rate regulation – Techdirt (original) (raw)

GOP ‘Investigates’ NTIA For Wanting To Make Broadband Affordable To Poor People

from the this-is-why-we-can't-have-nice-things dept

We’ve noted a few times that states will soon receive more than $42.5 billion in taxpayer funded broadband subsidies courtesy of the 2021 infrastructure bill. A lot of that money will go to big giant monopolies with terrible track records on subsidy fraud. But a lot of it is also poised to go toward super popular community-owned broadband networks or cooperatives that might not exist without that funding. It should be a mixed bag, but largely beneficial for driving competition to market.

The BEAD (Broadband Equity Access And Deployment) grant program is overseen by the NTIA, and was made possible by the Infrastructure Investment and Jobs Act (IIJA). The law has a small caveat: ISPs that take taxpayer money have to make at least a passing effort to ensure there’s a base-level introductory tier that’s semi-affordable for poor people. That’s it.

This was of course enough to drive telecom giants like AT&T and Comcast into a major hissy fit back in April. Most major telecoms have a long, elaborate history of taking taxpayer money then not delivering on the actual fiber networks, and they don’t want anything interfering with that proud tradition.

So telecoms whined incessantly that these minor affordability requirements (which I doubt will even be enforced by an increasingly feckless U.S. telecom regulatory apparatus) were illegal efforts at “rate regulation.” AT&T, in particular, has been warning states if they are required to provide cheaper broadband to poor people, they’ll take their ball and go home.

Given the GOP works in perfect policy symmetry with telecom monopolies, they’ve now joined the outrage parade. The GOP House Energy and Commerce Committee has announced an “investigation” into the NTIA for “trying to impose illegal rate regulation:”

“The letter comes amid concerns that NTIA is unlawfully pressuring states to rate regulate low-cost broadband plans required by the BEAD Program.”

This is, to be clear, corruption-fueled telecom industry puppetry from a party that opposed the infrastructure bill (yet routinely tries to take credit for its benefits among constituents). A party that has worked tirelessly (with some help from Democrats) to ensure telecom giants see neither meaningful competition nor oversight, resulting in expensive, spotty, and slow broadband.

The law in question, IIJA, delegates fund management to the states, which should start receiving money this fall. It also requires that providers that take taxpayer money provide at least one “low-cost broadband service option for eligible subscribers.” But the law also says the NTIA may not “regulate the rates charged for broadband service.” At a hearing last May, NTIA Administrator Alan Davidson put it this way:

“The statute requires that there be a low-cost service option. We do not believe the states are regulating rates here. We believe that this is a condition to get a federal grant. Nobody’s requiring a service provider to follow these rates, people do not have to participate in the program.”

Again, I suspect this was to never be enforced with any zeal; telecom giants already broadly enjoy corruption fueled regulatory capture, all but own countless state legislatures, and, as extremely patriotic participants in our vast domestic surveillance initiatives, are broadly considered beyond the reach of under-funded regulators or a corrupt Congress.

Big ISPs have always been terrified of even the faintest idea that anybody in government would so much as think about “rate regulation” (or any attempt to stop them from exploiting their regional monopolies to rip off captive customers). Even if, thanks to regulatory capture and widespread U.S. corruption, that hasn’t been a serious threat to their regional fiefdoms any time in the last quarter century.

U.S. regulators can barely even acknowledge that monopolies harm competition and consumers, much less pursue a solution with any zeal. The best we tend to get are these sort of late in the game attempts to ask nicely if big ISPs will try to be ethical. And it’s all poised to get even more feckless now that the Supreme Court has dismantled independent regulatory authority.

Large, politically influential ISPs like AT&T want to take taxpayer money with absolutely no strings attached. They also have tried very hard to make sure most of the taxpayer money goes to them, and not actual communities or smaller competitors. And the GOP vision on telecom is, if it’s not yet clear, to let these widely disliked monopolies do pretty much whatever they want.

That gets dressed up as serious adult policymaking in press and policy circles, but it’s really just corruption and regulatory capture wearing an ugly hat.

Filed Under: affordable broadband, alan davidson, BEAD, broadband, congress, gop, house energy & commerce committee, ntia, rate regulation

Court Supports NY State’s Quest To Require $15 Broadband For Poor People, Much To Big Telecom’s Horror

from the do-not-pass-go,-do-not-collect-$200 dept

Fri, May 3rd 2024 05:30am - Karl Bode

When the Trump administration killed net neutrality, telecom industry giants convinced them to push their luck and declared that not only would federal regulators no longer try to meaningfully oversee telecom giants like Comcast and AT&T, but that states couldn’t either. They got greedy.

The courts didn’t like that much, repeatedly ruling that the FCC can’t abdicate its authority over broadband consumer protection, then turn around tell states what they can or can’t do.

The courts took that stance again last week, with a new ruling by the US Court of Appeals for the 2nd Circuit restoring a New York State law (the Affordable Broadband Act) requiring that ISPs provide low-income state residents $15 broadband at speeds of 25 Mbps. The law was blocked in June of 2021 by a US District Judge who claimed that the state law was preempted by the federal net neutrality repeal.

Giant ISPs, and the Trump administration officials who love them, desperately tried to insist that states were magically barred from regulating broadband because the Trump administration said so. But the appeals court ruled, once again, those efforts aren’t supported by logic or the law:

“the ABA is not conflict-preempted by the Federal Communications Commission’s 2018 order classifying broadband as an information service. That order stripped the agency of its authority to regulate the rates charged for broadband Internet, and a federal agency cannot exclude states from regulating in an area where the agency itself lacks regulatory authority. Accordingly, we REVERSE the judgment of the district court and VACATE the permanent injunction.”

This ruling is once again good news for future fights over net neutrality and broadband consumer protection, Stanford Law Professor and net neutrality expert Barbara van Schewick notes in a statement:

“Today’s decision means that if a future FCC again decided to abdicate its oversight over broadband like it did in 2017, the states have strong legal precedent, across circuits, to institute their own protections or re-activate dormant ones.”

Telecom lobbyists have spent years lobbying to ensure federal broadband oversight is as captured and feckless as possible. And, with the occasional exception, they’ve largely succeeded. Big telecom had really hoped they could extend that winning streak even further and bar states from standing up to them as well, but so far that really hasn’t gone as planned.

One of the things that absolutely terrifies telecom monopoly lobbyists is the idea of rate regulation, or that government would ever stop them from ripping off captive customers stuck in uncompetitive markets. It’s never been a serious threat on the federal level due to regulatory capture and lobbying, even though it’s thrown around a lot by monopoly apologists as a terrifying bogeyman akin to leprosy.

Here you not only have a state retaining its authority to protect consumers from monopoly harm, but dictating to them that they must provide poor people with 25 Mbps broadband (which really costs ISPs at Comcast’s scale virtually nothing to provide in the gigabit era). Still, it’s the kind of ruling that’s going to give AT&T and Comcast lobbyists (and consultants and think tank proxies) cold sweats for years.

Filed Under: 25 mbps, affordable broadband act, broadband, low income, new york state, rate regulation

Cable Companies Tell The Government That Bullshit Fees Are Good, Actually

from the this-is-why-we-can't-have-nice-things dept

Thu, Feb 22nd 2024 05:29am - Karl Bode

Last December, the Biden FCC proposed a basic plan to ban some of the shitty fees cable and broadband companies use to falsely advertise a lower price and jack up the cost of service. Despite the fact your cable TV and broadband bills are packed with bullshit fees, the FCC was only taking specific aim at banning early termination fees (ETFs) and restrictive long-term contracts.

Despite this being a belated, bare minimum effort, telecom industry loyal Republicans had an immediate hissy fit, insisting that the FCC was engaged in “rate regulation” (it wasn’t) of an incredibly healthy and competitive market (it isn’t).

And now policy groups representing Comcast and Charter have filed complaints with the FCC, insisting that punitive surcharges are actually a good thing, resulting in more loyal customers and lower prices:

The NCTA claimed that banning early termination fees would hurt consumers. “Discounted plans with ETFs are an advantageous choice for some consumers,” the lobby group said. The NCTA said the video industry is “hyper-competitive,” and that it is easy for customers to switch providers.

“In response to these marketplace realities, some cable operators offer discounts for consumers who choose to agree to remain customers for a longer term,” the NCTA said. “Longer subscriber commitments decrease a cable operator’s subscriber acquisition costs and provide a more predictable revenue stream, which in turn enables a cable operator to offer discounted monthly rates.”

While streaming has brought some added and welcome competition to the TV space, most users are still generally locked into cable TV via triple play cable bundles. The broadband market component of that bundle remains very uncompetitive in most U.S. markets.

When you drop the cable part of the bundle, a company like Comcast will just charge you significantly more for broadband service. They also lock users into long-term contracts with ETFs to keep users from switching to competitors (assuming there are any). There’s also a long list of dumb additional fees the FCC isn’t touching that basically let these companies routinely engage in false advertising on pricing.

The idea that any of this is actually good for users is bullshit.

U.S. broadband and TV consumer protection usually goes something like this: Democrats will do some feckless, bare minimum, years overdue effort to protect consumers from getting ripped off so they can show that they’re doing something. See: this FCC effort on ETFs, the FTC attempt to finally make service cancellations easier, and the FCC’s recent 30-year late acknowledgment that discrimination has historically occurred in broadband deployment (they didn’t fix the problem, they just acknowledged it).

Republicans will work in lockstep with giant telecom monopolies like AT&T and Comcast to pretend that whatever bare bones bullshit Democrats are attempting is akin to extremist socialist puppy torture, ensuring the effort is either blocked or weakened to the point of uselessness. Press outlets will then “both sides” the issue, giving corrupt telecom industry earlobe nibblers policy credibility they don’t deserve.

It’s why it’s 2024 and U.S. regulators still haven’t protected consumers from even the most basic of anti-competitive behaviors by the likes of AT&T and Comcast. It’s corrupt fecklessness dressed up as reason and “free markets.” It’s why U.S. broadband is expensive and uncompetitive; it’s why cable TV and broadband customer service sucks; it’s why U.S. broadband is so profoundly spotty and mediocre; and it’s why your 80cablebillsomehowturnsintoa80 cable bill somehow turns into a 80cablebillsomehowturnsintoa130 cable bill when the check finally comes due.

But the corruption at the heart of this dysfunction goes well beyond telecom and dumb cable fees. And once the Supreme Court axes Chevron (which will limit regulatory independence to make informed policy choices based on the law), pretty much any regulatory reform effort will get bogged down in the courts, quite by design. It’s a 40+ year plan for near-zero federal accountability by corporate America.

I’m not sure people have generally woken up to how badly looming Supreme Court rulings are going to break U.S. consumer protection, environmental reforms, labor protections, and U.S. public safety, but I don’t expect it will take too long before the impact becomes abundantly clear. At which point, annoying cable TV fees will be the least of your families’ worries.

Filed Under: broadband, consumer protection, early termination fees, etf, fees, ftc, long term contracts, prices, rate regulation

House Passes Bill Attempting To Gut Net Neutrality, Supporters Declare The Internet Saved

from the up-is-down dept

Mon, Apr 18th 2016 02:07pm - Karl Bode

As we’ve been discussing, the House has been pushing a new bill dubbed the No Rate Regulation of Broadband Internet Access Act” (pdf). As the name implies, the bill is being framed as a way to keep an “out of control” government from imposing new price caps on broadband, not coincidentally as the broadband industry increasingly eyes usage caps and overages to take advantage of a lack of sector competition. The bill has numerous problems, not least of which being that a special definition of “rate regulation” included in the bill would effectively prevent the FCC from doing, well, anything.

Of course despite these problems the House has passed the measure 241 to 173, with folks like Marsha Blackburn insisting she’s saved the day:

“We all know that what they’d like to do is regulate the Internet so they can tax the Internet, so they could then come in and set all the rates,” said Rep. Marsha Blackburn, R-Tenn.”

With most people still not really even understanding what the Internet is, House supporters of the bill have great success in framing net neutrality as an attempt to tax the Internet. The primary pusher of the bill, Illinois Representative Adam Kinzinger, proudly proclaimed at his website that the net neutrality-killing bill would actually foster greater innovation and “better services” for consumers:

“Since its inception, the Internet has been free from rate regulation and has thrived under that model. Both Chairman Wheeler and President Obama assured Congress and the public that any regulations that were adopted under the open Internet order would refrain from allowing the federal government to regulate rates of broadband Internet access. H.R. 2666 codifies both the President?s and Chairman Wheelers? past promises and will allow innovative companies to do what they do best: create new products and better services to benefit consumers.”

Of course by gutting FCC authority over an un-competitive broadband market you’d obviously be doing the exact opposite, though given that AT&T is a top Kizinger donor, he’s apparently willing to overlook any concerns on that front. Fortunately the White House has stated it intends to veto this latest bill should it wind its way through the Senate, making the effort an entirely empty gesture — outside of it being a public oath of fealty to telecom campaign contributors.

As the EFF is quick to note, those who thought the neutrality fight was over last February when the FCC voted to approve the rules need to realize it’s going to take constant fighting and public attention to keep those rules in place. The Presidential election and the ongoing industry lawsuits against the FCC remain the biggest threat to the rules, though no limit of bills continue to be introduced that aim to cut neutrality off at the knees, usually under the guise of trying to save the Internet from “Internet populists” and a power-mad FCC.

Filed Under: congress, fcc, marsha blackburn, net neutrality, rate regulation, title ii