Surprise: Big Telecom Ripped Off A Broadband Subsidy Program For Low Income Americans

Early in the pandemic, the FCC launched the Emergency Broadband Benefit (EBB program), which gives low income Americans a $50 discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to users — if they qualified.

But (and I’m sure this will be a surprise to readers), big ISPs erected cumbersome barriers to actually getting the service, or worse, actively exploited the sign up process to force struggling low-income applicants on to more expensive plans once the initial contract ended. Very on brand.

The EBB was renamed the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout to the general public was dropped to $30 a month). And, once again, not at all surprisingly, the FCC recently discovered that “dozens” of U.S. broadband providers were ripping the program off to the tune of millions of dollars across Alabama, Ohio, Oklahoma and Texas.

Now the Washington Post has published an even larger investigation into the whole thing, documenting even greater abuse of the program by US telecom companies. The Post notes how companies like T-Mobile’s Assurance Wireless, for example, exploited the program to convince older folks to sign up for services they didn’t even need. Other ISPs attached weird demands to the program:

Telecom giants soon subjected their customers to a patchwork of inconsistent speeds and price points. AT&T, for example, told some subscribers with premium service — ultrafast fiber connections with download speeds up to one gigabit per second — that they could receive the subsidy only if they changed to service that was one-third as fast with possible monthly data caps, according to complaints filed with the FCC.

Congress and the FCC are “investigating” the problems. Keep in mind, the same telecom industry ripping off a program for low Americans has been waging a character assassination campaign against popular FCC nominee Gigi Sohn, gridlocking her confirmation process and keeping the FCC without a voting majority needed to hold telecoms accountable for anything (the whole point).

None of this is to say the program still hasn’t helped a lot of Americans struggling to make ends meet. More than 14 million U.S. households have enrolled in the benefit program, though that’s only a quarter of the estimated 49 million Americans who actually qualify for it. And there are some concerns that while the program was advertised as a “permanent” fix, the money is going to run out in a few years, leaving a lot of these users on broadband tiers they can’t afford.

Of course, if you step back a little bit, you realize that the program basically just gives taxpayer money to telecom giants with a long history of subsidy abuse, hoping some of it winds up with those in need. You’re basically just giving money to the same monopolies that caused high prices in the first place, to temporarily give relief to people the monopolies are ripping off. You can see how issues could arise.

If U.S. policymakers really wanted to fix U.S. broadband, they’d specifically take aim at the regional monopolies at the heart of the problem. They’d take meaningful aim at their very long history of subsidy fraud. They’d fixate relentlessly on holding monopolies accountable and driving competitors of every stripe — including municipal broadband and cooperatives — into their regional fiefdoms to challenge them.

We never really do that because not only are telecom giants like AT&T very politically powerful, they’re effectively grafted to our intelligence gathering and first responder networks, effectively making them a part of the same government that’s supposed to hold them accountable.

Instead what you get is a lot of chatter about how much we care about the “digital divide,” a lot of band-aid programs that don’t solve the real underlying issue (monopolization and the corruption that protects it), and billions thrown at telecom monopolies with a forty year history of subsidy fraud. Really changing this dynamic requires disrupting telecom monopolization (see our recent paper on this very subject), something U.S. policymakers (with the occasional rare exception) just aren’t interested in.