from the jesus-supports-mindless-deregulation dept
The FCC runs an $8 billion federal subsidy program to help bring phone and broadband services to lower income homes and schools called the Universal Service Fund. Started by Reagan and expanded by Bush Jr., the program was historically a bipartisan thing, until the extremist Trump administration came to town.
Driven by a fake right wing consumer group called “Consumers’ Research,” the Trumplican-stacked Fifth Circuit recently took the radical step of ruling the entire program unconstitutional. The ruling, which ignored past Fifth Circuit and Supreme Court precedent (and all common sense), effectively declared the USF an unconstitutional, illegal tax, something seven court dissenters said was a preposterous leap.
The Supreme Court has stated they’re taking a look at the case, but it sounds like it’s not going great for the weird zealots trying to kill the USF:
“Although the court has a 6-3 conservative majority that has undercut the authority of government agencies in a series of recent decisions, justices expressed reservations about the legal argument made by challengers.
Overall, a broad majority seemed to have reservations, not least because a ruling against the agency would cause significant upheaval to the provision of a key service.”
Again, it’s important to reiterate that nobody actually supports killing the USF, including the big telecom companies traditionally allied with the GOP. The filer of the lawsuit, Consumers’ Research, isn’t a real consumer group. It’s a weird bit of right wing performance art that maintains a section of their website that tut-scolds companies for “being too woke” (read: not racist or sexist enough).
For whatever reason most news articles on this story about the legal assault on the USF don’t mention the dodgy nature of the plaintiff, and present their legal argument as if it’s serious adult policy. It’s clown shit.
This is part of a broader effort by authoritarians to dismantle the entirety of the regulatory state, including labor rights, consumer protections, corporate oversight, the rule of law, and public safety protections. It’s an extension of the age old (and false) right wing and Libertarian delusion that if you eliminate all government oversight of corporate power, magic, daisies, and miracles spring forth from the sidewalk.
In telecom, that ideology resulted in shitty, expensive, patchy service and widespread market failure at the hands of shitty regional telecom monopolies. Programs like the USF are bare bones efforts to indirectly address this problem through subsidies. Apparently even the Supreme Court has reservations about jerking the carpet out from under the feet of rural schools and low income Americans the program helps.
That said, I do think this entire lawsuit and resulting stage play could be a game of misdirection by Republicans and their telecom allies to erect a new tax on big tech companies.
The USF, paid into largely via fees on traditional phone lines, is certainly dying due to a shrinking contribution base. There have been a lot of conversations on how best to address this. One “solution,” proposed by Brendan Carr and his BFFs at AT&T, is to have Netflix, Google, and Facebook users pay telecom giants billions of dollars to (purportedly) expand broadband access.
Basically a significant new “big tech tax” on you, the consumer.
The problem is Republicans are extra terrible at overseeing telecom subsidies (see: the FCC’s RDOF). And incumbent U.S. telecom giants have a long, long history of taking billions in taxpayer subsidies and then failing to actually fully deploy the resulting fiber networks taxpayers paid for. And Republicans have repeatedly demonstrated they don’t actually care about whether poor Americans can afford broadband.
So I suspect what’s going to happen here is something like this: the Supreme Court rejects the Consumers’ Research bid to dismantle the USF, but makes a big show of urging Brendan Carr to “fix” the program to “clear up legal ambiguities.” Carr will then “fix” the program by imposing a new tax on large tech companies, who’ll then pass the costs on to their users (you).
All under the pretense that this is going to finally and boldly “bridge the digital divide.”
But what they really want to do is create an even bigger, poorly managed slush fund that offloads tech industry wealth to their monopoly friends in telecom (and almost certainly Elon Musk’s Starlink). And despite billions in additional subsidies, the public won’t see meaningful new fiber expansion because the Republicans won’t be particularly interested in whether AT&T or Musk follow through on their word. The GOP will also undermine broadband mapping improvements to ensure nobody can check their math.
If policymakers really wanted to address substandard and expensive U.S. broadband, they’d take direct aim at regional monopoly power, pushing policies that boost local competition (like community broadband, regional cooperatives, or open access fiber). Instead, we like to heavily subsidize the telecom monopolies responsible for the problem in the first place, then proclaim mission accomplished.
So either way the Supreme Court rules, this won’t be a good faith effort; it will be a gambit designed to disguise their repurposing of a struggling broadband subsidy program into a bigger slush fund — while pretending it’s a noble solution to the digital divide. Bookmark this post and we’ll return to this conversation later on this summer to see how my prediction fares.
Filed Under: broadband, fcc, fifth circuit, high speed internet, low income, subsidies, supreme court, taxpayers, telecom, usf
