Verizon, T-Mobile Overstate Wireless Coverage To Nab Billions In Undeserved Subsidies

As more than $50 billion in broadband subsidies begin to flow, entrenched U.S. broadband providers are working overtime to try and secure their share of it by any means necessary. That has included sabotaging grant applications from competitors, changing state laws to dictate who can or can't get these subsidies, and falsely inflating their actual broadband coverage to grab subsidies for areas they don't actually serve.

Case in point: wireless providers like Verizon and T-Mobile have been dramatically overstating their 5G coverage to try and grab government subsidies for their fixed wireless access (FWA) broadband service. FWA is basically 5G for home use; wireless providers have been making some fairly modest inroads selling the service to users tired of substandard DSL or expensive cable service.

But their claims of who can actually get this service have been comically overstated to grab subsidies they may not deserve, both Bloomberg and Telecompetitor report:

According to Bloomberg, T-Mobile claims its fixed wireless offering can serve 45 million addresses, or more than a third of the 114 million locations listed on the government (a.k.a. FCC) maps. A Telecompetitor double-check of the map data updated February 1 shows a somewhat lower 40 million addresses for T-Mobile that would be considered served according to BEAD program rules.

Verizon claims it can cover 19 million locations, Bloomberg said. Here, too, Telecompetitor found a somewhat lower number between 17 million and 18 million locations that would be considered served by Verizon as of the February 1 map update.

Here's the problem: by overstating their 5G home coverage in rural areas, wireless carriers are potentially preventing millions of addresses from being eligible for funding in the $42.5 billion Broadband Equity Access and Deployment (BEAD) program.

Numerous local cooperatives, municipalities, and locally-owned utilities have been stepping up to deploy fiber in areas long neglected by dominant local monopolies. This flood of new competitors keen on deploying less expensive fiber access is a nightmare for all incumbents, whether we're talking about Comcast or Charter, or the nation's wireless providers.

The FCC and NTIA have generally done a good job noting that fiber should receive subsidy priority, given that if you're going to spend taxpayer money on broadband, it should be on the future-proof variety, and not on capacity-constrained services like Starlink or 5G... unless absolutely nothing better is available. 5G simply faces spectrum capacity and other constraints fiber doesn't, including restrictions on video streaming normalized in the wake of the death of any real net neutrality oversight.

Due to shaky maps, there's going to be an ocean of challenges across millions of addresses, and the FCC has generally been both feckless and incompetent when it comes to standing up to ISPs on any issue of importance, whether that's directly ripping off consumers or overstating service availability. Their track record so far on correcting challenges to ISP coverage claims are mixed at best:

It's important to note that stakeholders had the opportunity to challenge the FCC broadband map data. It's also worth noting, though, that sources have told Telecompetitor that the FCC only approved a small portion of challenges made and offered little or no detail to explain why certain challenges were rejected.

Keep in mind that $42.5 billion in BEAD broadband subsidies from the infrastructure bill is only just starting to flow. We're going to be inundated by a flood of stories showcasing incumbent telecom giants getting money for service they don't deliver, in areas they don't actually reach. I know this because this is how it's always been; and U.S. telecom regulators, consistently worried about their post-FCC political careers at telecom industry think tanks, routinely lack the backbone for real reform.