Report Highlights How U.S. Telcos Abandoned Rural American Broadband

So we've made it pretty clear for a long while that United States broadband ranges somewhere between mediocre and terrible thanks to the one-two punch of cash-compromised lawmakers/regulators and a lack of real broadband competition. We've also noted for a while how despite all the hype about limited gigabit broadband deployments and next-gen wireless (5G), the problem is actually getting worse in numerous markets.

In countless areas (usually the ones where poorer people live), incumbent telcos have effectively given up on broadband because it's not profitable enough, quickly enough for Wall Street's liking. As a result, telcos are refusing to upgrade aging DSL lines at any real scale, leaving cable with a bigger monopoly over broadband in countless markets country wide. That monopoly in turn lets cable broadband providers double down on all manner of bad behavior, be it comically bad customer service, privacy and net neutrality violations, or arbitrary and anti-competitive usage caps and overage fees.

A new report (pdf) by the Institute For Local Self-Reliance once again drives this point home, noting how the nation's telcos have all but given up on broadband investment outside of semi-competitive markets, leaving vast swaths of territories with "broadband" that can't even meet the FCC's 25 Mbps down, 4 Mbps up definition. But because the country's broadband maps are fundamentally terrible, telcos are routinely allowed to falsely over-state actual availability.

The report leans heavily on the form 477 data ISPs submit to the FCC. We've long noted how this data isn't particularly accurate already, and ISP lobbyists have routinely fought efforts to improve broadband mapping. In large part because a more accurate picture of the market would make it harder for Comcast and friends to pretend U.S. broadband isn't a broken market punctuated by regional monopolies with an active disdain for their user bases. As such, the group is quick to highlight how things are notably worse than the FCC's data actually suggests:

"We have deep hesitations about using this data because of its many inaccuracies, but there is no other feasible option. In any event, this provides a conservative baseline for the problems in the market - though we believe the true level of competition is worse than this analysis shows, neither is tolerable in a country that claims to support a market-driven solution for supplying broadband Internet access.

"With modern technology, it should be trivial to develop a process that is easy for ISPs to use and less likely for monopoly ISPs to game but we have not found a single person with deep knowledge of the FCC that believes it will happen in the near future."

One major problem the report explores is that because we lack a solid understanding of broadband availability, efforts to throw subsidies at the problem don't usually work out that well. As we've seen countless times, incumbent ISPs are experts at taking broadband subsidies and tax cuts, and then failing to deliver, often with zero real repercussion. The problem is downright comical in more corrupt states like West Virginia, where taxpayer money is routinely funneled into ISP coffers without oversight, resulting in some pretty epic displays of graft and incompetence.

As a result, we're throwing subsidies at a problem we don't truly understand, with some fairly obvious results if you're one of millions of consumers whose only broadband option is Comcast:

"The broadband market is broken. Comcast and Charter maintain a monopoly over 68 million people. Some 48 million households (about 122 million people) subscribe to these cable companies, whereas the four largest telecom companies combined have far fewer subscribers - only 31.6 million households (about 80.3 million people). The big telecom companies have largely abandoned rural america - their DSL networks overwhelmingly do not support broadband speeds - despite years of federal subsidies and many state grant programs."

In response, many towns and cities have eyed building their own broadband networks, but incumbent ISP lobbying plays a role here too, with more than 21 states having passed protectionist laws banning such efforts at ISP behest. Instead of fixing broadband mapping, policing fraud, embracing pro-competition policies and cracking down on ISPs that defraud taxpayers, the Ajit Pai FCC has instead decided to sweep the problem under the rug with clever math, then dismantle the consumer protections preventing monopoly abuse of uncompetitive markets (net neutrality).

The fight to actually foster something vaguely resembling competition in broadband has been raging for decades. Often because many have bought into the AT&T and Comcast fostered delusion that simply deregulating everything in telecom magically results in competition spring forth from the sidewalk. But mindless deregulation of U.S. broadband has, time and time again, only given natural monopolies free rein to double down on terrible behavior.

The report makes it clear that the real solution is complicated. It needs to include reform, public private partnerships in communities where ROI is low, the elimination of counter-productive protectionist state laws, and embracing efforts to accurately map where broadband is available and how much it costs. Only then can you actually craft useful policies that truly drive broadband competition and improve broadband coverage instead of paying empty lip service to the concept. As the Ajit Pai era once again illustrates, these are lessons Americans aggressively refuse to learn.