Government Subsidies to Verizon and Comcast in Massachusetts vs Get the Billions Back.

Verizon MA Fiber optic plans proposed, 1995

(Excerpt from Verizon MA (New England Telephone NYNEX) 1995 plan for fiber to the home to 330,000 households, as well as wiring schools, universities and hospitals.)

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I was asked a question: What did I think about the current wave of government grants that are going to the incumbent phone and cable companies, Verizon and Comcast and Charter in Massachusetts, which matches the current practice in other states?

Also, with the pausing of the BEAD government grants to bring wireline and wireless broadband or the ACP funds that ended and were for low-income families, what should the states be doing?

According to Broadband Breakfast, Jan 23, 2025 “Massachusetts Awards $12.6 Million in Broadband Grants to Comcast, Verizon.” This is on top of Telecompetitor reporting, July 2, 2024, “Massachusetts has awarded over $37 million in broadband grants to Verizon… part of a total of $45 million awarded to four broadband network operators including Charter and Comcast.”

We ask: Why are we rewarding the companies that helped to create the Digital Divide with government subsidies that just extend the companies’ monopoly controls, that does not supply basic competition to lower rates, and why doesn’t the state go after the billions of dollars charged to wireline customers already for a fiber optic future the majority will never get?

One problem is that the companies have been able to rewrite history and rewrite their role in the Digital Divide.

• The holding companies, Verizon and AT&T, each control a collection of state utilities and it is their “footprint”, but they never mention this fact.
• Verizon MA is a state telecommunications public utility and has a franchise that covers over 96% of the state.
• Moreover, these companies are NOT ISPs.
• Verizon MA is the largest telecommunications public utility in the state; Verizon, the holding company, also has the Verizon subsidiaries including Verizon Online and Verizon Wireless.
• And there is no serious competition in MA; Comcast, for example, is reselling Verizon Wireless, and Verizon has not built out the utility to be competing directly with Comcast for wireline high speed broadband/and or cable.
• Current prices are out of control and the current plans do not include competition.
• Wireless is being cross-subsidized by the use of the utility’s construction budgets, rights of way and other illegal perks, like having the wired subscribers paying extra for broadband and the broadband is going to the wireless network — as wireless services require a fibre optic wire.

Prices are Out of Control as Compared to Overseas

• Charter-spectrum triple play in NY City is now $228 for basic a month.
• Overseas, the EU Broadband Commission average was $35–45. dollars.
• Standalone broadband can be $10–20 bucks a month; the ACP gave $30 and that was only a fraction of what subscribers paid.
• Cell phone service in the US per Gig can be $3-$15 per GB on the low-end users -
• Overseas, prices can range from $10–15 bucks, with 100+GB, about $ 8–10 cents a GB has been reported.
• Moreover, the US wireless services are ‘capped’; after 20 or 50GB service slows down.

Here’s the roadmap of how the Digital Divide was created in MA — but it is a model of almost every state in America.

We’ve been filing in MA about these issues since 1999, and put up some of the filings and reports here.

• 1995; Verizon MA (formerly New England Telephone, NYNEX), is a state telecommunications public utility that was supposed to be upgraded, replacing the existing copper wire with a fiber optic wire, starting in 1995.
• State laws were changed to charge wired customers for the upgrades.
• 2004, Verizon announced FiOS, and had told MA that is was going to upgrade the state with fiber, as a cable TV and broadband service, and changed state laws and got more rate increases.
• 2010, Verizon announces it has ‘finished’ FiOS deployments
• 2012, Verizon tells investors it has no plans for upgrading rural areas and it will all be wireless.
• Verizon takes the utility construction budgets and diverts them to wireless, but the fiber optics are still part of the stat utility and Title II.
• 2016 Verizon tells MA it will finally do Boston but tells investors it will be doing a bait and switch game with 5G wireless.
• Verizon MA continues to claim the fiber optic wires are Title II and part of the state utility budget has been diverted to the build out is for wireless.

Then the Pandemic hits, and instead of investigating all of the billions of dollars collected and all of the monies that went to wireless — instead of upgrading homes…

• 2022–2025 The state and federal government betray the public by giving more money to the very companies that created the Digital Divide.

Where’s the call for getting the billions back that was already charged and collected, or halting the cross-subsidies for wireless underway in 2024, — where there has been billions that are part of a massive bait and switch by Verizon to divert the construction budget of the state utilities, including Verizon MA, to wireless. Worse, this created artificial losses making the ‘wires’ appear unprofitable.

Plot Twist:

The fiber optic wires, that go to the cell sites, and the fiber for FIoS, have been paid out of the state utility budgets because they are classified as Title II, common carrier broadband networks.

And this Title II classification is in the Fiber FiOS Boston Franchises, — but it is never mentioned that the fiber is part of the state utility.

That’s right, the Boston FiOS announcement included a franchise that claimed that the fiber optic wires were part of the existing state utility, only to find that the fix was in to do wireless;

Verizon EVO in 2016 told investors during a Boston FiOS fiber announcement that they would be doing the City of Boston, but they told investors it would be mostly wireless, especially out of town. Using these utility title II wires was never mentioned.

“Yes, we will. And so, as it relates to FiOS, we’ve announced a few of the suburb areas, for lack of a better word, for cities, sub cities that we are going to be building into. But beyond that, if you think about the use case for small cells and the coordination elements of the radio access network

And Verizon’s CEO, Lowell McAdams made it clear it was about saving money, not about the claims made to the public or state laws changed based on ‘commitments’ for fiber only to find out — it was a bait and switch, 2016.

“I mean, think about the difference for the carrier in the cost structure; half of our cost to establish high speed data whether it’s consumer or inside the four walls of the business.”

“Once you go wireless, you don’t have to run co-ax, you don’t have to do any of those high labor-intensive activities and so you light up service overnight. So then you get into how much capacity do you want and you can — the pricing models can change dramatically.”

This is the Digital Divide. Period: A wireless bait and switch that left most of MA without fiber to the home, regardless of location.

In 2017 we wrote an analysis of Verizon’s failure to properly upgrade the Verizon Massachusetts state utility. To repeat, Verizon has a franchise for almost the entire state, and was pulling a bait and switch to take the utility construction budgets and using them for wireless — NOT upgrading the areas that they claimed would be done “immediately “ starting ion 1995.

The MA State Broadband Office’s 5 year Broadband Plan Hides Verizon MA, the state telecommunications utility and how the Digital Divide was created.

In 2023, we were shocked to find that MA did not include anything about the fiber optic plans or the wireless bias and switch or anything dealing with customers have been paying for network upgrades for decades.

We filed in MA as well as created an “Analysis of the MA 5-year Broadband Plan” which does a comparison of our research and previous filings and uses an AI analysis of the state plans filed with the NTIA.

• Massachusetts Massachusetts Broadband and Accounting Scandal
• Cover Letter Complete filing
• AI- IRREGULATORS COMPARE

And, in Massachusetts, instead of investigating the bait-and switch where Verizon was supposed to be upgrading the state telecommunications public utility networks, replacing the existing copper wires with fiber — in ALL areas of the state, the state’s 5 year broadband plan systematically left out any and all references of Verizon’s previous commitments, the charging of wired customers for network upgrades — for multiple decades, or any examination of the Verizon MA financial books, which shows, like the other Verizon states, a massive financial cross-subsidy scheme that had Verizon’s other lines of business and subsidiaries get subsidized by the utility, and especially the wired customers.

To sum up:

§ Customers did not pay for a monopoly per area but rather competition. The plan was never to have 1 provider control a service area, and there is no serious ‘intermodal competition’. .

§ Anti-trust or — if Comcast is reselling Verizon Wireless, and Verizon is ‘price fixing’ the wholesale prices, especially when it is using the state utility perks and the wired customers as de facto investors, and

§ Verizon has created advantages especially for the wireless subsidiary that no other wireless or competitor can get.

§ Verizon is using Title II classification for the fiber installations that no one discusses as it contradicted the federal laws, especially on net neutrality

§ There is nothing that is going to lower prices in any of these areas

§ It appears Verizon’s has been currently pulling a bait and switch strategy and using the existing utility CapX budgets to do wireless instead of wiring the homes.

§ The copper wires were already written off and Verizon even took massive deductions to do the replacement — which were never replaced

§ Verizon stranded most of the Western, Southern and Southeastern part of MA along with Cape Cod and the Islands and all of the union could have been building the network infrastructure — over the last 3 decades.

§ Satellite is a service and not ‘infrastructure, — fiber could be doing 10–20 gigs services, bi-directional. And think of the increases in the size of the data that will require more capacity.

§ Paying by the month vs building the infrastructure that lasts for 30–50 years — and requiring and getting government subsidies is a dead end.

There’s more but the bottom line is

Halt the cross-subsidies of the wireless buildout with the wireline utility budgets and stop all of the other financial shell game caused by the manipulated accounting, where the other lines of business have been using the utility as a cash machine.

There are a host of other things that need to be done, including audits of the cable companies and the cross-subsidies of their data and VoIP services, i.e.; these have extreme profits that should never have been allowed on a franchise wired service.

Verizon is a $135 billion dollar holding company and we should not be subsidizing the utilities that were not properly upgraded over the last 3 decades, especially when customers have been the defacto investors.