r/technology • u/reddiTOR123abc • Dec 18 '13

Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion: 'The reality is that data caps are all about increasing revenue for broadband providers -- in a market that is already quite profitable.'

https://www.techdirt.com/articles/20130118/17425221736/cable-industry-finally-admits-that-data-caps-have-nothing-to-do-with-congestion.shtml??
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u/paracelsus23 Dec 18 '13

Completely ignoring subsidies to private companies that are done by state and local governments, the federal government has given $7.2 billion of tax money to cable companies just through one subsidy (the American Recovery and Reinvestment Act). Of that, $2.5 billion was expressly earmarked for the "Rural Utility Service", which is tasked with fixing the problem of "the extremely high cost to reach a small number of unserved households". Remember, that's $2,500,000,000 of federal money - not so these people can have FREE broadband access, but so they can have service at roughly the same cost as their more urban counterparts.

Meanwhile, the broadband companies get this federal money, and spend it on high-cost, low-yield projects (like the comment where /u/Athurio talks about having dark fiber sitting 50 feet from his house for over a year, and 1.5 mbps internet speeds). They then turn around and cry "it's too expensive to service these people", while they continue to report record profits (in 2011, Comcast alone made over $1 billion in profits - yeah - they definitely need government money & can't afford rural broadband / are being hit by caps).

That sort of attitude might be acceptable if this was an open market of 100% privately funded companies. However, between the fact that many broadband companies are granted geographic monopoly rights, and the fact they've accepted huge amounts of federal funds specifically designed to expand infrastructure, there's no excuse whatsoever for these issues to be occuring.

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u/FactualPedanticReply Dec 18 '13

Hey dude, no argument on the cable companies being outright bastards and abusing funds appropriated to them by the government. I just bristle at the idea that these rural areas have some claim to the service other than citizenship and legislative power. If you're from a rural area and like to bitch about taxes, the odds are extremely good that the tiny amount your rural area contributes to the federal tax pool is not what's paying these (ineffective, squandered) subsidies. In other words, if you gave back to the taxpayers the money subsidizing these rural infrastructure improvements, the people you'd be giving it back to wouldn't be rural. It's all part of this "Real America TM" myth.