You Already Paid for Net Neutrality
23 March 2017
As with other infrastructure projects, taxpayer dollars have been granted to Internet providers for the purpose of expanding and upgrading their infrastructure. At a high level, this is fine because Internet is an important and arguably critical service in the modern world. Ensuring networks are up to modern standards is important for providing access to information, education, and other services. However, the network improvements expected from many of these grants have never materialized. Grants and subsidies amounting to over 400 billion taxpayer dollars by some counts have rarely resulted in larger or better networks. Despite those grants, there are still people in the U.S. who do not have Internet speeds available to them that are usable for accessing modern websites.
ISPs have argued that if net neutrality dies and the regulatory schemes they support come to pass, they will then provide Internet speeds that are competitive with the rest of the world. In late 2015, the United States ranked 42nd in average Internet speeds out of 55 countries ranked by Akamai (a huge cloud services provider), despite being the country that is home to some of the largest online companies. The rating puts the U.S. below the global average for Internet speeds. The problem with the ISP argument that network improvements will come with a non-neutral Internet is that until recently, there has been little with regards to enforced net neutrality regulations. ISPs already have a rocky past with regards to keeping promises of network improvements, net neutrality or not.
In New York, New Jersey, and Pennsylvania, Verizon promised expansions to their fiber network (FiOS) in return for government subsidies and benefits. However, while the government benefits were provided, at massive taxpayer expense, Verizon never expanded their networks. In New Jersey, the company even had its employees help it convince the New Jersey Board of Public Utilities that DSL and the Verizon LTE network qualified for meeting the terms of its agreement. LTE service from Verizon (and from most providers) is expensive, has data caps, and compared to fiber is extremely slow. Verizon even argued that the terms of the agreement did not require them to actually connect anything to the fiber they did install, just that they needed to run fiber down the street in front. What this means for taxpayers is that although they paid for fiber Internet service to be expanded to schools, libraries, and in some cases themselves, they got no return for their money.
In West Virginia, which in 2016 was still ranked almost last in the country for broadband Internet access, Frontier was accused of misusing millions of dollars of Federal funds for Internet improvement. $40 million was intended for building a network that would improve ISPs’ ability to provide service to some 700,000 homes and over 100,000 businesses. Lawsuits from 2014 allege that Frontier claimed that they had installed almost double the fiber they actually installed. At the same time, Frontier inflated their prices by overcharging for administrative activities and vehicles, in amounts that were at times more expensive than the actual construction itself. Even worse, other lawsuits allege that Frontier used the federal funding to further their monopoly on Internet service by building what’s called a last-mile network to homes for their own service, rather than building a shared network for multiple ISPs to serve homes. In fact, after the Frontier project was completed, West Virginia ranked even worse for Internet access, at 53rd (including Guam, Puerto Rico, and D.C.) from 48th.
In all, the U.S. has spent some $400 billion to deploy fiber broadband connectivity. Despite those investments, the U.S. is far from first in the world when it comes to Internet service. Despite hundreds of billions of dollars in government help to improve networks, ISPs still allege that they need to raise prices, cap and throttle data, and sell Internet in a similar fashion to cable. The fact that Internet providers can’t be held even to promises they made to local and federal governments underscores the need for better regulation and net neutrality. As taxpayers, we have paid thousands of dollars for Internet service improvements that have never happened, not to mention money spent directly paying for Internet service. Without regulations and enforced net neutrality rules, this stands to get worse.