High prices, low speeds and fraud plague U.S. aid to keep people online

At the height of the coronavirus pandemic, Congress chartered a first-of-its-kind federal effort to help struggling Americans who could not afford to lose access to the internet. The aid proved to be a godsend for millions of low-income families, but it also sent the nation’s telecommunications giants scrambling for the new federal money—unleashing price hikes, service cuts, and fraud risks that hurt customers and taxpayers alike. The story of the government’s roughly $17 billion efforts to close the country’s persistent digital divide is one of great promise and costly peril. Under the program, Washington offered to pay stipends directly to internet providers that lowered Americans monthly broadband bills—potentially to zero. But this simple premise at times brought complicated, undesirable results. AT&T, Charter Communications and Verizon forced customers to accept price increases or slower connection speeds if they wanted to apply federally funded discounts to their bills. The companies’ practices — on top of the government’s flawed application system—also left the program at risk of fraud. To date, more than 14 million households have enrolled in the federal broadband benefit system. But the figure represents about a quarter of the estimated 49 million American households that are eligible for help. Experts attribute at least some of the gap to the multibillion-dollar industry that administers the aid.