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Study: Throwing Taxpayer Money at Giant ISPs Hasn't Fixed America’s Broadband Problem

Corruption and inaccurate maps have allowed ISPs to paint a rosier picture of the broadband picture than actually exists.

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Aug 1 2018, 3:00pm

Image: Shutterstock

Americans pay some of the highest prices for broadband in the developed world, thanks to a lack of competition and ISP-loyal lawmakers. But a new study highlights how US efforts to throw taxpayer money at the issue isn’t striking at the heart of the problem.

While the United States likes to fancy itself a technological powerhouse, American broadband has long been derided for being decidedly mediocre. Customer service is often nonexistent and speeds and availability historically fall somewhere in the middle of the pack.

And as we’ve previously noted, roughly 28 million Americans, or roughly 8 percent of the country, lack access to any broadband whatsoever.

It’s a problem that only tends to see glacial improvement thanks to cash-compromised lawmakers and a lack of real competition in countless markets. And it’s a problem that’s only getting worse as telcos like AT&T and Verizon refuse to upgrade aging DSL networks, resulting in cable giants like Charter and Comcast enjoying greater monopolies than ever before.

This regulatory apathy and limited competition, in turn, only perpetuate the high prices, slow speeds, and net neutrality and privacy issues that crop up when there’s nothing in place to keep natural broadband monopolies in line. Consumers can’t punish bad behavior by switching ISPs, so said bad behavior only continues in perpetuity.

Historically, America has enjoyed throwing money—in the form of federal and state subsidies—at ISPs in the belief this broken market would somehow magically repair itself. But from coast to coast, corruption and apathy routinely shoot these good intentions squarely in the foot.

Image: ILSR


In New York City, Verizon is being sued for failing to adhere to fiber upgrade promises after years of subsidies. In West Virginia, Frontier Communications has routinely been accused of misleading lawmakers as to how taxpayer dollars were spent. And the FCC’s E-Rate program, intended to shore up connectivity in schools, often makes headlines for all the wrong reasons.

It’s a status quo of dysfunction the telecom industry works tirelessly to keep intact.

A new study by the Institute For Local Self-Reliance (ILSR) took a closer look at the data ISPs submit to the FCC, and found that carriers routinely over-state broadband availability. And because US broadband mapping is comically and historically terrible, it’s often impossible to accurately identify the areas most in need of subsidized network expansion.

The study notes that broadband mapping is so bad, the FCC declares an entire census tract served if just one home in that area can receive broadband. Since more accurate availability and pricing data would clearly illustrate broadband market failures, the broadband industry routinely lobbies against efforts to shore up data collection and publication.

The nation’s six biggest providers (Comcast, CenturyLink, Frontier, AT&T, Verizon, and Charter) have “invested the bare minimum to comply with requirements"

“With modern technology, it should be trivial to develop a process that is easy for ISPs to use and less likely for monopoly ISPs to game but we have not found a single person with deep knowledge of the FCC that believes it will happen in the near future,” notes the group.

Monopoly ISPs then use this inaccurate data to pretend that US broadband is faster and more widely-deployed than it actually is. They also work tirelessly to keep broadband pricing data out of the hands of the public, lest American consumers begin to understand just how soundly they’re being screwed by a broken market.

In short, the data we currently have likely paints a much rosier picture than what’s actually available to consumers, and you can’t buy your way out of a problem you don’t truly understand.

Image: ILSR

The report argues that ISPs that take billions in government subsidies (from programs like the FCC’s Connect America fund) traditionally focus their efforts on more competitive, urban markets, leaving less-affluent cities and rural markets with sluggish DSL that fails to even meet the FCC’s base definition of broadband (25 Mbp down, 4 Mbps up).

The nation’s six biggest providers (Comcast, CenturyLink, Frontier, AT&T, Verizon, and Charter) have “invested the bare minimum to comply with requirements while more significantly upgrading urban markets,” the group notes. “Meanwhile, cooperatives and local ISPs that have received far fewer subsidies have invested much more in rural communities.”

Here too ISPs have lobbied to thwart progress. Countless towns and cities have begun building and operating their own broadband networks in the wake of incumbent apathy, only to run face first into laws passed in 21 states banning them from doing so. These laws are often quite literally written by the same ISPs that refused to upgrade these areas in the first place.

More than 750 communities nationwide have built and operate their own broadband networks, and a recent Harvard study highlighted how these networks tend to offer better, cheaper, and more uniformly deployed service than their private industry counterparts.

The ILSR report notes that while larger, private ISPs tend to do the bare minimum to meet subsidy compliance requirements in under-served markets, cooperatives, municipal ISPs, and locally-owned providers “tend to invest in longer-term next-generation services that well exceed the minimum definition of broadband” due to a genuine interest in local welfare.

The battle between Americans eager for better broadband and monopolies like Comcast focused on defending the broken status quo has raged for decades. And as Ajit Pai and his assault on consumer protections makes clear, the pendulum has swung pretty sharply in Comcast’s favor during the Trump era.

The solution, according to ILSR founder Christopher Mitchell, is to stop whining on Reddit, get out of your chair, and begin taking action where giants like Comcast are weakest: locally.

“It sucks to tell someone in this situation that they have to become an organizer, hound their elected officials, or scout for good local companies to potentially partner with in expanding access,” Mitchell tells Motherboard. “But that is what happens in a working democracy.”