Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

It was called “Broadband for All” — New York Governor Andrew Cuomo’s commitment to bring high-speed internet service to every New York State resident. But it now appears the governor will break that promise and leave more than 72,000 rural New York residents with satellite-delivered internet that does not come close to meeting the broadband speed standard and is infamous for customer frustration, slow speeds, and low data caps.

Ensuring High-Speed Internet Access for Every New Yorker

In today’s world, internet connectivity is no longer a luxury—it is a necessity. Broadband is as vital a resource as running water and electricity to New York’s communities and is absolutely critical to the future of our economy, education, and safety.

In 2015, Governor Cuomo made the largest and most ambitious state broadband investment in the nation, $500 million, to achieve statewide broadband access by 2018. 

The New NY Broadband Program sets as its goal access to speeds of 100 Mbps for all New Yorkers, with 25 Mbps acceptable in the most remote and rural areas. The cost must not exceed $60 and there is a general prohibition of data caps. This goal exceeds requirements of the FCC’s Connect America Fund program and requires that projects be completed on a more accelerated timeline.

Today, the governor announced the state grant winners to split $209.7 million in the third and final round of awards to offer 122,285 additional homes, businesses, and institutions broadband internet service.

“These latest awards through Round III of the New NY Broadband Program will close the final gap and bring high-speed broadband to all New Yorkers in every corner of the state,” the governor’s office claimed.

Except it won’t.

Tucked in among the grant award winners is a $14,889,249 grant to Hughes Network Systems, LLC, targeting 72,163 rural New Yorkers, more than half of the total number of customers to be reached in the third round. Hughes operates the HughesNet satellite internet service, a technology derisively known as “satellite fraudband” for routinely failing to meet its advertised speed claims. It’s also known as “last resort internet” because it is slow, expensive, and heavily data capped.

Complaints about HughesNet are common on websites like Consumer Affairs:

“Extreme false advertising. Over the first 30 days with HughesNet Gen5, I averaged 3 Mbps download when advertised 25 Mbps. I canceled when they couldn’t answer why I used 20 GB of data in less than 24 hours. I am a 55 year old average internet user. No streaming. No music. No videos (YouTube). DO NOT GET THIS SERVICE EVEN IF NO OTHERS ARE AVAILABLE.” — Dennis, Tazewell, Tenn. (1/25/2018)

“HughesNet claims high speed internet in our region. Clearly not available here, 3 service calls, with exchange of equipment, 50 calls – recorded leaves us no choice, we demand that this contract be null/void without stealing $399 cancellation. A despicable Company, uninformed customer service, average speeds with a video; upload speed 0.62 Mbps, the download speed is 1.28 Mbps. Help!!!” — Jeffrey, Kerhonkson, NY (1/21/2018)

“Promised speeds of no less than 25 Mbps. Actual speed received was 5-9 Mbps. Unable to stream anything. Computer programs did not operate and did not update as required. We have cancelled HughesNet at great cost to us. Worst internet service ever.” — Jennifer, Hartsville, SC (1/12/2018)

Pat (last name withheld) lives 1.3 miles from the nearest Charter Communications customer in Niagara County, near Niagara Falls and is very disappointed with recent developments. Charter has quoted an installation fee of $50,000 to extend their cable service and Verizon has refused to provide DSL service, leaving Pat resorting to using an AT&T mobile data plan, which is expensive and gets throttled after using more than ~22 GB a month.

“This was a scam from Jump Street,” Pat said. “Phase 3 has 70,000 out of 120,000 homes getting satellite internet, a technology that was already available. It also gives $70 million to Verizon who declined funds in first place. Five years and $675 million later and still no internet for my kids.”

“This is a huge disappointment for us,” Pat added. “We were counting on this happening. Told numerous times it would. Now we have to debate moving, we can’t continue not having internet. My oldest son just graduated high school never having internet at home.”

“I have written and spoke with New York Broadband Program Office and it was clear to me from the beginning they didn’t understand the problems they faced, namely infrastructure costs,” said Pat. “They didn’t want to hear it. They wrongly assumed that telecoms would bid and everyone would have internet. I knew when announcements were delayed that the bids for last mile didn’t come in. Tragic really. I think they made a mistake accepting that money from the FCC. Satellite was never on the table until that happened.”

Stop the Cap! readers have told us satellite internet is the worst possible option for internet access, and many have reported better results relying on their mobile phone’s data plan. But New York’s solution for more than 70,000 of its rural citizens — many that believed the governor’s commitment of 100% coverage — is to saddle them with satellite internet access starting at $49.99 a month for a paltry 10 GB of usage per month. The top plan on offer costs $99.99 a month and is capped at 50 GB a month before a speed throttle kicks in and reduces speeds to dial-up levels. A 24-month contract is required with a very steep early cancellation penalty.

Another surprising winner is Verizon Communications, a company that originally refused to participate in rural broadband expansion efforts. Verizon will accept more than $70 million to expand its broadband service to 15,515 homes, businesses, and institutions in the Capital Region, central New York, the North Country, and Southern Tier. At press time, it is not known if Verizon will bring FiOS or DSL to these customers.

Because New York State relied on private companies to bid to cover unserved residents, it seems clear HughesNet is the default choice for those New Yorkers stranded without a telecom company bidder. Although that will allow Gov. Cuomo to claim his program reaches 99.99% of New Yorkers, the rural broadband problem remains unresolved for those who were depending the most on New York to help bring broadband to rural farms, homes in the smallest communities, and those simply unlucky enough to live in small neighborhoods deemed unprofitable to serve.

Western New York

In a recent survey of 2,000 residents living in Erie County (Buffalo), N.Y., it was clear almost nobody trusts their internet service provider, and 71% were dissatisfied with their internet service.

Seventeen years after many western New York residents heard the word “broadband” for the first time at a 2000 CNN town hall at the University of Buffalo, where then U.S. Senate candidate Hillary Rodham Clinton called for increased federal funding for high-speed internet, many upstate residents are still waiting for faster access.

The Buffalo News featured two stories about the current state of the internet in western New York and found it lacking.

Erie County Executive Mark C. Poloncarz blames internet service providers for serving up mediocre broadband, and no service at all in some parts of the county he represents.

“It’s been put in the hands of the private sector, and the private sector has, for whatever reason, elected to not expand into particular areas or not increase speeds in particular areas, putting those areas behind the eight ball,” he said.

Poloncarz effectively fingers the three dominant internet providers serving upstate New York – phone companies Verizon and Frontier and cable company Charter/Spectrum. He argues that companies will not even consider locating operations in areas lacking the most modern high-speed broadband. The digital economy is essential to help the recovery of western New York cities affected by the loss of manufacturing jobs and the ongoing departure of residents to other states.

Poloncarz

An important part of Gov. Andrew Cuomo’s statewide broadband improvement initiative is prodding Charter Communications and its predecessor Time Warner Cable to do a better job offering faster internet speeds and more rural broadband expansion. The New York Public Service Commission, as part of its approval of Charter’s acquisition of Time Warner Cable, extracted more concessions from the cable giant than any other state. Among them is a commitment to expand the cable company’s footprint into adjacent unserved areas by 2020 to reach at least 145,000 homes and businesses now outside of Charter’s service area.

Last week, the cable company told the PSC it was ahead of schedule on its expansion commitment, now reaching 42,889 additional households and businesses, which is above its goal of 36,771. It has two years left to add at least another 102,111 buildings.

Charter also recently increased broadband speeds to 100 Mbps for 99% of its customers in New York and has committed to boosting those speeds to 300 Mbps by the end of next year.

But where Charter does not provide service, broadband problems come courtesy of western New York’s biggest phone companies – Verizon and Frontier. In Erie County, a broadband census found a lack of service in parts of South Buffalo, the far West Side and East Side of Buffalo, as well as in parts of every town in the county except in the prosperous communities of West Seneca and Orchard Park. Verizon FiOS can be found in a handful of well-to-do Buffalo suburban towns, but not in the city itself or in rural parts of the region.

Verizon spokesman Chris McCann said the company had no further plans to expand FiOS service in upstate New York, and stopped announcing additional expansions in 2010. In the rest of its service area, Verizon supplies DSL service as an afterthought, and has made no significant investments to improve or expand service. Frontier Communications, which is the dominant phone company in the greater Rochester region, also provides service in some other rural western New York communities, but its DSL service rarely meets the FCC’s minimum speed definition to qualify as  broadband.

Rep. Collins

Both phone companies have no plans for significant fiber optic upgrades that would boost internet speeds. There is little pressure on either company to begin costly upgrades. In rural communities, both companies lack cable competition and in more urban areas, both have written off their ongoing customer losses to their cable competitor. That leaves towns like North Collins in a real dilemma. Poloncarz told the newspaper residents frequently park in the town library parking lot at night to connect to the library’s Wi-Fi service, because they lack internet service at home.

A political divide has opened up between area Democrats and Republican officials on how to solve the rural broadband problem. Democrats like Poloncarz are exploring solving the rural internet problem with a county-owned fiber network that would be open to all private ISPs to assist them in expanding service. He is joined by Erie County legislator Patrick Burke, who thinks it is time to spend the estimated $16.3 million it will take to build an “open access network” across Erie County.

“There are literally geographic dead zones, and it’s unnecessary,” said Burke, a Buffalo Democrat. “There’s no excuse.”

Poloncarz is more cautious and told the newspaper he will only propose the idea if he is convinced it will solve the problem, but is willing to continue studying it.

Republicans from the western New York congressional delegation believe deregulation and other incentives may give private companies enough reasons to begin upgrades and expansion.

Rep. Chris Collins, a Clarence-area congressman with close ties to the Trump White House, defended FCC Chairman Ajit Pai’s recent decision to eliminate net neutrality. Pai was born in Buffalo.

Collins argues net neutrality only raised the cost of business for ISPs, and being rid of it would inspire cable and phone companies to boost investment in 105 exurban and rural towns in his district, which covers eight counties and extends from the Buffalo suburbs east to Canandaigua, 80 miles away. More than 65% of those areas are under-served because DSL is often the only choice, and at least 3.3% had no internet options at all.

Rep. Tom Reed (R-Corning) has just as many internet dead zones in his district, if not more. Reed represents the Southern Tier region of western New York in a district that runs along the Pennsylvania border from the westernmost part of New York east nearly to Binghamton. Much of recent broadband development in this part of New York comes as a result of Gov. Cuomo’s state-funded broadband expansion initiative, not private investment.

Reed has a record in Congress that is better at explaining the rural broadband dilemma than solving it.

“In a rural district, there are areas that are just physically difficult to serve,” Reed shrugged.

Collins’ hope that the banishment of net neutrality will inspire Frontier, Verizon, and Charter to use their own money to expand into the frontiers of western New York seems unlikely. Gov. Cuomo’s plan, which uses public funds to help subsidize mostly private companies to expand into areas where Return On Investment fails to meet their metrics has had more success.

But the rural broadband debate has been accompanied by a fierce pushback among upstate New Yorkers against the Republican-controlled FCC and elected officials like Collins who support the recent gutting of net neutrality. A backlash has developed in his district, and some have accused Collins of aiding and abetting a corporate takeover of the internet.

“The hysteria and narrative that this will kill the internet is blatantly false,” responded Collins. “Internet service providers have said they do not increase speeds for certain websites over others, and I have signed onto legislation that would make such a practice illegal.”

Frontier Communications customers in the mountainous western counties of North Carolina have run out of patience waiting for web pages to load and upgrades to arrive, despite repeated promises from the phone company that its aging copper-wire DSL service would improve over time.

Stop the Cap! readers in the region pointed us to a special investigative report by WLOS-TV, Asheville’s ABC affiliate, which reports Frontier service is so bad, speeds under 1 Mbps are common. The station saw examples of Frontier unable to supply even modest speeds of just 3 Mbps.

“I’d rather stab myself than rely on Frontier’s fake internet access,” says our reader Darrell, who lives near Brasstown. “The only thing high-speed at Frontier is how fast they hang up on you when you call to complain.”

Frontier sold him “up to 10 Mbps” speed and instead struggles to deliver 1 Mbps, despite repeated service calls and promises of improvements.

“They keep telling us the federal government has to come up with money to help upgrade the area, and I keep wondering why a private company needs our tax dollars to build a network they will profit from for years,” Dan said. “If they cannot do the job, maybe the town should because they at least answer to us.”

Aiden Davis, who lives near Asheville, said he’d rather have the government give money to the cable company to extend broadband to his home, which is located about 1/4th a mile away from the nearest cable connection.

“At least the cable company can give me speeds DSL never will,” he told us.

Reporters at WLOS visited Murphy, N.C., a community of 1,600 people in Cherokee — the westernmost county of the state.

Craig Marble escaped Washington, D.C. to live in the picturesque community nestled in the mountains. But his efforts to telecommute to his IT employer are frustrated by Frontier’s DSL service, which is supposed to provide up to 3 Mbps to Marble and his neighbors. But Frontier delivers far less than it advertises.

Western North Carolina

“It’s just a comedy of errors except that it’s not funny. It takes five minutes to load a single webpage,” Marble said. “This should be 3.0, not .3 [Mbps],” Marble said while showing reporters various speed tests for his service, resulting in .3 and .5, and .6 Mbps at various times throughout the morning and afternoon.

More than 50 similar complaints have been filed with the North Carolina Attorney General, some about internet speed, others about service, outages, and billing problems.

“If there are companies out there making representations to consumers that they can not back up and we hear from consumers, we will absolutely take action on their behalf,” Attorney General Josh Stein told the station. “If we determine that Frontier is not complying with the law, we’ll hold them accountable, but there’s a lot of work we still need to do.”

But residents contend Stein does not seem to be in a hurry to chase down Frontier, and may not have the resources to follow through even if he wanted. After the Democrat won the North Carolina Attorney General race and took office in 2017, the Republican-controlled legislature slashed $10 million from his budget, forcing layoffs of dozens of staff attorneys and limiting his office’s ability to act.

Stein told the TV station he wrote to Frontier about internet speed issues in North Carolina, but hasn’t received a response.

Frontier responded to WLOS with a statement, reading in part:

“Copper-based internet service is difficult to represent consistently as it is subject to distance limitations. That is why it is sold as offering ‘up to’ a specified speed. Not all customers will have the same DSL service.”

But some customers report speeds are consistently better at times when most people are unlikely to be online, suggesting Frontier may be overselling its DSL service — forcing too many customers to share a limited bandwidth connection.

“When it is 2:30 in the morning, we always have the best speeds,” Davis reported. “They always drop as soon as the kids get home from school and keep dropping into the evening. During recent winter storms, speeds dropped to the point where the internet was unusable.”

Attorney General Joel Stein

“It’s not a technical problem, it’s a ‘reluctance to spend money to fix it’ problem,” he added.

Frontier frequently responds to speed complaints with press releases touting recent internet service improvements made possible through the federal government’s Connect America Fund, without always disclosing many of these projects pay to extend internet access into areas where it did not exist before, not improve service for customers that already have it.

Frontier’s willingness to spend its own money on broadband improvements is often challenged by Wall Street’s demands for a dividend payout to shareholders, sending a significant portion of Frontier’s incoming revenue to investors. The company has reduced its dividend during difficult times to invest in limited upgrades. But critics claim Frontier’s devotion to a robust upgrade program comes second to shareholders and depends mostly on federal government handouts.

“The company struggles to spend $14.4 million on upgrades through 2020, but had no problem spending more than $10 billion to buyout Verizon in Florida, California, and Texas,” complained Darrell. “When you ask them specific questions, you learn that upgrade spending is window dressing that won’t address their speed problems across this part of the state.”

Marble tells WLOS that seems to be his impression as well, noting Frontier representatives didn’t give him much hope.

“They said — several of them said, ‘There are no plans for upgrades in your area, period’,” Marble said.

The TV station sent Frontier a detailed questionnaire, to which the company responded, taking care to disclaim some of the upgrade benefits many of Frontier’s own press releases seem to imply:

Question: How many customers does Frontier service in the following counties: Buncombe, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, Mitchell, McDowell, Polk, Rutherford, Swain, Transylvania, Yancey? Answer: I’m not familiar enough with cities in counties etc. We have customers in the following towns: Andrews, Bryson City, Buncombe, Cashiers, Cherokee, Cullowhee, Fontana, Franklin, Garden City, Glenwood, Hayesville, Highlands, Madison, McDowell, Mitchell, Murphy, Robbinsville, Suit, Sylva, Weaverville and Yancey. Of those we serve, some are only telephone customers, some internet only customers and still others both phone and internet customers. While we do not provide market specific customer counts in any of our operating areas for competitive reasons, it is fair to say that our customer count in the areas I referenced is in the tens of thousands.

Question: How is Frontier using the Connect America Funds in western North Carolina? What’s being done to upgrade or add service? How is the money being spent? Answer: Frontier is installing fiber into network support buildings or units in western North Carolina to enable more capacity over our existing copper network.

Question: How many new customers has Frontier been able to provide service to, as a result of Connect America funds? Are the funds being used more for acquiring new customers or is it more upgrading service for existing customers and in that case, what have the service improvements been like? Answer: It starts with upgrading the network to provide a minimum of 10 Mbps service identified as CAF households to meet the requirements of the CAF Fund as established by the FCC. Customers along the path of these improvements, both existing and those who are currently not customers, can take advantage of new broadband upgrades though not necessarily at the 10 Mbps threshold. However, it is not designed to extend the network to different operating areas.

Question: How much funding has Frontier received in Connect America funds for upgrades to broadband service in those western North Carolina counties? Answer: As of 2016, Frontier began receiving approximately $3.6 million a year from the CAF to expand and upgrade the company’s network to more than 11,000 locations in North Carolina by the end of 2020, to include areas in western NC. In total, Frontier has accepted the FCC’s CAF II offer of over $330 million annually across 29 states during the six-year program, and must meet annual benchmarks for each state beginning in 2017 for passing a specified percentage of designated households.

Question: In which counties has Frontier received funds and is using them to improve or add service? Answer: We have previously used CAF II funds in Macon, Clay, Jackson and Swain counties.

Question: What projects/upgrades have been completed to date, since Frontier started receiving Connect America funds? Answer: In addition to the counties referenced above, representative counties in this latest round in 2017 included households in Cashiers, Cherokee, Franklin and Hayesville. By the of this phase of CAF II funding the intention is to have touched all of the counties we serve in Western NC, barring anything unexpected.

Question: Has Frontier over-promised service in areas in any of the above mentioned counties? If service has been over-promised, what problems is that creating and what is the remedy for solving that problem? Answer: I’m not sure what this question is asking. I would say that copper-based internet service is difficult to represent consistently as it is subject to distance limitations. That is why it is sold as offering “up to” a specified speed. However, CAF funding should have a positive impact on the end user experience.

Question: What is the best way customers who feel they’re being underserved or not getting the service that they’ve paid for can reach out to report a problem? Answer: They should call 1-800-921-8101.

Question: Has the state of North Carolina, through the state’s Attorney General office or Consumer Protection Division reached out to Frontier over service issues, failing to deliver on service promises made by the company and if so, what’s been the response back to the state? Answer: We receive individual customer complaints from these agencies, usually revolving around availability of service or insufficient internet speeds. Our marketing for internet service and our terms of service recognize that some customers may not have the same experience as others, largely because of the distance limitations of DSL service or congestion in the network. We are attempting to address both of these issues through a combination of normal capital budgets and the additional CAF II funding.

Question: What are some of the issues Frontier runs into in expanding or improving broadband service or internet access and speed issues in western North Carolina? Answer: Mostly there are geographic challenges. However, customer density is also a challenge, or lack thereof. Balancing the significant cost of expanding broadband availability in rural areas versus the potential return on that investment is always a challenge. However, we are grateful for the Connect America Fund to help spur some of that investment and know that those customers who have been impacted by the expanded capacity appreciate the service.

Question: Anything you would like to add about the Connect America funds? Answer: We are fortunate to be a participant in the CAF funding process and grateful to the FCC for making it possible. Our hope is that customers in Western NC will have better internet connectivity experiences as we move along toward the culmination of this funding in 2020.

If you live in North Carolina and want to file a complaint about your internet service with the Attorney General’s Office click here.

WLOS-TV in Asheville, N.C. aired this special investigative report about Frontier Communications’ performance problems in western North Carolina. (5:03)

The Federal Communications Commission has quietly approved the acquisition of Alaska’s largest cable operator by John Malone’s Liberty Interactive with no deal conditions or consumer protections, despite fears the merger will lead to monopoly abuse.

The purchase of Alaska’s General Communications Inc. (GCI) in an all-stock deal valued at $1.12 billion was announced in April 2017. GCI currently offers cable TV and broadband service to 108,000 customers across Alaska, and runs a wireless company.

“We conclude that granting the applications serves the public interest,” the FCC wrote. “After thoroughly reviewing the proposed transaction and the record in this proceeding, we conclude that applicants are fully qualified to transfer control of the licenses and authorizations […] and that the transaction is unlikely to result in public interest harms.”

Various groups and Alaska’s largest phone company petitioned the FCC to deny the merger, claiming GCI’s existing predatory and discriminatory business practices would “continue and worsen upon consummation of the deal.”

Malone

Those objecting to the merger claimed GCI already has monopoly control over broadband-capable middle-mile facilities in “many locations in rural Alaska” and that GCI has refused to allow other service providers wholesale access to that network on “reasonable” terms. They also claimed GCI received substantial taxpayer funds to offer service in Alaska, but in turn charges monopoly rates to schools, libraries, and rural health care providers, as well as residential customers.

Essentially quoting from Liberty’s arguments countering the accusations, the FCC completely dismissed opponents’ claims, noting that Liberty does not provide service in Alaska, meaning there are no horizontal competitive effects that would allow GCI Liberty to control access to more facilities than it does now. On the contrary, the FCC ruled, the merger with a larger company meant the acquisition was good for Alaska.

“Rather than eliminating a potential competitor from the marketplace or combining adjacent entities in a manner that increases their ability to resist third-party competition, […] [this] transaction results in GCI becoming part of a diversified parent entity that will provide more resources for its existing Alaska operations.”

The FCC also rejected claims GCI engages in monopolistic, anti-competitive behavior, ruling that past claims of charging above-market prices are “not a basis for denying the proposed transaction because the allegations are non transaction-specific.”

“Although ACS [Alaska’s largest telephone company] claims that the transaction will exacerbate the behavior it finds objectionable, we see no reason to assume that GCI will have greater ability or incentive to discriminate against rivals in Alaska simply because it has access to more financial resources,” the FCC ruled. “To the contrary, the Commission has generally found that a transaction that could result in a licensee having access to greater resources from a larger company promotes competition, potentially resulting in greater innovation and reduced prices for consumers.”

GCI’s current internet plans are considered more expensive and usage capped than other providers.

In almost every instance, the FCC order approving the merger was in full and complete agreement with the arguments raised by Liberty Interactive in favor of the deal. This also allowed the FCC to reject in full any deal conditions that would have resulted in open access to GCI’s network on fair terms and a requirement to charge public institutions the same rates GCI charges its own employees and internal businesses.

The FCC also accepted at face value Liberty’s arguments that as a larger, more diversified company, it can invest in and operate GCI more reliably than its existing owners can.

“We find that this is likely to provide some benefit to consumers,” the FCC ruled. But the agency also noted that because Liberty executives did not specify that the deal will result in specific, additional deal commitments, “the amount of anticipated service improvements that are likely to result from the […] transaction are difficult to quantify.”

The Justice Department and the Federal Trade Commission earlier approved the merger deal. Most analysts expect the new company, GCI Liberty, exists only to allow Malone to structure the merger with little or no owed tax. Most anticipate that after the merger is complete, the company will be eventually turned over to Charter Communications, where it will operate under the Spectrum brand.

Defenders of FCC Chairman Ajit Pai are rushing to defend the Republican majority’s likely support for an initiative to roll back the FCC’s 25/3Mbps speed standard embraced by his predecessor, Thomas Wheeler.

Johnny Kampis, writing for Watchdog.org, claims that broadband speed standard has had an adverse affect on solving America’s rural broadband gap.

After raising that standard, suddenly those areas with speeds below 10 mbps were lumped into the same group with those who could access speeds of 10-25 mbps, resulting in diminished focus on those areas where the broadband gap cut the deepest.

Raising the standard meant, too, that fans of big government could point to the suddenly higher percentage of the population that was “underserved” on internet speeds and call for more taxpayer money to solve that “problem.”

Kampis is relying on the talking points from the broadband industry, which also happens to support the same ideological interests of Watchdog.org’s benefactor, the corporate/foundation-funded Franklin Center for Government & Public Integrity. The argument suggests that if you raise broadband standards, that opens the door to more communities to claim they too are presently underserved, which then would qualify them for government-funded broadband improvements.

Kampis’ piece, like many of those published on Watchdog.org, distorts reality with suggestions that communities with 50Mbps broadband service will now be ripe for government handouts. He depends on an unnamed source from an article written on Townhall.com and also quotes the CEO of Freedom Foundation of Minnesota, which is closely associated with the same Franklin Center that hosts Watchdog.org. Kampis’ piece relies on sourcing that is directly tied to the organization hosting his article.

In reality, rural broadband funding has several mechanisms in place which heavily favor unserved, rural areas, not communities that already have 50Mbps internet access. ISPs also routinely object to projects proposed within their existing service areas, declaring them already served, and much of the funding doled out by the Connect America Fund (CAF) Kampis suggests is a government handout are being given to telephone companies, not municipalities.

Kampis

Kampis is satisfied free market capitalism will eventually solve the rural broadband problem, despite two decades of lackluster or non-existent service in areas deemed unprofitable to serve.

“So while Pai’s critics denigrate him because his FCC is considering lowering that broadband standard, he’s just correcting an earlier mistake, with the realization that the free market, not big government, will solve the rural broadband gap if given enough time,” Kampis writes. “And returning to the old standards will help ensure that the focus will be placed squarely on the areas that need the most help.”

Kampis suggests that free market solution might be 5G wireless broadband, which can potentially serve rural populations less expensively than traditional wired broadband service. Communities only need wait another 5-10 years for that to materialize, if it does at all.

Kampis claims to be an investigative reporter, but he didn’t venture too far beyond regurgitating press releases and talking points from big phone companies and opponents of municipal broadband. If he had spent time reviewing correspondence sent to the FCC in response to the question of easing broadband speed standards, he would have discovered the biggest advocates for that are large phone companies and wireless carriers that stand to benefit the most from the change.

Following the money usually delivers a clearer, more fact-based explanation for what motivates players in the broadband industry. In this case, the 25Mbps speed standard has regularly been attacked by phone and wireless companies hoping to tap into government funds to build out their networks. Traditional phone companies are upset that the 25Mbps requirement means their typical rural broadband solution – DSL, usually won’t cut it. Wireless companies have also had a hard time assuring the FCC of consistent 25Mbps speeds, making it difficult for them to qualify for grants. AT&T wasn’t happy with a 10Mbps standard for wireless service either.

Incidentally, these are the same companies that have failed to solve the rural broadband gap all along. Most will continue not serving rural areas unless the government covers part of their costs. AT&T illustrates that with its own fixed wireless rural broadband solution, which came about grudgingly with the availability of CAF funding.

The dark money ATM network hides corporate contributions funneled into advocacy groups.

The free market broadband solution is rooted in meeting Return On Investment metrics. In short, if a home costs more to serve that a company can recoup in a short amount of time, that home will not be served unless either the homeowner or someone else covers the costs of providing the service. By wiping out the Obama Administration’s FCC speed standard, more ratepayer dollars will be directed to phone and wireless companies that will build less expensive and less-capable DSL and wireless networks instead of investing in more modern technology like fiber optics.

Mr. Kampis, and others, through their advocacy, claim their motive is a reduction in government waste. But in reality, and not by coincidence, their brand of journalism hoodwinks readers into advocating against their best interests of getting fast, future-proofed broadband, and instead hand more money to companies like AT&T. The Franklin Center refuses to reveal its donor list, of course, but SourceWatch reported the Center is heavily dependent on funding from DonorsTrust, which cloaks the identity of its corporate donors. Mother Jones went further and called it “a dark money ATM.”

Companies like AT&T didn’t end up this lucky by accident. It donates to dark money groups that fund various sock puppet and astroturf operations that avoid revealing where the money comes from, while the groups get to claim they are advocating for taxpayers. By no coincidence, these groups frequently don’t attack corporate welfare, especially if the recipient is also a donor.

New York’s rural broadband initiative is on track to deliver near 100% broadband coverage to all New York homes and has speed requirements and a ban on hard data caps.

Raising speed standards does not harm rural broadband expansion. In New York, Gov. Andrew Cuomo’s broadband expansion campaign is on track to reach the remaining 150,000 homes still without broadband access by sometime next year. His program relies on broadband expansion funding that comes with requirements that insist providers offer internet access capable of at least 25Mbps (with a preference for 100Mbps) for $60 or less and a ban on hard usage caps. Kampis claims the 25Mbps speed standard hampers progress, yet New York is the first state in the nation moving towards 100% broadband availability for its residents at that speed or better.

Chairman Pai’s solution is little more than a gift to the country’s largest phone and wireless companies that would like to capture more CAF money for themselves while delivering the least amount of service possible (and keep money out of the hands of municipalities that want to build their own more capable networks). The evidence is quite clear — relying on the same companies that have allowed the rural broadband crisis to continue for more than 20 years is a stupendously bad idea that only sounds brilliant after some corporation writes a large check.