Pennsylvania Once Again Shows What Broadband Corruption Looks Like: Doles Out Millions In Dodgy, Non-Transparent Grants To Comcast, Verizon In Favored Political Districts

By now we’ve laid out the case that U.S. broadband is spotty, expensive, and slow due to regional monopolies and the corruption that protects them. Despite this, every time the U.S. decides to spend taxpayer money on broadband, said corruption usually ensures that we throw most of that money into the laps of the same giant companies responsible for our broadband woes to begin with.

America loves dumping billions of dollars into the accounts of AT&T, Comcast, Verizon, or other giants in exchange for layoffs and half-deployed networks. Companies that have lobbied for decades to crush all competition and defang regulators to ensure U.S. broadband remains as expensive and spotty as possible get billions of dollars to do very little (or nothing). It’s utterly pathological and it never changes.

Case in point: Pennsylvania Governor Josh Shapiro recently announced that the state would be doling out $204 Million to deliver broadband to 100,000 Pennsylvanians in 42 counties. Officials insist that project applications were evaluated based on “experience and ability of the applicant to successfully deploy high-speed broadband service,” and “affordability standards that include a low-cost option.” 

The problem: nearly all the money was simply dropped into the laps of Comcast and Verizon, the latter of which has an extremely long history of ripping off Pennsylvania telecom subsidy programs in exchange for networks that are routinely not fully delivered. Verizon was at the heart of a major scandal on this front in the 90s, and again in the 2000s when accused of neglecting its aging DSL networks.

Another problem: smaller ISPs, cooperatives, and community broadband networks (which have a solid track record of deploying more affordable access) were ignored entirely. Penn State Telecommunications Professor Sascha Meinrath tells me that community broadband ISPs and nonprofits that promised to deploy faster broadband at much lower costs were completely snubbed:

“I’ve now talked to multiple ISPs that offered a faster, cheaper service but got turned down,” he said. “And I’m like, so wait a second…what criteria were they using to decide on these two companies? There’s just a real lack of clarity as to what’s transpired here, frankly.”

Worse, Meinrath notes that the state politicians in charge of the organization in charge of determining who won awards (the Pennsylvania Broadband Development Authority (PBDA)) conveniently wound up driving most of the awards to their own districts:

“All four of the board members — like Republican Senator Gene Yaw — have projects in their own very small districts, which statistically speaking is an incredible occurrence, because only one tenth to one twentieth of the state is covered by these grants.”

There are questions about how any of this is even legal. In several of the grant applications the state appears to have twisted itself in knots to approve funding for Comcast and Verizon — in key political districts — without bothering to offer the slightest transparency into how the state made determinations.

Pennsylvania is also one of 17 states where telecoms like Comcast lobbied for what’s effectively a state ban on community-owned broadband networks, despite the fact such networks routinely help drive affordable access — and competition — to broken broadband markets.

In PA policy conversations, Meinrath notes that the PA government likes to pretend that this law doesn’t exist, despite the section in question being literally titled “prohibition against political subdivision broadband services deployment.” The entire state policy apparatus is custom built to make it difficult to challenge monopolies — while simultaneously denying that this is happening:

“They [giant private providers] have a right at first refusal for muni networks, but also for public private partnerships, which again, this is not even acknowledged by the state,” Meinrath said. “You can imagine if there is a law that is on the books – Title 66, paragraph 3014, subpart H – but declared to not exist, officially – it makes it very awkward.”

This is all par for the course. Politicians from both parties will wax poetic endlessly about the need to “bridge the digital divide.” But even the best intentioned are too politically timid to acknowledge that monopolization and competition problems exist, much less propose solutions.

So when pressured to “fix the problem,” their solution is almost always to throw a bunch of money into the laps of politically powerful telecom monopolies responsible for much of the problem in the first place. Companies that are, as extensions of our domestic surveillance systems, now well beyond the reach of coherent reason, accountability, or the law.

There are billions more in broadband subsidies headed to the states via the $42 billion in broadband subsidies included in the infrastructure bill. But unlike Pennsylvania’s recent grant awards, the federal process will actually involve something genuinely resembling transparency, hopefully giving small businesses, cooperatives, and community owned broadband networks a better shot.

Still, telecom monopolies like Comcast and Verizon are there too, working overtime to ensure they not only hoover up the lion’s share of the funding, but don’t face any sort of “onerous” requirements, like having to actually deliver uniform, affordable broadband access to poor people.