ISPs Are Still Ripping Off A COVID Broadband Discount Program

During peak pandemic, the FCC launched the Emergency Broadband Benefit (EBB program), giving lower income Americans a $50 ($75 for those in tribal lands) discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to users if they qualified.

But (and I’m sure this will be a surprise to readers) ISPs erected cumbersome barriers to actually getting the service, or worse, actively exploited the sign up process to force struggling low-income applicants on to more expensive plans once the initial contract ended. Very much in character.

The EBB was rebranded the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout to the general public was dropped to $30 a month). But late last year, the FCC Inspector General issued a report saying that ISPs and wireless carriers were consistently and artificially inflating the number of qualified users in order to take taxpayer money they didn’t deserve.

A year has gone by, and another FCC Office of the Inspector General (OIG) report has emerged noting that, yes, ISPs and wireless providers are still ripping the program off. When a low-income user stops using a provider’s broadband service, the ISP is supposed to report this back to the FCC so that funding can be repurposed for folks who actually need it.

The OIG found that’s very often… not happening, and that dozens of ISPs were exploiting the FCC’s lack of follow through:

“We made a startling and troubling discovery: dozens of participating mobile
broadband providers de-enrolled few, if any, ACP subscribers for non-usage and, like Provider X, claimed reimbursement for all or nearly all their ACP subscribers (the suspect providers).”

The OIG also found that a large number of ISPs continue to take taxpayer money for users they never actually served in the first place; part of an ongoing investigation they’ll provide more details on down the road.

There’s an ongoing debate as to whether to renew the ACP program. Generally its been widely supported because it not only helps (some) low-income families, it throws a big chunk of additional taxpayer money into the laps of industry giants.

On the one hand, low-income users genuinely do benefit from a $30 monthly drop in their broadband bill. On the other hand, we’re effectively giving money to giant telecoms in exchange for temporarily lower rates; rates that wouldn’t be high in the first place if these same giants hadn’t spent decades dismantling most meaningful competitors and competent government oversight.

It’s why it’s important to target the real problem with U.S. telecom: consolidated telecom monopoly power (and the corruption that protects it). Instead, the FCC (in this case at the behest of Congress) often engages in regulatory theater, applying superficial external fixes to the symptoms of telecom monopoly power, while rarely taking meaningful aim (or even acknowledging) the underlying disease.