US Broadband Monopolies Once Again Push Idea That Tech Giants Should Pay Them Billions For No Reason

Broadband

from the please-pay-me-twice-for-no-reason dept

We’ve noted several times how European telecom giants have somehow convinced European policymakers that technology giants like Netflix and Google should annually give them billions of dollars… for no coherent reason.

The proposal is dressed up to sound like a sensible adult policy aimed at shoring up broadband access to the downtrodden. In reality it’s net neutrality 2.0: telecom giants using their leverage and power politically to try and offload network build and maintenance costs to someone else. Namely you, since companies like Netflix and Google will simply pass on the cost of this cash grab to consumers.

Emboldened by the success telecom lobbyists are seeing in the EU and South Korea, telecom lobbyists are trying to revisit the idea here in the states. Captured telecom regulators like the FCC’s Brendan Carr have been seeding lies in the US press for a few years about how tech giants are lazy free riders gobbling up bandwidth, and it’s only fair they give telecom monopolies billions for no reason.

We’ve examined how that’s bullshit in great detail, repeatedly, but that obviously doesn’t matter to lobbyists paid to be intractable.

Case in point: Jonathan Spalter, the CEO of AT&T’s pet lobbying and policy group, USTelecom, penned a blog post once again making the case that AT&T and companies like it are somehow owed billions of dollars by tech giants. He, again, pushes the lie that because services like Netflix and Google use up a big chunk of overall internet bandwidth, those companies aren’t “funding critical infrastructure”:

Today, six companies account for half of all internet traffic worldwide. These six companies have a combined market cap of $9 trillion. It’s a far cry from their garage start-up days, and without question, they are tremendous American success stories.

But three decades later, the question is being asked: Does it still make sense that the government and broadband providers alone fund this critical infrastructure? Is there no shared obligation from the primary financial beneficiaries of these networks – the world’s most powerful internet companies?

So again, the lie at the base of this proposal is always that these companies don’t already pay their fair share for bandwidth. That’s been a telecom industry policy lie we’ve spent decades deflating.

In reality, all of these tech companies invest billions in CDNs, undersea cables, transit routes, on top of the money they pay for bandwidth. Some of them, like Google, even own their own residential ISP. From consumers and local businesses to giant tech companies, everybody in the chain already pays more than their fair share for bandwidth. Often too much, in fact.

It’s important to understand that US consumers and businesses all pay telecom giants significantly more for bandwidth than most developed nations thanks to the fact that the US telecom market is heavily consolidated and monopolized by a handful of players, who exploit the lack of competition to drive up costs and saddle users with an absolute ocean in additional bullshit surcharges.

Still, the core lie in the telecom industry proposal is that tech companies somehow get a free ride. But when it comes to concentrated telecom monopoly power, nobody gets a free ride. You pay, and then you pay, and then you pay some more. Everybody pays. Ridiculous sums of money. Often for substandard, patchy service and terrible customer service.

Now there is an adult conversation to be had about whether Netflix, Google, and others could contribute to struggling FCC programs like the Universal Service Fund (USF) that help bring broadband to low income rural schools. The program genuinely is faltering as its primary contribution base, traditional phone service, has waned.

But that’s not what’s happening here despite Spalter’s attempt to wrap his post up in a shell of purported altruism. Whenever companies like AT&T or guys like Spalter actually get around to fielding concrete policy proposals, they unsurprisingly tend to favor telecom interests in dumb and strange ways.

In the EU, for example, telecoms are proposing a system that bypasses government entirely, and just has any company that accounts for more than five percent of an ISP’s peak traffic throw money directly at telecoms. And you can be assured, once AT&T implements its preferred program it won’t be altruistic; it will involve throwing billions more in subsidies at a company with a history of subsidy fraud.

AT&T, Spalter and US Telecom’s primary financial backer, has a long, long history of ripping off taxpayers in a wide number of ways, whether that’s taking millions for networks they never actually complete, getting huge tax breaks for jobs that never arrive, or systematically ripping off school broadband investment programs they then turn around and breathlessly pretend to be worried about.

If you’ve watched telecom giants behave, it’s painfully clear they’re not operating out of empathy for underserved rural school children. Since the net neutrality debate began, their singular goal has always been to double dip on already overpriced and monopolized broadband access, and increasingly offload the costs of upgrading and maintaining their networks to somebody else to please investors.

But if you genuinely want to shore up programs designed to expand U.S. broadband access, a good first step would be to start meaningfully cracking down on monopoly power, which is directly responsible for limited competition and soaring bandwidth costs in the first place. From there, the focus needs to be on cracking down harder on the endless subsidy fraud telecom monopolies have engaged in for decades.

Guys like Brendan Carr or Jonathan Spalter understandably don’t want to talk about the fact U.S. taxpayers have already spent billions on broadband networks that were routinely half delivered by powerful telecom monopolies empowered and coddled by decades of corrupt legislative and regulatory bureaucrats. That’s the core problem; but because these companies are tethered to our domestic surveillance and first responder networks, that conversation is curiously off limits.

If the EU proposal at a “big tech tax” succeeds, you’re going to see a massive, renewed lobbying effort here in the States to implement something similar. And, as Spalter demonstrates, it’s going to come wrapped in a shell of phony altruistic concern about the kind of rural, downtrodden customers AT&T, Comcast, and Verizon have historically and repeatedly shown they didn’t give two shits about.

Filed Under: big tech, big telecom, brendan carr, broadband, digital divide, fcc, high speed internet, jonathan spalter, net neutrality, sending party pays, subsidies, telecom, telecom policy, usf
Companies: at&t, us telecom