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Comment by tssva | Hacker News Reader

I have Verizon FiOS. Installation of it was subsidized by targeted tax breaks, use of government owned right of ways, and laws which substantially limited their liability for property damaged done during installation. I'm also pretty sure Verizon used funds gained from their other services to pay for the installation.

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In most places FiOS deployment involves huge taxes, such as franchise fees and forced build-out into neighborhoods that will be unprofitable. (Tax breaks, to the extent they exist, are often carrots for the latter). Also, in many (most?) places Verizon pays the utility pole or conduit owner (usually the power company) for access to those rights of way. In Virginia, for example, you'll get a line-item on your bill for the right-of-way fee.

And in many places there is no forced build-out. The county I live in is only partially served by either FIOS or the cable company. The more rural part of the county is dependent on expensive WISP service because neither has been forced to build out into unprofitable neighborhoods.

The right-of-way fee covers costs for use of poles and conduits but also municipal right of way usage fees. The municipal right of way fees are much less than it would cost Verizon to otherwise negotiate and purchase right of ways from private property owners.

In most places telephone deployment involved huge taxes and forced build-out into counties that would be unprofitable. Also, the telephone company paid non-discriminatory fees to the pole/conduit owner.

This was often paid for / subsidized by the Universal Service Fund, because telephone service was seen as something absolutely necessary for modern life. Back in 1934.

ISPs, unfortunately, are not able to be subsidized by the Universal Service Fund. AFAIK.

Note that the Universal Service Fund is funded by a tax on telecommunications service. So a big company like Bell Atlantic (Verizon's predecessor) never received a net subsidy--the government just forced it to take money from some of its subscribers to offer below-cost service to other subscribers.

That said, the USF is a big step up from the "forced build-out" into unprofitable areas, which is what used to happen with telephone, and still happens with broadband. It highly distorts the market. E.g. if build-out requirements were imposed on Webpass, it'd basically ban their business model.

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