Frontier deliberately denied fiber to millions

The question of data-caps (and other forms of network discrimination, like degrading connections from services that compete with the carrier’s own services, or that have not paid for “premium” carriage on the carrier’s network), turns on three questions:


1. The distinctive nature of broadband


2. The factual question of whether these practices are necessary for “network management”


3. If so, whether the network management issue is the result of underinvestment in the network


1. The distinctive nature of broadband


Broadband isn’t a VoD service, nor is it a pornography distribution system, nor is a way to do telemedicine. It’s the nervous system of the 21st century.


Broadband is never a private enterprise. The only way to create and maintain broadband networks is to use public rights of way that cannot be purchased on the market at a price that would make the business viable: buying the right to wire up every building in NYC - or the right to run a long-haul wire from NYC to LA - would exhaust all possible profits for Verizon or Comcast for a century or more.


Instead, broadband carriers always, always rely on an incalculably valuable public subsidy. The subsidy is given to the carriers with the expectation that they will create and maintain a high-quality network that is sufficiently provisioned to perform the duties of a digital nervous system to the public providing that subsidy.


2. The factual question of whether these practices are necessary for “network management”


Leaks from the carriers have revealed that this was always a pretense, not a reflection of any technical reality.


https://www.reddit.com/r/technology/comments/3rnfnm/leak_of_comcast_documents_detailing_the_coming/


If there was any doubt, it’s been settled by the lifting of the caps, which was not attended by “congestion” or the other horribles the carriers warned us of. IOW: who

are you going to believe: the telco lobbyists, or the evidence of your own lying broadband connection?


https://pluralistic.net/2020/04/27/in-this-together/#concast


3. If so, whether the network management issue is the result of underinvestment in the network


But US broadband speeds – with and without caps – are the worst, and most expensive, in the rich world, and also trail many poorer nations for price and performance. The telcoms sector’s capex has fallen off a cliff since the Trump election, which nerfed the FCC’s willingness to do ANYTHING to hold the companies it regulates to account, and also emboldened the FCC to ignore reality in favor of spin (for example, ignoring independent audits of broadband penetration and quality in favor of the industry’s rosy, fact-free self-assessments).


Most recently the Frontier bankruptcy filings has revealed what we all already knew:


https://www.eff.org/deeplinks/2020/04/frontiers-bankruptcy-reveals-cynical-choice-deny-profitable-fiber-millions


* The company viewed maintaining monopolies (by lobbying against the provision of competing, publicly owned fiber networks) as a preferable, cheaper alternative to investing in infrastructure, literally booking its monopoly carriage for 1mm rural US households as an asset on the basis that it could charge these households more for worse speeds, and noting that lobbying their state reps was cheaper than upgrading the networks to compete with public alternatives


* The company’s execs - whose compensation was largely stock based - refused to do anything that would lower stock price, and this meant that they would not take on ANY investment with an amortization schedule of more than 5 years, because telcoms stock analysts would downrate any carrier that reduced its dividends to invest in >5 year infrastructure projects. Frontier’s own internal calculus predicted that a 10 year investment in 100gb fiber - literally thousands of times faster than the 20th century DSL it specializes in - would net it $1.9B over ten years on a $1B investment, but concluded that this investment was not practical because execs didn’t want to see their takehome pay slashed by short-sellers who were allergic to long-term investment.


Frontier left millions - MILLIONS - of American households on slow DSL rather than blazing fast fiber, not because it wouldn’t be profitable to connect them, nor because it wouldn’t be profitable ENOUGH to connect them, but because it wouldn’t be profitable enough OVER LESS THAN FIVE YEARS to connect them.


Those are the households trying to get their educations, do their jobs, seek medical care, stay connected to their families, tend to their finances, and engage in civics and politics over copper infrastructure that dates to the previous century.


tldr: this is why we can’t have nice things:


* Carriers act as though they are running private enterprises when really they receive trillions in subsidies to run public utilities


* Regulators, especially under the current admin, do less than nothing to discipline firms that fail to act in the public interest, bending over backwards to let them cheat and lie


* Decisionmakers at the carriers explicitly view their job as improving share prices, rather than quality of service, or better pricing, and it’s much cheaper to suborn legislatures so that you can maintain a low-quality/high-price monopoly than it is to compete in the market.