Cox Sues Rhode Island Because It Dared To Use Infrastructure Bill Money To Fund Broadband Competition

As we've mentioned a few times, $42.5 billion in taxpayer-funded broadband subsidies will soon start hitting the states next year courtesy of the 2021 infrastructure bill's Broadband, Equity And Deployment (BEAD) program. Efforts to expand affordable fiber access don't get all that much press attention in the AI hustlebro era, but the impact will be massive all the same.

Unfortunately, a ton of that money is going to be given to giant telecom monopolies with a long history of empty promises and half-completed networks. But an impressive chunk will also wind up in the hands of smaller broadband ISPs, cooperatives, city-owned electrical utilities, and municipal broadband networks, allowing them to build fiber access out into areas that would have never seen service otherwise.

Unsurprisingly, entrenched telecom giants like Verizon, Cox, AT&T, and Comcast are working hard to ensure the lion's share of this funding goes to them, and not pesky competition. That has involved overstating coverage areas so that other companies can't get funds, trying to block funds from funding direct competitors, or miring competing grant applications in costly bureaucratic grant challenges.

Since the states are in charge of fund disbursement, how corrupt and fucked up fund dispersal is will be highly state dependent. Some states, like New York, California, or Vermont, are spending big on popular community broadband networks. Other states, like Pennsylvania, are just throwing the lion's share of funding at giants like Verizon, ignoring the company's long history of sketchy subsidy abuse.

In Rhode Island, incumbent cable giant Cox Communications has filed a court challenge attempting to block the state from doling out $108.7 million to the company's competitors.

Cox is very upset that not all of the state's share of infrastructure bill broadband money is going to Cox, so they're trying to pretend the process was somehow flawed:

The cable company claims Rhode Island used flawed Internet speed data" to determine which areas are underserved and that the plan will benefit wealthy parts of the State already served with high-speed Internet in contravention of the program that it purports to implement."

Cable and phone giants have lobbied extensively (with mixed results) to make sure the majority of this infrastructure money goes to completely unserved, heavily rural locations they historically couldn't care about because of the high cost of deployment. The problem is that limited competition means that affordability is also a key consideration; so driving some new competition into these stagnant suburban and urban markets where apathetic regional monopolies like Cox do business would also be helpful.

Cox, of course, doesn't want that. Like most giant telecoms they're perfectly happy with their regional domination of largely uncompetitive U.S. broadband access, allowing them to price gouge captive customers. For years, big ISPs like Cox have taken advantage of inaccurate FCC mapping data to overstate their coverage footprints in order to downplay the lack of competition.

Now that the government has improved mapping data (in this case the state also used Ookla crowdsourced speedtest data), and it's highlighting competition and coverage gaps, Cox is suddenly upset. The Rhode Island Commerce Corporation (RICC) issued a statement correctly noting that Cox is simply angry that it may soon face new competitors in long-stagnant markets:

Let's be clear about what's behind Cox's lawsuit: It is an attempt to prevent the investment of $108.7 million in broadband infrastructure in Rhode Island, likely because it realizes that some, or even all, of that money may be awarded through a competitive process to other Internet service providers."

The RICC also noted that Cox was largely absent from earlier conversations about how the state's share of BEAD funding would be distributed, and only showed up to whine when it became clear the infrastructure bill would help fund new competitors:

Cox did not submit public comments on the design of the BEAD program, did not raise concerns at public Broadband Advisory Council meetings (where they are the sole provider represented), and declined to share its network map information during the 90-day Rhode Island Broadband Map Challenge Process. Our planning process was open and participatory, and Cox did not participate."

This is par for the course for U.S. telecom monopolies. They work tirelessly to crush all competition in a region with the help of corrupt and state federal lawmakers. Then, when somebody actually does anything that addresses regional monopoly power, they whine, and file lawsuits, and kick and scream like rich, petulant toddlers who didn't get the right toy for Christmas.

I spend pretty much every week now talking to a different municipality somewhere in the U.S. that has been able to build out affordable new fiber networks thanks to either 2021 COVID relief legislation (ARPA) or the infrastructure bill. In many instances, the funding is helping to construct new open access fiber networks that deliver locals uncapped, symmetrical gigabit fiber access for as little as $70 a month.

You can see how fat and comfortable cable giants, used to charging twice that for slower service, might not appreciate that.

These projects may not be seeing much nationwide press attention, but they're hugely impactful all the same. This being government, I'm laboring under no illusions that there won't be ample graft at the hands of lazily-regulated telecom giants. But I'm also seeing first hand how these funds are making a meaningful difference in a lot of long-neglected communities country wide.