Very little government money has been spent on broadband. Federal funding for broadband dates back only to the Obama administration. And cable companies have largely not received this money. You’re thinking of something else.
> AT&T and CenturyLink accepted all funding for all states for which they accepted CAF funding. For AT&T, seventh year CAF funding totals approximately $427 million for 18 states. For CenturyLink, the total seventh year funding totals approximately $503 million for 33 states.
Over 7 years, AT&T has received half a billion dollars from the feds. That’s not a lot of money for building fiber. In rural high cost areas, where that money is supposed to be targeted, that might be like 20,000 homes. AT&T spends over $10 billion per year on wireline upgrades and maintenance: https://www.fiercetelecom.com/telecom/at-t-dedicates-40-40b-... ($16 billion in 2017). Over that 7 year period you’re talking $100+ billion in investment from AT&T versus $0.5 billion from the feds. Do you see why that money hasn’t moved the needle at all?
To my knowledge, Comcast has never received universal service fund (now called the connect America fund) money.
We can argue about whether universal service money has been used efficiently. But the idea that companies like Comcast received billions of dollars from the feds to build fiber everywhere is a very Trumpian misrepresentation (taking something with a tiny grain of truth and spinning it into a tall tale).
“On October 27, 2011, the FCC approved a six-year transfer process that would transition the money from the Universal Service Fund High-Cost Program into the new $4.5 billion a year Connect America Fund, effectively putting an end to the USF High-Cost Fund by 2018.“
“In March 2014, the FCC approved "Phase II" of the transition to the Connect America Fund, adding $1.8 billion a year in funding.”
What’s important to realize is these subsides ends up providing paying customers to these companies. As such they don’t need to cover 100% of the cost of connections only the subset of that cost that wouldn’t be covered by monthly fees.
For the most part the money never materialized. The Phase II support, for example, ended up being just $1.49 billion over 10 years, not $1.8 billion per year as in your quote: https://www.fcc.gov/consumers/guides/connect-america-fund-ph...
It doesn't matter if the subsidies cover 100% of the costs or not--the point is that the funding is a tiny fraction of what the industry already spends, and isn't enough to move the needle outside a small number of very high-cost rural places. The replacement for the connect America Fund, the Rural Broadband Opportunity Fund, plans to distribute $20 billion over a decade: https://thecounter.org/fcc-20-billion-dollar-rural-broadband.... (Again, plans.) Wireline providers invest about $40 billion annually--or around $400 billion over the next decade.
The notion that subsidies are more than a drop in the bucket (and should be expected to significantly move the needle on broadband deployment) is just false.
In the associated April 2014 Connect America Report and Order, the Commission decided that a competitive ETC that is awarded “support through the competitive bidding process will cease to receive legacy phase-down support for those specific areas upon commencement of Connect America Phase II support.”12 As of July 1, 2014, consistent with the USF/ICC Transformation Order, the Commission froze fixed competitive ETCs’ legacy support at 60%...
Also, wireline providers don’t invest $40 billion per year in extending their networks to new customers. The majority of that money is spent on maintaining and upgrading existing equipment as part of their normal operating costs. It’s like complaining they can’t simply get money without doing anything.
https://news.ycombinator.com/item?id=7709556
I just realized that you were posting on that thread as well.
We tend to think of both of them as just “broadband” today, but the regulatory structure is totally different. The central premise of the notion that telephone companies received “billions of dollars from the government” is that the government lifted rate regulation on telephone companies in the 1990s. Rate regulation told the companies what they could charge for local phone service. The argument is that phone companies made $200 billion more than they would have had had those regulations remained in place.
I disagree with that assertion for phone companies, as addressed in the thread above. But even on its own merits that argument is not applicable to cable companies. Cable companies weren’t rate regulated (except that in some places there is a regulated minimum television service they must provide at a government-specified price). There was no government action in the 1990s that contemplated subsidies to create incentives for cable companies to build fiber.