Affiliate links on Android Authority may earn us a commission.Learn more.
Do broadband providers really deserve their billions from taxpayers?
June 15, 2025
One of the most common themes stated by those against net neutrality and Title II classification is the need to get the government out of the Internet. As one corporate-funded groupnotedin their petition to stop the Federal Communications Commission (FCC) from issuing rules on net neutrality: “The American people won’t stand for a federal takeover of the Internet. The best way to keep it open and free is what has kept it open and free all along—no government intervention.”
In terms of that government view, many share it and I generally agree with it. I prefer to see the government stay out of meddling in the tech sector. But, why are these same people/groups ignoring the massive involvement that the carriers have with the government on a daily basis?
Let’s start way back in the early 1990’s. In order to receive billions from state and local governments, Bell Atlantic (now Verizon) promised the world without any rules being given to them about how to use such taxpayer money.
What was promised?
I feel quite comfortable summarizing that we didn’t see results anywhere close to those goals. But maybe over time broadband providers have gotten better at their promises of using taxpayer money in exchange for improved broadband.
In 2012, West Virginia taxpayers gave Frontier Communications over $125 million in broadband stimulus funds. How did that money get spent?
In Pennsylvania, taxpayers have given Verizonnearly $2.1 billion for servicesthat never came to fruition. In 1994, Verizon (then Bell Atlantic) agreed to have 20% of the state broadband wired by 1998, and 50% by 2004. Note that we are talking about 45MB/s symmetrical fiber service right to the door.
So, how did Verizon do? Not well. In fact, by 2002, the state of Pennsylvania acknowledged that Verizon (again, then Bell Atlantic) would not come close to reaching the agreement and asked Verizon to update their plans as to how they would accomplish the agreement going forward.
In New Jersey, taxpayers gave Verizon almost $13 billion in surcharges in return for having the entire state by 2010, a plan called “Opportunity New Jersey.” Again, Verizon didn’t even come remotely close to finishing off the agreement. When asked why Verizon never even wired many cities in the state, Verizon claimed that their more expensive, data-capped wireless service wasmore than enoughto fulfill the 45 Mbps broadband agreement.
When some state government politicians in New Jersey called out Verizon, Verizon defended themselves by sendingbogus public support lettersto the state Board of Public Utilities, in the hopes that the state would let Verizon off the hook with the agreement. Verizon was let off the hook.
On the whole, this country seems to have a rich history of simply handing out freebies to the broadband providers. Pulitzer Prize-winning reporter David Cay Johnstonwrote a book in 2012, which detailed how for years taxpayers have handed hundreds of billions to cable and phone companiesfor networks that were never delivered.
To quote one of my favorite tech writers:
Back in 2009, the wireless industry’s primary trade and lobbying group, the CTIA,proposed thatthe FCC use taxpayer dollars to acquire additional spectrum for the wireless industry. According to the CTIA, taxpayers would spend between $1.37 billion and $1.83 billion to free up specific spectrum for mobile broadband service.
But getting back to the federal government, Verizon made $19.3 billion in U.S. pretax profits from 2008-2012. Therefore, it makes sense that Verizon would have to pay a sizeable amount in taxes. Oh, wait.
AT&Talso gotquite the help from the terrible federal government by having received over $77 billion in tax breaks from 2008-2012.
Cable and broadband providers have no interest in keeping the government out of their industry. They want the government as involved as ever when it benefits them, which is apparently often.
Thank you for being part of our community. Read ourComment Policybefore posting.
