Collusion of the Providers and the Negligence of FCC Equals Exorbitant Prices for All U.S. Communications Services.

America’s prices for wireless broadband service with 100 Gigs shows up on the left of this chart — almost the most expensive. We should have been on the right side of this chart — the lowest cost services. That’s a difference of 60 Euros in America vs 8 Euros a month. (1 Euro =$1.09 dollars as of July 27, 2024.)

In the US, 23 million low income households had a $30 government ACP subsidy and another 25+ million could have applied for it, and it ended in June 2024. But, the kicker was that the average household had to spend an additional $46 a month because America’s prices are out of control.

Where’s the calls for investigations if America is almost the most expensive in the world, especially against European Union (EU) prices?

This started as a short summary examining one question — What is the total number of wireline and wireless providers that offered the Affordable Connectivity Program “ACP”, broadband service that was designed to give low-income families a broadband connection? The ACP discount was $30 and it ended in June 2024.

What We Found: The answer to the question has been obscured; the FCC is covering up and manipulating the data and thus biasing basic facts.

Primary Facts: This IRREGULATORS Research Memo highlights:

• The FCC claims there are 1,600 separate entities that offered ACP services. This is pure statistical rubbish.
• America has only 3 primary wireless networks: AT&T, T-Mobile and Verizon, but they are not equal in delivery and performance.
• The top ACP providers are almost all reselling one of these 3 carriers. They are known as “MVNOs”; the FCC made no mention of this.
• AT&T, the holding company, has over 90+ listings alone of different subsidiaries and partners and each holding company is doing the same thing. Tracfone is owned by Verizon, for example.
• Worse, the largest cable companies, Comcast, Charter-Spectrum and Cox are all reselling Verizon Wireless.

Collusion of All of the Providers Created Exorbitant Prices for US Communications Services.

• Overseas prices for identical services are a fraction of US prices.

An analysis by Rewheel Research for the first quarter 2024 details that 3 carriers are not effective competition and markets that only have 3 carriers vs 4 or more have much more expensive services.

The opening chart is from: Rewheel Research Report, The state of mobile and broadband pricing — 1H2024 April 2024

“Monthly prices are 2–3x higher and gigabyte prices are 5–6x higher in markets with only 3 mobile network operators. The effective competition in markets with 4 mobile network operators not only leads to much lower mobile prices, but as well to substantially lower fixed broadband prices. In markets with only 3 mobile network operators, consumers not only pay 3x more for mobile plans with 100 gigabytes they also pay 60% more every month to buy fixed broadband plans with Gigabit speeds.”

But the detail shows that overseas wireless broadband service can come with 100GB for 8 EUROS, (1 EURO=$1.09 as of July 27th, 2024).

This revelation then, is that the Digital Divide was caused because prices were not affordable or that areas of the US were not properly upgraded — and this research proves that the FCC has been captured by the industry and failed to do basic analyses.

Moreover, America’s ACP program has been based on super-retail prices, with a host of made-up junk fees and expenses and because there is no serious competition; only 3 primary wireless carriers in the end, and with the help of the cable companies, who are not competing but reselling Verizon Wireless, America has been gouged.

Had America actually had ‘fair and reasonable rates’ and comparable to overseas prices, America would not need to have the government fund for what should be a ‘free market’ for communications, not monopolies and duopolies.

How is it possible that they are now receiving almost ALL government subsidies?

— I.e.; Why is America funding overly-stuffed- wealthy telecom and cable companies to keep prices inflated and supply sub-standard broadband, especially to low income and rural areas?

Again. America did not need to create ACP funding. America needed to realize the high speed broadband failure was caused long before the Pandemic and should have NOT rewarded those that created the Divide; it should have started investigations into the failure to properly upgrade America’s critical infrastructure by AT&T and Verizon.

Out of Control Prices and Atrocious FCC Data

The FCC released the basic “ACP Transparency Data Collection Plan Overview”, and it supplies a collection of data that is not transparent; it is designed to sound reasonable but in the end makes it impossible to know the answers to basic questions.

• The FCC’s FACT SHEET: “Effective June 1, 2024, households will no longer receive an ACP discount.”

NOTE: In order to tell the story and present the data, we’ve divided this discussion into 3 sections

Part 1: Super-Retail Rates for Low Income Families:

The Affordable Connectivity Program, “ACP” vs Hold them Accountable and Lower Rates Immediately. In PART 1 we examined the FCC’s presented data on the ACP program. We uncovered that the ACP discount only covered 25% of customers, and that included the help of other low-income government subsidies. In reality, on average, customers paid over $46 extra a month, and the costs were all based on ‘super-retail’ pricing. Moreover, the FCC never gives the Total Bills with all charges included taxes applied, nor did it block companies from charging a host of junk fees, like ‘cost recovery’.

Overseas Prices are a Fraction of US Prices: We also examined overseas prices using Rewheel Research Reports, as well as the European Union Broadband Commission reports, and actual residential communications bills. Overseas prices are a fraction of what we pay in America for identical services. As we highlight, a ‘triple play’ cable TV, voice and internet averages $35–45 dollars; in the US, the average was over $220 a month. Overseas, research shows wireless plans with hundreds of Gigs can cost $10= $20 a month and the average cost per GB is $.03 cents; in the US, the average cost per gig can be $2.25-$20.00 per GB — and overseas there are no made-up fees or multiple taxes.

Conclusion: With the demise of the ACP program, where are the calls to investigate the multitude of practices in the US to overcharge customers, especially low-income families, and especially seniors, who are more low volume users and thus pay exorbitant prices?

COMING: Part 3: How Many ACP Providers are there Really, 1,600 or 3–5?

The FCC claims that this presentation is ‘transparent’, but instead the data covers over basic problems or leaves out critical material facts.

Example: How many ACP providers are there really? The FCC reported that approximately 1,600 internet service providers participated in the Affordable Connectivity Program (ACP) to offer discounted internet service to eligible households.

This research memo details that the Top ACP providers are almost all resellers of Verizon, AT&T and T-Mobile — a fundamental fact that the FCC never mentions.

Worse, for any of the ‘holding companies’, such as Verizon or AT&T, there are multiple subsidiaries and partners: AT&T has over 90 different listings in the ACP provider list and the FCC failed to even mention these primary and critical facts.

Part 4: The Underbelly of Deceptive Acts: The wireless networks were illegally funded by the state telecommunications public utilities and charged to customers.

Exposing that there are only 3 underlying wireless networks is only part of the story. As we previously documented, Verizon and AT&T were able to use their state telecommunications public utility budgets to build our their wireless networks as well as charge wired phone customers for this. In every Verizon and AT&T state, the companies had obligations to build out their wireline networks for fiber to the home as part of the state utility infrastructure — Instead, the companies diverted these billions per state to build out their wireless networks.

But that is not the end to the harms. In every state, laws were changed to charge customers for fiber optic network upgrades of the state telecommunications public utilities, and this happened multiple times. Customers were overcharged thousands of dollars per household — for services most never received, but also illegally funding these wireless networks.

Thus, the creation of the Digital Divide was created because AT&T and Verizon failed to properly upgrade their state telecom utilities to replace the aging copper wires with fiber and diverted the utility budgets to build out wireless, thus not providing direct wired competition or the delivery of fiber to the rural areas. And on top of that, were able to have local wired phone customers pay for the wireless upgrades.

When AT&T offered its EBB funding discounts it was always in the “AT&T footprint”

AT&T Puts Its ’21 State Footprint’ in Its Mouth.

This showed up in the low-income EBB, program, including wireless.

And this map gives the Verizon, AT&T and CenturyLink (now Lumen) holding companies, their original and current “Footprints” and how the Digital Divide holes are located in their territories/states.

Through mergers,

• AT&T controls 21 state telecommunications public utilities, covering the majority of the population.
• Verizon controls the East Coast from originally Maine to Virginia, (with a carve out of CT, owned at one point by AT&T)

The final word. AT&T and Verizon were able to build their wireless networks using the state telecommunications public utilities — the wired networks — and worse, charged customers — including all government agencies, as well as low-income families

The FCC has never acknowledged any part of the last 30 years of failed fiber optic deployments or the wireless bait and switch that has occurred.

It never noticed that the wireline networks were never properly upgraded, especially in rural areas, and that this money was instead diverted to build out their wireless networks.

Conclusion: Competition vs Collusion

If the largest cable companies are in bed with the largest wireless companies, who are owned by the largest wireline companies, have decided to let the cable companies control the wired services while the wireline-phone companies, then, who did not upgrade their networks to compete for wireline fast broadband — diverted the wireline budgets to wireless.

And if the wholesale prices are controlled by these 3 companies, and 2 of them control their own territories and they were able to create a second ‘hidden’ wireless network using the state utility’s right of way, construction budgets and even change laws to make sure that the wired customers would be illegally charged for these cross-subsidy build outs of wireless….

And on top of this, and at the same time, the prices to low income families are being charged super-etail prices and the ACP doesn’t even cover the majority of the expenses…

Where’s the call for the FCC and DOJ start to discuss collusion of the major players to keep prices extremely high, and limit the number or actual competitors through this coziness that is then hidden because the FCC failed to provide a ‘transparent’ and accurate assessment.

To all those calling for a continuation of the ACP program — We have always believed and fought to bring low cost, high-speed, fiber optic based broadband to All residences and businesses — especially since we have been ‘defacto investors’ for the last 30+ years.

We do not need new government subsidies using super-retail prices with virtually no serious competition to lower rates. We need healthy market forces that are working. What we have are corporate captured regulators who’s data is either being manipulated on purpose to keep the companies in control or they are seriously incompetent and clueless of how we ended up adding abetting the creation and continued harms now called the Digital Divide.

ACP should never have been discontinued until there was a solution for serving these low income families. Having said that, the solution is to halt the massive overcharging and financial cross subsidies, and bring in competition, and halt what now appears to be a cartel that has formed ove the last 2 decades.

We can’t fix the Digital Divide through more rhetoric and biased data.