back to article US telcos reject broadband cash as connections drop

US telcos are turning up their noses at broadband build-out stimulus funds just as US broadband growth hits a record low. Despite the Obama administration's offer of $4.7bn in broadband grants, and its stated intent to make broadband available to all Americans, AT&T, Verizon and Comcast couldn't be bothered, and appear to be …

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Grenade

Fucking stupid

These guys need to be hit with a big fucking stick, not persuaded with carrots. They should be forced to have pricing reflect cost, and charge per GB. If they had done that in the first place they'd have had incentive to build out their networks. They should also be forced to obey all RFC's so this damned Cocast DNS hijacking stuff could end.

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Possibly not wise

The telcos may well be shooting themselves in the foot. Right now, the government is playing nice. However, if rural access continues to stagnate, it is quite likely that at some point the major ISPs will be hit with a universal service requirement. At that point, providing access to most of the rural customers won't be enough to satisfy the regulators anymore.

-d

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Paris Hilton

Monopoly behavior...

My Economics textbook said that monopolies work to maximize marginal profit, not total profit. Bringing broadband to the boonies may make more money overall, or eventually, or in conjunction with these grants, but it's going to be more work.

To be fair, at some point any company that's doing pretty well for itself (and especially if it hasn't got a lot of bigger boys to worry about coming to eat their lunch) _can_ sit back and say it's got enough. In a way, that's almost non-greedy.

It's just that if people want something akin to a utility to be provided in these circumstances, they're out of luck.

Paris, because she knows when enough is enough.

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Bronze badge
Thumb Down

The Gov't is not playing nice

This so called stimulus package is just a way to take Gov't control of compainies. Even states are turning down the money because of the provisions. Yes we should be able to do it the way we brought electricity to the rural areas. But that was a partnership. Not a power grab by Gov't.

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Hud Dunlap

You are aware that no state has turned down the money. Sure the governors said they would , but to date no state has .

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Pint

They've seen the future, and it doesn't include them

I'm not sure why any incumbent carrier/cableco would want to sink $millions into a nationwide buildout at this time.

Even if the taxpayer funds the capex the opex is hideous and coupled with the fact that no-one under 25 has a landline, that broadband experience will be available over cellular networks by the time the thing is built, and that the real profit flows to the content provider (google) not the carrier, I can see why they would want to pass.

I'm not entirely sure what their plan is for the next ten years, but I think we'll see carriers offer fantastic services in large population centers and ignore the rest of the US.

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FAIL

The big telcos are worthless

Our landline is with Verizon, the sole provider in this area. They can't be arsed to roll out broadband (but they sure love to advertise it every time they soak us for another month's line rental and sundry charges for their mildly-tarted-up 19th century service, which we might not even have if it wasn't for universal service requirements).

Free market? Competition? Like fuck, none of that applies, nor has it ever applied. Anyone who thinks the capitalist ideal is in force and "the market will provide" should be secured in a straitjacket and locked in a rubber room. The only way to get these companies to offer universal service is to force them to. I'm with VoodooTrucker, carrots clearly don't work so let's break out the Big Fucking Stick and beat them with it. They've earned it a dozen times over.

Time for a 21st century update to universal service requirements to make broadband ubiquitous and a LART to the head of the morons who think big business is any more trustworthy than big government.

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Silver badge

The reason is in the article

>I'm not entirely sure what their plan is for the next ten years

The same as the previous ten years, carry on paying huge bonuses to the executives. It seems that most of the replies have overlooked the following.

>they don't want Washington interfering with their executive-compensation decisions

Translation. We don't give a toss about providing a service to anyone so long as the executives can keep their noses in the trough.

Anything that will potentially diminish the executives renumeration will not be approved by them.

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Go

Connectus Interruptus

Those of us in the Viagra generation are used to sudden and unplanned disconnects. I advise those not there yet to get ready.

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Anonymous Coward

Hardly surprising

The deal comes with more strings than a harp. The telcos are also understandably unimpressed with a Government that is blatantly taking the Google (not evil, oh no) steer on net neutrality. If I was a telco I'd tell them to fo as well.

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Flame

Comments About Monopolies Related to Broadband is Misdirected

Anonymous posts, "Our landline is with Verizon, the sole provider in this area. They can't be arsed to roll out broadband... Free market? Competition? Like fuck, none of that applies, nor has it ever applied. Anyone who thinks the capitalist ideal is in force and "the market will provide" should be secured in a straitjacket and locked in a rubber room. "

That is most likely untrue.

Satellite high-speed internet access is just about everywhere. Most places around the U.S. have cable providers offering high-speed internet. More recently, WiMax high-speed internet is being offered all over the place! Also, 3G high-speed internet from regular cell phone providers is showing up for internet access. Also PCS high-speed internet access is also being offered.

If an anonymous poster suggests they ONLY has Verizon POTS line as an option in the U.S. - I highly suspect that the anonymous person has not looked around, at all, or has some other agenda. I bet Mr. Anonymous is crying about internet access from Verion while having cell, cable, as well as satellite service from their house!

Drop the socialist agenda, stop crying, and get high-speed internet access from another vendor!

Author quotes, "Once taken, government funds incite a 'mob mentality' that could preclude sponsoring golf tournaments or giving executives bonuses, for fear of political backlash."

This is the huge factor.

Once the socialists and fascists in the U.S. Government figured out that they could give money to provate industries, take them over, kick out CEO's, artificially limit pay, and otherwise coerse the private entities through the executive branch without rule of law.

The combination of socialism and fascism in the U.S. has been a pretty scary over the past 12 months. If I was a business, I would stay away from handouts from the U.S. Federal Government - the track record of what has happened to those who had accepting funding, most recently, has been very bad.

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Stop

The US is a big place

This is an issue with many facets.

I grew up in a rural area with no cable service (Cable is still not available there) and limited cell service. Verizon ( the land-line telco) does not offer high-speed there, only POTS. Verizon Wireless is the only cell service available in that area, and at that, it's poor signal.

So I have to disagree with both AC@14:52 and AC@03:49. It is capitalism, but there may not be other options. The problem isn't that these rural areas would generate profit, but not "enough"; but rather that the overhead for running *anything* out to the boonies vastly overshadows the revenue. When "close" neighbors are 1/2 mile apart, that's a lot of cabling. Each house is worth, what $50/month? In theory you're looking at an outlay of several million dollars for a return of a few thousand per year. By the time you've gotten your investment back, the infrastructure is 10 years obsolete.

I am also leery of the statistics quoted. The US is 60% wired for Broadband. Is that 60% of people are in an area w/ broadband (seems low) or 60% of the landmass is wired (seems high)? Remember that the US is a large area, there are several states which have more landmass than most European countries.

In short, nothing other than Federal regulation, and money, will get broadband to the boonies. The feds aren't spending their own money, so don't care about getting an ROI. A telco/cableco/ISP that runs those lines will be going bankrupt.

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Flame

Mr. Hick says:

US CEOs are the most overpaid wankers in the world.

US "broadband" is anything NOT dial-up. Yeah, that's sadville.

US companies have sat on their hind ends since the '96 telecom bill and just raked in BILLIONS instead of upgrading their service the way they should have been.

I'm another V V (no, that's not V for Vendetta....it's Verizon Victim). In spite of what Mr. Shill said in his AC post, there aren't always other options (and satellite truly sucks rocks).

If this is all about trying to gouge Google to pay for your network, you're really missing the boat. Their traffic is NOTHING compared to the video and tv going over the interweb. Give up your CEO bonus and fix your frikkin' network. Comcrap and DNS hoisting; TW not going Docsis3 because they're afraid they won't be able to screw their customers more than they already do.

There is no real competition for high speed (50-100 Mb service) in the US. This is the minimal level which should be available to anyone who wants it at a reasonable price (yeah, no cap and no "shaping"). Network service providers should be prohibited from content delivery to prevent the type of service tie-ins we see now.

Now I'm down to DIAF, STFU, ODFO....grrrrrrrrrrr

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AC @14:52

Actually even in urban areas you can be limited. I live in an area that was built up less than 5 years ago in the US. My choices for TV? AT&T or a satellite dish, the cable company is not allowed. My Choices for broadband? Any provided they are either AT&T or I pay AT&T for the land-line and wait large amounts of time while they grant access to a different DSL provider. The reason for all this is that the landlord signed exclusivity contracts when the place was built.

Cost is also a factor, I can get the cheapest possible DSL connection from a company I hate for $20/mo or $480 for 2 years OR if I was 10 miles south of my current location I would have to get the satellite link at a cost of $2,000 for 2 years (minimum time) at the same speed as the cheap AT&T line.

I'm not saying there are not options, there always are. Sometimes they are simply not suitable for purpose.

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Stop

Satellite is NOT acceptable broadband

High latency, expensive, horrible bandwith caps - no, satellite is not acceptable except as a fill-in solution for the truly "out in the middle of nowhere" customers - you know, the people so far out that they also have trouble get POTS and power. As far as what is more typically considered as "rural" customers, there are vast stretches of the U.S. where there is no cable, where cell phone coverage is spotty at best, and the telcos offer POTS only service. 10 years ago this was expected. Now it's beneath expectations. 10 years from now it will be worse than third world.

@Hud Dunlap: No, the government is playing nice. Playing hardball would be: "Every ILEC has an obligation to offer broadband internet access to their entire coverage area. This obligation will be phased in over the next 3 years. Failure to meet these obligations will result in fines for the first year. After the first year, your company will be seized and auctioned off. Oh, if you want government funding, then you can sign up to this deal we offered you earlier this year. Your choice."

-d

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Flame

Government Funding & Fascist Controls

If the government wants to really get high-speed internet options to the rural areas, they can CHOOSE TO offer the same incentives to WiMax, 3G Cell, Cable, and Telco - and let them compete for it. If there are no biters at the money, then this demonstrates other issues with government incompetence.

If the government wants to fund lower cost high-speed internet options to ares which are not economically feasible to deliver certain kinds of technology, the government has to offer the same incentive to competing technologies instead of favoring only one vendor (i.e. traditional wireline telco's) and allow the different technologies to compete.

If the government wants to fund lower cost high-speed internet options to areas which are not economically feasible to deliver certain kinds of technology, the government has to pony up the money and get out of the business of taking over the day to day operations of private sector businesses (yes, this includes firing CEO, cutting pay of individuals, and canceling bonuses!)

These are the issues in America.

Dumb elected government officials just don't understand that you can't run 100 miles of copper across barren land and get 100 mbit and the cost of digging fiber 100 miles to get a couple of DSL subscribers at $19 is a waste of money. it seems like dumb readers don't understand that, either. It is much more feasible to put up a few towers or dishes and make high-speed internet wireless through technology other than copper or fiber.

It iis stupid to blame a technology provider for not providing a technology that is clearly limited. Should Toyota be blamed for their Prius not being an effective speed boat? Sure, the boat and the car are both effective transportation vehicles, but the Prius is limited to the road and the speed boat is limited to the water. People need to get some reasonable sense!

If a handful of people want to live in the boonies, it is their option in America - they can dig wells, have septic systems, and use a slower internet. They want better services, they can choose to live near a central office or cable provider office.

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Anonymous Coward

Competition

It sometimes looks like the only competition that big companies engage in is the competition to see who can pay their CEOs the most.

(Every company wants to have an "above average" CEO, so they are all willing to pay "above average" salaries to the CEO. And for some strange reason, the "average" just keeps getting bigger and bigger and bigger. It's not as if a CEO will actually be any more effective if you pay him $70 million than if you pay him $7 million, but the people making these compensation decisions aren't spending their own money, so they don't care. Changing the tax code so that Companies can't write off executive compensation above a certain level might create some sort of brake on the process.

I pay $50/month for Verizon FiOS. When I first had in installed 4 years ago, it only cost $30/month. Sure, the speed has gone up from 5/2 to 20/5, but I don't need 20/5, and I don't have the option of a cheaper service any more. Verizon don't offer DSL in areas where they offer FiOS, so that's not an option, and getting broadband from Comcast isn't any cheaper (Duopoly in action). My mother-in-law who lives in rural New York (half a mile to the nearest neighbour) recently got 3Mb DSL for $30, or $25 when bundled with other services. If Windstream offered service in my area, I'd seriously consider switching.

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Flame

@ac - 18:36 GMT

well, i hate to burst your little la-la land bubble, but the goverment ALREADY funded broadband by giving all kinds of special tax breaks to the big wanker sucking telcos who then proceeded to hoover up ever dollar they could and drop it into their ceo's pockets and the shareholders pockets and screw over every customer they could bend over.

99% of the US could EASILY be "fibered up" if the incumbent bastards did their jobs right. They don't. They should be jailed and the companies taken over.

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Re: Google, telcos in wireless agreement shock

Maybe if the government bypassed the big telcos and offered the money to rural co-ops something would be done.

My telco, a local co-operative, is in the process of bringing Fios to their customers (http://www.3rivers.net/NewsArticles/FiberToThePremises%20.htm)

If the gov't subsidised them, Maybe I could get fios sooner than a few years down the road!

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C-N
FAIL

Gov't handouts, Lazy Monopoly Telcos

I don't need my gov to give yet more handouts to telcos in order for them to build infrastructure. But I would like the gov to revoke the (de facto) monopolies they've given out to telcos that won't build it on their own. Revoke spectrum which isn't being put to use. Use it, or give it to someone who will.

And no, satellite isn't worth a shit.

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