In a rather ironic twist, the company who needs these “new broadband incentives” the least is crowing about the need for them. Forgive me if I don’t take anything from the Verizon executive vice president for public affairs, policy and communications (read: professional shill and media mouthpiece) very seriously, but there are several problems with Verizon’s attempt to “call for” resources to expand broadband and internet access into rural areas. Let’s start at the beginning.

Verizon claims that the federal government needs to provide some kind of grant package or set of incentives to accelerate the deployment of broadband access and availability to rural areas with few people. Some kind of fund…that provides universal services…to people who may not already have telephone or telecommunications services currently because of the remote locations in which they live…something like the Universal Service Fund, perhaps? That thing that Verizon’s asking for…that already exists?

Verizon’s problem with the USF isn’t what it does or why it does it (which we’ll get to later, because Verizon is trying to say that the way the USF works is badly designed, when in reality “badly designed” translates to “doesn’t give us enough money or the opportunity to dominate a market sector”) but the fact that the USF is distributed to many different organizations of all sizes, and doesn’t show particular preference to large telecommunications companies even though they collect a large number of the public fees that go into federal coffers. It’s not like that money is being wasted though – the USF is administered by the Universal Service Administrative Company, which distributes it, in large part, to schools, libraries, and small businesses working to bring internet access and telecommunications services to rural and poor areas. Verizon’s problem with all of this? They have to compete for the money, they have to compete for the areas in which the public investment is made, and they aren’t given the opportunity to completely dominate the revenue stream from the government. So what do they do? “Propose” a new funding stream that they can tap directly into without having to compete with those pesky small business and do-it-ourselves municipalities.

Verizon, like Comcast and the other major telecomms, are absolutely afraid of free market competition – they claim to thrive on it, but as soon as they’re presented with a market that may or may not present a guaranteed return on investment, they balk at making the investment, but similarly stand in the way of smaller market elements that step in to fill their void.

Examples: Verizon is happily installing FIOS to homes and individual housing communities in many parts of the country, mostly relatively dense suburban communities near larger cities, like the suburbs of Washington DC, Seattle, and San Francisco, while simultaneously claiming that they don’t have the money or the technology to extend traditional telephone and DSL services into rural areas. While Verizon installs FIOS in single family homes, across the street they refuse to provide the same level of service to customers in apartment complexes, town homes, or rental communities because they have no strong guarantee that those people will in turn become their customers because of the added feature. Homeowners will up the value of their homes thanks to the presence of FIOS, but apartment dwellers or town home renters aren’t particularly interested in the inherent value. They may in turn sign up because of the better service, but they’re nowhere near as dependable as the homeowner across the street. It wouldn’t cost Verizon significantly more to extend their service, but because they can’t be sure the bills will roll in, they’ll stop where they know they’ll make money, and then whine to the government to get the public to foot the bill for the rest. Will Verizon reimburse the government for that bill? Never – once the service is there for the taking, they’ll market the hell out of their potential customers, take the monthly income from billing, and run.

We’re looking at the same setup here. Verizon can’t be sure they’ll get decent income from expanding telecommunications services into rural areas and low-cost regions, so they beg the government to foot the bill for their work so they can continue making more money, while the public is supposedly supposed to just be happy that the access is there, after sinking public money into infrastructure that’ll be corporate-owned and operated. The public pays twice – once to the government to hand the money to the telecomm to install the service, and again when they sign up for the new digs.

Another problem with this strategy is that the major telecomms will actively stand in the way of do-it-yourself municipalities who will fill in the gaps that companies like Verizon claim they “don’t know exist.” When Philadelphia made an effort to bridge the digital divide with city-wide free wi-fi, Comcast and Verizon cried foul and even took the city to court over it, claiming that the government shouldn’t be doing their job. The trouble is, though, that the job isn’t getting done. In response, business-friendly officials told the city that they could have their municipal wi-fi, they just had to work with the telecomms to get it done: essentially the public pays for non-public infrastructure, and the public pays again for the bill to use it but has no stake in its management or operation.

So if we can’t do it ourselves without the telecomms complaining, and the telecomms refuse to compete with other businesses to make it happen, what do we do? No one is forcing the telecomms to take the risks involved with building out infrastructure to rural and remote regions – businesses have to measure their risks against potential rewards and return on investment. If Verizon doesn’t think the return on the investment is worthwhile, that’s fine, but if that’s the case, don’t stand in the way of small businesses filling the gap, or municipalities and governments who offer to do it themselves.

The other travesty here is that Verizon is trying to take to task the USF for the way it dishes out money to multiple vendors and suppliers in different locales. They claim it’s a “reverse auctioning” process, which gives money to several companies where it should be rewarding one company for getting the job done. This is my favorite distortion of free market economics ever – the notion that by encouraging companies to compete, you somehow dilute the service provided to the customer, and it would be better to just give the money to a juggernaut. Verizon claims in the article to not take USF money (a statement that I would highly dispute, or out and out classify as a lie) but simultaneously goes on about how it’s “free money” so “why not take it?” Why not, Verizon, why not?

It’s so entertaining (and simultaneously appalling) when telecomm giants like Verizon ignore or insult public programs designed to do exactly what they want (but in turn demand that the public get what they pay for and insist on accountability in how public money is spent) and instead “propose” public programs that essentially turn into handouts with which they can do whatever they please. When the public complains and demands oversight and accountability for the public funds being spent, the company cries foul, throws out the evil “regulation” language, and demands that they not be strangled by such silly things as accountability for spent tax dollars. Alternatively, companies like Verizon can’t have the public, competing businesses, or small businesses sucking up untapped markets, so they stand in the way there as well. They spend more money complaining, lobbying government, and dragging competitors through court than they could make if the reinvested some of their massive profits towards the projects they claim to be so vested in. If they can’t be the solution, they want to be part of the problem.

[ PC World: Verizon Calls for New Broadband Incentives ]

As a side note, I also fault PC World, or the IDG Wire Service, from which the text of this story comes, for essentially taking what looks like a press release or a conference call with this Verizon mouthpiece, who they describe as a “top Verizon executive” before they reference his title, literally word for word and publishing it as news without fact checking (re: Verizon not taking USF funds) or even researching the organizations and programs that are discussed. This kind of journalism provides no balance or information, and instead amounts to a platform for company officials to define the “truth” and frame public discussions as they see fit.