I wrote a sentence in a blog the other day that stuck with me: “Fiber is not automatically a great technology – it can be a great technology when operated by a great ISP.” It’s becoming clearer to me over time that much of our broadband grief in this country comes from what I call bad actors. By this, I mean ISPs that put quarterly earnings above customers. Almost all of the troubles we see with rural broadband comes directly from the behavior of bad actors.
The original bad actors are the big telcos. These companies decided decades ago that they were going to stop maintaining rural networks – and they did so with a vengeance. They cut back drastically on the rural technician workforce. They closed businesses offices everywhere so that customers had to talk with people who had no idea where they live. Year after year, the telcos reduced the amount of maintenance capital that could be used to fix customer problems until the budgets are nearly zero.
Why do I call the big telcos bad actors? They purposefully let copper networks deteriorate. Each big telco made a decision in the boardroom to milk revenues out of remaining copper customers while spending the bare minimum amount of money needed to keep the lights on.
We know big telcos could have done much better. Many of the small telcos across the country took a different path. Many of them worked to keep copper in good operating condition and upgraded DSL technology several times to bring rural DSL download speeds between 10 Mbps and 30 Mbps. These companies also didn’t stop doing maintenance or cut back on customer service. We saw the same thing in places like Germany where the big telcos have gotten the most possible out of old copper and DSL.
What really made the big telcos into bad actors was when they took huge amounts of funding to make DSL better and largely pocketed the money instead of providing upgrades. I’ve written about the disaster of the CAF II program many times. The FCC should never have given this money to the telcos, but when they did, the big telcos purposefully misused the funds – that’s being a bad actor.
The big telcos aren’t the only bad actors. The big cable companies are slipping into bad actor mode. The cable companies had to compete against DSL for the first decade or so after introducing broadband, but they’ve won that battle now and are becoming monopolies – in many markets where AT&T walked away from DSL recently, the cable company is now a monopoly.
There are a number of reasons why I now consider big cable companies to be bad actors. Their billing practices are deceptive and a significant portion of every bill is now buried in hidden fees. The cable companies use data caps that punish homes for using the bandwidth they’ve purchased. The cable companies have notoriously dreadful customer service, the worst of any other corporations in the US – the public likes the IRS and funeral homes more than they like Comcast.
The big cable companies are also headed down the path of neglecting networks. In every city I’ve studied, there are some neighborhoods that have sluggish broadband – and the cable companies don’t bother spending the money to fix problems. The cable companies elected to not implement the upgrade for upload speeds that were part of DOCSIS 3.1 and are quietly ignoring the upload crisis right now. If the cable companies cared about customers more than the bottom line, they would profusely apologize about the upload performance that has crippled millions of homes during the pandemic and would be doing everything in their power to boost upload speeds – instead, I hear only crickets.
This all matters because the federal government continues to give money to the bad actors. The FCC is flowing an additional $1.5 billion to the big telcos this year from the CAF II program. Big telcos and cable companies have won billions in the recent RDOF auction. There is some chance that those companies won’t build everything they should or will cut corners and build the absolute minimum needed to fulfill the grant requirements. But even if they build what they’ve promised, they are likely going to continue taking advantage of customers. Is there any reason to think that a big telco is going to take any better long-term care of a rural fiber network than it has done with copper? It’s not hard to predict that bad actors still won’t fund sufficient technicians or enough maintenance capital. Unfortunately, but bad actors are unlikely to get better. If I had a magic wand the bad actors would never see another penny of federal subsidy – they’ve shown repeatedly that they don’t deserve it.