empire Access, a fiber to the home overbuilder based in Prattsburgh, filed a declaration with the court threatening to cancel a major expansion project to wire customers in Livingston and Broome counties, including the city of Binghamton, if the mandate was implemented, because it would likely lose federal funding.

Because of the state’s definition as to who would have qualified for the affordable broadband tier, many smaller companies in rural, economically challenged area of upstate New York claimed they would face substantial economic losses to their businesses. Empire claimed it would lose “approximately $2 million per year,” Heart of the Catskills claimed top-line revenue would decrease $1,364,000 annually, Delhi Telephone claimed it would lose at least $90,000 per month, and the Champlain Telephone Company notified the court that “nearly half (48%) of its existing broadband customers will qualify for discounted rates,” causing the company to lose money on each customer.

“While a telecommunications giant like Verizon may be able to absorb such a loss, others may not,” Judge Hurley wrote in his order.

Gov. Cuomo bristled after learning of the lawsuit, threatening to revoke the franchise of any company that refused to implement the  state’s affordable broadband program. But the governor has made empty threats before, including a promise in 2018 to revoke the merger of Charter Communications and Time Warner Cable because the company failed to live up to the deal commitments it made to state regulators. A settlement was eventually reached between the cable giant and the state, and it appears a settlement between the plaintiff telecom companies and the state will also end this dispute and lawsuit. It appears the state has capitulated and plans to walk away from the affordable broadband proposal, although it reserved the right to appeal the case.

Stop the Cap! predicts the state will work with larger providers to increase public knowledge of the companies’ existing affordable internet programs, which usually have similar qualifications to the affordable internet law Cuomo proposed. Cuomo Administration officials will also likely lobby the Biden Administration to toughen federal oversight of broadband service and suggest a possible federal mandate for an affordable service tier and a return to net neutrality under a regulatory framework that opens the door for future price and service regulation.

The court decision signals states the solution to broadband affordability will not be found in state laws or mandates that attempt to regulate broadband pricing, at least until the current federal law changes.

Big Telecom Thrilled With Biden Admin’s $65 Billion Broadband Expansion; Most of the $ Will Go to Them

President Biden

Large cable and telephone companies are applauding the Biden Administration’s compromise $65 billion broadband infrastructure plan, designed to reduce the number of rural Americans without access to broadband service.

Many industry lobbyists and Wall Street analysts were wary of earlier plans by the Administration to spend $100 billion or more on internet infrastructure expansion, because amounts that high were seen to likely attract major proposals from municipalities to construct their own independent broadband projects, some in direct competition with cable and phone companies. The Biden Administration had sought preferential treatment to fund public broadband projects, suggesting the direct competition they could bring would lower prices. Unlike for-profit phone and cable companies, municipal projects were “less pressured to turn profits” and would have a natural incentive to commit to serve entire communities.

Heavy lobbying from for-profit phone, cable, and wireless companies, largely directed at Republicans in the Senate, sought a much lower budget for broadband expansion in the $35 billion range and a commitment to discourage municipal broadband.

Last week the Administration and a small group of Senate Republicans settled on a $65 billion compromise measure, with many of the details still unavailable early this week. But big ISPs are already breathing a sigh of relief, convinced a slimmed-down compromise measure will choke off any existential competitive threat from municipal providers invading their turf.

Wall Street analysts predict the compromise measure will be too small to provide funding for competing major city municipal broadband networks and would continue the tradition of targeting funds on unserved, high-cost rural areas. Historically, this has resulted in funding going to nearby cable and telephone companies to subsidize expansion of existing networks into areas currently deemed too unprofitable to wire for service. But ample funds are still likely to be awarded to rural telephone and electricity co-ops to expand internet access.

Analysts expect the final measure will include a requirement to offer service at minimum speeds of 100 Mbps, which would be a challenge for wireless companies and rural phone companies seeking to expand DSL service. Most providers would likely have to use fiber optics to build networks consistently capable of delivering that speed. If the compromise measure only insists on 100 Mbps download speed, expect the cable industry to be relieved. If the minimum speed requirement is substantially relaxed to as low as 25 Mbps, that would also benefit wireless ISPs offering fixed wireless access.

Also unknown is whether the compromise measure still contains language overriding state laws that restrict or prohibit municipal broadband projects.

New Bipartisan Bill Would Deliver $40 Billion to Expand Rural Internet Access, Subsidize Service for Poor Americans

Sen. Portman

Three moderate senators will reintroduce the latest in a line of broadband funding initiatives later today that would allocate $40 billion to expand rural internet access and provide subsidies to make service more affordable for income-challenged Americans.

The Broadband Reform and Investment to Drive Growth in the Economy Act (BRIDGE Act), is a bipartisan measure sponsored by Republican Sen. Rob Portman of Ohio, Democrat Michael Bennet of Colorado, and independent Angus King of Maine. Originally introduced in 2020, the measure has been expanded this year to combine rural funding of broadband projects with direct subsidies to keep service affordable for poorer Americans. The measure is considerably smaller than the Biden Administration’s own proposal to spend $100 billion on broadband initiatives, the $94 billion broadband proposal from Congressional Democrats, and the $65 billion compromise plan Republicans tentatively reached with the Biden Administration before talks were called off.

Funding would be provided to internet providers prepared to expand broadband service, but only using technology capable of providing speeds starting at 100/100 Mbps — gigabit being even better. The bill would also invalidate state laws that impede or prohibit the development of municipal/public broadband projects. This could eventually lead to additional competition in rural areas not adequately served by existing providers. Funding would also be used to reduce the retail cost of internet service for those qualified as economically disadvantaged.

The reduced cost of the bill would limit the number of rural subsidy projects and would likely not be enough to provide service to all unserved Americans.

 

Call to Action: Ohio Residents! Urgent Need for Calls to Stop Anti-Broadband Bill

Urgent CALL TO ACTION for ALL OHIO RESIDENTS!

The Ohio Senate has inserted an amendment (AM4546-1) into the state budget bill that, if adopted, would ban almost all community and municipal broadband projects in the state.

We need everyone to make a quick phone call to their state senator to demand the amendment be removed immediately! A full vote on this is expected tomorrow, so you MUST make that phone call today or early tomorrow morning. It will take less than five minutes of your time.

Here is what you can say:

“Hi, I’m calling to ask Senator _________ to vote no on Amendment AM4546-1 that has been attached to the budget bill. This amendment would seriously harm efforts to get broadband service to rural residents of Ohio and is essentially a project killer amendment. If it is adopted, municipalities that have been contemplating bringing internet access to their communities would find it nearly impossible to do so. This amendment is nothing more than protectionism for big cable and phone companies and I object to it. We need more broadband service in this state, not less. Please ask the senator to reject this amendment.”

Contact information:

If you do not know who represents you, visit the Ohio Senate website and enter your address information and you will be given details.

Because time is short, please CALL your senator at the number below. Just ask the secretary to take a message for the senator and, if you need to know what to say, see the above sample script. Always be polite, professional, and persuasive and thank the secretary for their time. 

Ohio State Senators 

Antani, Niraj

Senator – 6-R

614-466-4538

 

Antonio, Nickie J.

Assistant Minority Leader – 23-D

614-466-5123

 

Blessing III, Louis W.

Senator – 8-R

614-466-8068

 

Brenner, Andrew O.

Senator – 19-R

614-466-8086

 

Cirino, Jerry

Senator – 18-R

614-644-7718

 

Craig, Hearcel

Assistant Minority Whip – 15-D

614-466-5131

 

Dolan, Matt

Senator – 24-R

614-466-8056

 

Fedor, Teresa

Senator – 11-D

614-466-5204

 

Gavarone, Theresa Charters

Senator – 2-R

614-466-8060

 

Hackett, Robert

Senator – 10-R

614-466-3780

 

Hoagland, Frank

Senator – 30-R

614-466-6508

 

Hottinger, Jay

President Pro Tempore – 31-R

614-466-5838

 

Huffman, Matt

President – 12-R

614-466-7584

 

Huffman, Stephen

Senator – 5-R

614-466-6247

 

Johnson, Terry A.

Senator – 14-R

614-466-8082

 

Kunze, Stephanie

Senator – 16-R

614-466-5981

 

Lang, George

Senator – 4-R

614-466-8072

 

Maharath, Tina

Minority Whip – 3-D

614-466-8064

 

Manning, Nathan

Senator – 13-R

614-644-7613

 

McColley, Robert

Majority Whip – 1-R

614-466-8150

 

O’Brien, Sandra

Senator – 32-R

614-466-7182

 

Peterson, Bob

Senator – 17-R

614-466-8156

 

Reineke, William

Senator – 26-R

614-466-8049

 

Roegner, Kristina Daley

Senator – 27-R

614-466-4823

 

Romanchuk, Mark

Senator – 22-R

614-466-7505

 

Rulli, Michael

Senator – 33-R

614-466-8285

 

Schaffer, Tim

Senator – 20-R

614-466-8076

 

Schuring, Kirk

Majority Floor Leader – 29-R

614-466-0626

 

Sykes, Vernon

Senator – 28-D

614-466-7041

 

Thomas, Cecil

Senator – 9-D

614-466-5980

 

Williams, Sandra

Senator – 21-D

614-466-4857

 

Wilson, Steve

Senator – 7-R

614-466-9737

 

Yuko, Kenny

Minority Leader – 25-D

614-466-4583

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!