from don’t-pass-go,-don’t-recover-$200 department
In the era of crypto, NFT, and “web3,” there has been no limit to the hype about the (largely money-making) potential of the ever-evolving Internet. Fundamental, but less sexy political issues, such as fighting monopolization, or affordable and even broadband coverage, have received less consideration in the era of metaverse hype.
This is once again evident by the news that newly elected New York City Mayor Eric Adams has “suspended” the city’s major new affordable broadband plan. I wrote about the massive, long-studied 2020 plan for Protocol, noting how it hoped to spend about $2.1 billion to ensure broad and competitive access to fiber and wireless networks, spur competition, expand access and reduce consumer costs.
I had been hearing since last year that the plan was facing efforts to water it down thanks to relentless lobbying from regional incumbents like Verizon, who weren’t keen on this “much more competition” story. . Monopoly lobbying absolutely played a role in sabotaging this plan, leaving a group of greedy competitors standing around with dumb looks on their faces:
“At a city council technology committee hearing in mid-May, the city’s new chief technology officer, Matthew Fraser, said the program was being reassessed.
And the next phase of the project — a $157 million effort that would build public broadband infrastructure — has yet to kick off. This is despite the city signing contracts with internet service providers, according to officials from the Office of Technology and Innovation.
“Eleven service providers, many of them minority-owned, are ready and waiting to lay the fiber optic cables needed for a major broadband expansion,” said Danny Fuchs, managing partner at HR&A Advisors, who worked on the internet master plan.
Despite being one of the wealthiest cities in America, New York suffers from the same broadband issues as the rest of America. Namely, the market has been carved up and dominated by a handful of giant regional monopolies and duopolies, resulting in crap customer service, patchy availability, inconsistent speeds, and high prices.
Federal, state and local bipartisan corruption ensures that nothing really changes drastically.
As a result, just like the rest of the country, policymakers in New York have begun giving endless subsidies, tax breaks, and regulatory favors to companies like Verizon in exchange for uniform broadband availability that , mysteriously, never seems to happen. The city sued Verizon in 2017, claiming it failed to honor an agreement reached with the Bloomberg administration in 2008 that promised uniform fiber across all five boroughs by 2014. It’s now 2022, and huge availability and affordability gaps remain.
So New York City tried to do something new. Namely, a large investment in a centralized and fairly open fiber network that invited multiple competitors, which planners hoped would expand access to an additional 1.2 million homes and save each New Yorker about $40 per month. The plan took years of collaborative planning to develop, and backers are pissed that it’s tossed in the trash:
Greta Byrum said the plan was “years in the making” and included extensive research into New Yorkers’ internet habits as well as detailed economic and technical calculations.
“A lot of thought, time and effort – and funding, frankly – went into the project,” she said. “I don’t know why we would go back to the drawing board before trying to do something designed with equity at its core.”
The fact that this has been scuttled by lobbyists and the corruption is obscured by many pointing fingers claiming the plan is only ‘pending’ or ‘under review’. The tell-tale in this case is that city leaders are now reproducing the telecom industry’s argument that you shouldn’t fund broadband projects that are “duplicated.” As in, you shouldn’t finance any projects that would pose a competitive threat to existing dominant suppliers:
At the May budget hearing, Fraser said the plan was “being reviewed” to ensure it didn’t call for new broadband infrastructure in places where it was already present. He attributed the delay to the “fractured nature” of the city’s tech agencies before the reorganization.
There’s an absolutely historic amount of money on broadband right now thanks to the COVID homeschooling anger, COVID aid, and the infrastructure bill. Unable to stop this momentum at the federal level, monopoly lobbyists are working overtime at the state and local level to ensure that this unprecedented flood of new public funds benefits them, not competitors and new entrants. on the market.
To do this, they convince policy makers that all new funds should be dedicated exclusively to their bottomless quest to provide access to completely unserved Locations. But our broadband maps greatly overestimate broadband availability due to… corruption. And most of our state and municipal systems to make sure the monopolies actually use that money to improve access are also broken because of…corruption.
Big ISPs like AT&T, Verizon, and Comcast want this broken, profitable mess to continue in perpetuity. They want us to keep pumping money into their empty promises to finally finish a job they were paid for ten years ago. They certainly don’t want the billions in new broadband funding going to things like open-access fiber networks or widespread competition (a central goal of the NYC plan).
United States policy and federal telecommunications policy are so broken that making absolutely anything other than gutting regulatory oversight while dumping countless billions on pampered telecom monopolies is seen as extreme and radical.
The dominant telecommunications policy paradigm in the United States is to literally do whatever the regional monopolies want (approve mergers, gut consumer protection laws, give tax cuts, cover them with subsidies), then cough loudly and wave away when some underfunded academic or research group points out (with decades of hard data) that this approach doesn’t work.
Adams is of course the same mayor who went to comical lengths to hype and support crypto, so it’s very important for 2022 that broadband affordability is relegated to the back as an irrelevant afterthought under the din of crypto hype. After all, the “free market” will solve any remaining problems with American broadband, despite the fact that it hasn’t worked at any time in the last thirty years.
Having covered this sector for most of that time, I would wager that New York City’s broadband plan will reappear in the next few years as a faint shadow of itself. This new version will have been written by Verizon lobbyists in an effort to give Verizon millions more in funds to complete fiber builds for a decade, with healthy competition after the fact.
In the meantime, cryptocurrency scams and Web3 bluster will continue to prioritize media and policymakers on core issues like broadband affordability and monopoly reform.
Filed Under: 5g, broadband, competition, digital divide, duopolies, eric adams, broadband internet, monopolies, new york city, regulatory capture