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Last week Elon Musk successfully conned America and U.S. regulators into signing off on his preposterous SpaceX IPO, which immediately generated Musk $75 billion by comically over-stating the value of SpaceX, xAI, and Starlink. Then bone-grafting the entire pile of bullshit to the U.S. economy and your retirement account under the pretense that space data centers and Mars colonization are just around the corner.
A handful of remaining useful journalists have repeatedly explained how xAI and Musk’s racist 5th place chatbot — which comprises the lion’s share of the ridiculous IPO valuation — is a gargantuan loser. Both SpaceX and xAI aren’t profitable and may never be, and the claims of Mars colonization and space data centers are unworkable bullshit designed to distract people with toddler-level critical thinking skills.
Anyway I’m sure it will go fine.
As a multi-decade telecom beat reporter I’d say I’m better positioned to talk about Starlink — the only actually profitable company in the SpaceX IPO prospectus (and that’s assuming Starlink is being honest about their financial numbers in a country too corrupt to have working financial regulators).
I’ve long noted how Starlink is great for people with no other options, but data has shown how it’s too congested to meaningfully scale. It’s also often too expensive for the sorts of Americans struggling with access. There’s also the problem with it ruining astronomical research and degrading the ozone layer. So Starlink is great for RVs or a guy with an extra cabin in the woods, but it’s not a miracle.
In terms of broadband policy, it’s supposed to be a niche solution. The kind of technology you use to fill in the gaps after you’ve pushed fiber, 5G, and fixed wireless out as far as you can into unserved areas.
But as I’ve mentioned previously, folks in the Trump administration and extended Rogan infotainment universe see Starlink as akin to magic. They think it’s just a sort of pixie dust you sprinkle over the entire of U.S. connectivity woes. There was a soggy Bulwark interview last week with Jason Calacanis that kind of reveals how deep the delusion goes in terms of what Starlink actually is:
The SpaceX IPO insists — and Calacanis dutifully believes — that it’s trivial for Starlink to jump from a niche satellite broadband solution with a little over 10 million subscribers to a massive economic powerhouse with 300-500 million subscribers. Calacanis waxes poetic about Starlink providing bandwidth to every phone in the world and surpassing even Netflix in terms of total subscribers.
But in a way that’s highly representative of modern Silicon Valley, Calacanis doesn’t actually care about how the tech works, or even if it works. Calacanis is interested in unchecked wealth accumulation, and propping up the unbridled profit-seeking of a personal friend.
The thing is: to meaningfully grow, Starlink will need to start seriously competing on price to counter competitors (like Amazon) coming into the space. But the cost of endlessly replacing LEO (low Earth orbit satellites) is immense (SpaceX says each satellite has a five year lifespan, but it’s arguably much lower). And ARPU is already dropping for Starlink as the company tries to drum up new subscribers.
Calacanis insists Starlink’s just a hop, skip, and a jump from being even bigger than Netflix. But for Starlink to even sniff those kinds of numbers, it would have to intensely compete with deeply-entrenched and politically-powerful telecom monopolies, and fiber optic broadband and 5G/6G networks less constrained by the rules of physics. They’ve also got to compete with a rising tide of community-owned fiber.
As Starlink grows its subscriber base, it’s not only going to see its ARPU drop faster, but data shows it’s going to run into new capacity constraints. That means more annoying network management practices that throttle video, limit services, and generally degrade performance. We’re already starting to see the impact of this with network slowdowns and “congestion fees” ranging upwards of $750 in some areas.
And this is, so we’re clear, a company that’s never seen fit to meaningfully invest in customer service, so as these problems grow, it’s unlikely they’ll be able to handle customer annoyance well.
Anybody claiming that Starlink is the ticket to vast riches is either lying to you or doesn’t understand how the technology actually works. Even if it can maintain its success as a viable niche connectivity option useful in rural markets and global battlezones, the high cost of maintenance means this is never going to be a major money maker. Though they clearly hope it will prove to be a semi-useful backbone for a major pump and dump scheme.
The ace Elon Musk is holding is corruption and cronyism leading to regulatory favors and massive new subsidies, but it’s not clear even that’s going to be enough.
Cecilia Kang at the New York Times has an interesting article about how the Trump FCC has been doing cartwheels trying to prop up the Musk IPO — especially as it pertains to Starlink. That has included not just abandoning any meaningful regulatory oversight of “space junk” and orbital safety, but launching dodgy investigations into companies that hold spectrum Musk wants for himself.
Elon Musk bought himself a Presidency, and it continues to pay off handsomely:
“Carr has taken multiple actions for which Musk was the prime beneficiary,” said Blair Levin, an adviser to New Street Research, an investment research firm, and a former chief of staff at the F.C.C. He added that Starlink “has gotten a huge amount from the Trump administration and Carr.”
Carr has tried to justify his favoritism of Musk by saying he’s also rubber stamped the LEO satellite policy interests of Jeff Bezos and Amazon. But as we’ve consistently established around here, nothing Carr does is driven by any sort of good faith concern about the public interest.
The funny part is that the New York Times doesn’t even mention that the Trump administration has also hijacked the 2021 infrastructure bill to redirect potentially billions of dollars to Elon Musk and Jeff Bezos (I should have an upcoming feature on this over at The Verge). This is money being directed away from affordable fiber and toward two billionaires — for networks they already planned to build.
More specifically, the Trump NTIA under former Ted Cruz staffer Arielle Roth changed the language of the $42.5 billion Broadband, Equity, Access, and Deployment (BEAD) program so that Musk and Bezos would be the prime beneficiaries. They also stripped out any language requiring that internet access built with taxpayer money had to be affordable or equitably deployed with an eye on fairness.
Musk and Calacanis types try to brush functional oversight for taxpayer spending as unnecessary “wokeness.” But the ongoing BEAD saga involves an historic hijacking of Congressionally-mandated funds by bad faith actors; so it’s curious the New York Times didn’t think it was worth mentioning in a story about how unethically cozy the Trump administration and Musk are.
Like most of the SpaceX IPO this will all be proven out over time. Long after people have had their retirements account raided, or small towns have had their infrastructure hopes hijacked. Consumers, taxpayers, and labor will, as is usually the case, be left holding the bag. And the folks that made it possible will already be off to the next big thing leaving people of conscience to clean up the mess.
Filed Under: competition, corruption, cronyism, elon musk, fcc, leo satellites, spacex ipo, taxpayers, telecom
Companies: spacex, starlink, twitter, x, xai
I’ve noted repeatedly how the Trump administration is going out of its way to not only destroy all oversight of the country’s shitty and predatory telecom monopolies, but to eliminate any and all systems that try to ensure that U.S. broadband access is actually affordable. This stuff often runs in parallel to the administration’s brutal attacks on free speech.
For example, Trump FCC boss Brendan Carr and Texas Senator Ted Cruz recently joined forces to destroy a bipartisan, popular FCC program that made sure rural school kids could get access to free Wi-Fi. They made up a bunch of bullshit reasons for the attack (falsely claiming these programs were “censoring Conservative viewpoints and content”), but the real reason is big telecoms like AT&T don’t like the government giving people free broadband they might otherwise have to pay for.
Trump cronyism, corruption, censorship, and ideological extremism just keep intermingling in new and creative ways.
Last week Carr announced he’s now taking aim at the broader FCC E-Rate program with an eye on “reforms.” E-Rate is another historically bipartisan and uncontroversial program that helps bring affordable broadband to rural libraries, schools, and communities. Carr’s announcement proclaims he’s “taking a look” at the program because he’s worried about kids having too much “screen time”:
“Over the last several years—and especially during COVID—many schools dramatically increased screen time for kids, with many students now swiping for hours every day. Research has now been pouring in that America’s experiment with heightened screen time in schools may be related to the negative educational outcomes we are now seeing in classrooms across the country—from declining academic performance to diminished reading comprehension skills.”
Obviously, having the guy who illegally censors comedians and journalists at the behest of Donald Trump determining what kids should or shouldn’t be seeing is problematic, though it probably won’t get as much press attention as it should. It’s worth noting that lot of the “harm” science Carr is referencing — and even the term “screen time” — is based on a lot of misleading bullshit.
Other Republicans, like Ted Cruz and Marsha Blackburn, have also been focusing a lot on sudden concerns about “screen time,” but they’re using the term as a trojan horse to mask other goals — like forcing tech companies or schools to coddle far right wing ideologies. Unfortunately, the corporate U.S. press is too broken to inform people that nothing these folks do is in good faith.
They’re all so pickled in their own propaganda, most Trumpies genuinely believe that existing systems are currently filling kids’ heads with trans rights activism and “wokeness.” But they’re not interested in educational programming or internet access filters that necessarily work and are broadly fair, they’re interested in systems that give right wing ideology an advantage.
The E-Rate program spends about $3 billion a year driving affordable broadband into parts of the country left high-and-dry by the regional telecom monopolies Carr refuses to regulate. While there is sometimes fraud in programs like this, the vast majority of the time it’s caused by private companies Carr, again, refuses to competently regulate and is afraid to stand up to.
So if you were to seriously reform these programs, you’d start doing audits of major companies like AT&T, who have a long history of defrauding these and other initiatives. Instead, Carr’s trying to shift the focus to the idea that taxpayers are funding internet access that’s delivering “harmful content” to kids, which, if you’ve tracked Brendan Carr’s censorial extremism, should be a huge red flag for anybody:
I suspect there’s several motivations here. One being big telecoms like AT&T that want E-rate revamped in a way that financially benefits them. The other being Carr and the right wing extremist mission to extend their censorship and ideological dominance into every aspect of American life, starting with the classroom, where they’re compelled to root out any and all criticism of right wing ideology.
This is how he framed his new plan for E-Rate reforms on a recent appearance on Fox News:
“There are school districts that have read our law as only requiring them to put Internet safety procedures in place on the devices that the school owns. If you bring your own device to a network supported by this program, you don’t necessarily have any filters on where you can go. Kids are ultimately finding pornography, and that’s a problem.”
To be clear schools already employ filtering systems. Some work, some don’t. The nature of these systems is such that they not only tend to over-filter content, but they’re generally easy to bypass.
Still, it’s not the FCC’s job to determine what content is acceptable, or even to manage kid “screen time” on personally-owned devices. That’s not only an unworkable game of whack-a-mole that would waste a lot of taxpayer money, that’s the precise sort of weird overreach Carr (and Republicans, and “free market” Libertarians) have whined about for as long as I’ve been alive.
When Carr demolished the program that brought free Wi-Fi to school kids, he and Cruz simply made up a whole bunch of bullshit about how the free Wi-Fi systems (and firewall systems) being implemented were “censoring Conservative viewpoints.” Feeling emboldened from that weird performance, it’s clear he’s looking to expand his “reform” more broadly to other FCC programs.
If it’s not clear yet, nothing Carr does is in good faith, his government “efficiency reforms” always mask harmful, unpopular ideological extremism or cronyism (sometimes both), and like Trump often does, he’ll exploit our shitty press to drive a news cycle about “screen time” that will downplay or ignore all of Carr’s actual goals.
Filed Under: brendan carr, broadband, censorship, education, erate, fcc, schools, subsidies, taxpayers, telecom
A quick refresher: there was originally $42.5 billion in broadband grants headed to the states thanks to the 2021 infrastructure bill most Republicans voted against (yet routinely try to take credit for among their constituents).
But after taking office this second time, the Trump administration rewrote the grant program’s guidance to eliminate provisions ensuring the resulting broadband is affordable to poor people, and to ensure that Elon Musk and Jeff Bezos gets billions in new broadband subsidies for their fledgling satellite broadband networks.
Money given to Bezos and Musk is money not spent on better, faster, local fiber optics (especially popular community owned networks). A serious broadband policy would ensure that open access fiber is the priority, followed by wireless, with satellite filling the gaps. Satellite was never intended to be the primary delivery mechanism for broadband, because of obvious congestion and capacity constraints.
The Trump NTIA is doing all of this under the pretense that giving taxpayer money to billionaires (for satellite service they already planned to deploy) instead of spending it on high quality fiber is “saving taxpayers money.” That’s generally resulted in widespread delays for this BEAD (Broadband, Equity, Access and Deployment) program, despite Republicans spending much of last election season complaining this program was taking too long.
The Trump NTIA hijacking of the program has also created a $21 billion pool of “non deployment funds” made up of the fake savings Republicans claim they created by screwing up the program. There’s a looming fight emerging over what happens to that money. Congress and the infrastructure law specifically states this money is supposed to be dedicated to expanding broadband access.
States would obviously like to use this money either for broadband, or for local infrastructure. But you get the sense that this giant wad of cash is very tempting for the Trump administration to just hijack and use as an unaccountable slush fund, doled out to its most loyal red state allies (or just kept by the “Treasury”).
After delays and excuses extended in to last summer, the Trump NTIA was supposed to provide guidance for states on how this money could be used earlier this month, but has been a no show:
“Under pressure from senators at an appropriations hearing, Commerce Secretary Howard Lutnick last month sought to calm fears when he said that so-called “non-deployment” funds under the Broadband Equity, Access and Deployment, or BEAD, program would not be rescinded.
But with no guidance so far from the department’s National Telecommunications and Information Administration, which was expected but delayed this week, lawmakers and others are pushing to have their voice heard on exactly how states will be able to use the $21 billion pot of money.”
It’s not clear if states can trust the word of Lutnick (who’s been a little distracted by Epstein allegations). The Trump administration has threatened (quite illegally) to withhold BEAD funding entirely from states that attempt to stand up to telecom monopolies or insist that taxpayer-funded broadband is affordable. There were also several initiatives to withhold BEAD funds if states tried to regulate AI.
Unsurprisingly, many states are afraid to be honest about what a cock up this whole hijacking has been in the press for fear of losing billions in potential (and already technically awarded) funding.
There’s a real potential here that taxpayer money that was originally earmarked for future-proof, ultra-fast fiber network is going to be repurposed into a general free for all slush fund that gets redirected to whoever praises the Trump administration the most. And I wouldn’t be surprised that this ultimately results in state lawsuits against the federal government for redirecting funds.
“I think the state officials who think they’re going to be made whole, need to reread the Merchant of Venice, because [NTIA boss Arielle] Roth is coming for her pound of flesh,” Sascha Meinrath, Palmer Chair in Telecommunications at Penn State University, told me in an email. “I wouldn’t be at all surprised if it’s operationalized in a way to directly target or disadvantage blue states — whether in what it does, or what’s tied to the acceptance of the funding.”
One last side note: last election season the “abundance” folks like Ezra Klein spent ample time parroting GOP criticism of the admitted delays and problems with this BEAD program (ignoring why the program took so long, as well as other examples of similar broadband grant programs from the same year doing well) as an example of a Democratic bureaucratic dysfunction.
But I’ve noticed that since Trump hijacked the program, introduced massive delays, redirected billions to billionaires, and even tried to run off with half the funding, the subject hasn’t been revisited by Klein since. Quite generally (since infrastructure just doesn’t get those clicks) the press coverage of this whole mess has ranged from nonexistent to positively tepid.
Filed Under: bead, broadband, elon musk, fiber, ntia, satellite, taxpayers, telecom
I’ve written repeatedly about how Republicans effectively rewrote the 2021 infrastructure bill (they voted against) to ensure that billions of dollars in taxpayer-funded broadband grants (intended to be spent on affordable, next-generation fiber) was stolen from local communities, and instead given to Elon Musk and Jeff Bezos for expensive, congested satellite service.
I’ve also explained in detail why that’s a problem: These networks may be initially cheaper to deploy, but the networks lack the capacity to actually scale to meet demand. Data indicates they harm astronomy research and the ozone layer. They’re ultimately more expensive for consumers than fiber deployments, especially if those fiber deployments are by cooperatives or community owned.
In short, taxpayer money directed toward Jeff Bezos and Elon Musk is also money directed away from higher-capacity, faster, locally-owned (and usually cheaper) fiber and wireless alternatives. And it’s money given to billionaires for technology they already had deployed or would have deployed anyway. It’s a coordinated hijacking of taxpayer money that will actually undermine affordable internet access.
Enter the Wall Street Journal editorial board, which aggressively lies about all of this all of this in a new, comically terrible editorial. The headline starts with an outright lie about how Trump somehow “unbroke the Internet”:
How did Trump “unbreak the internet?” Well again, he basically hijacked a huge chunk of the billions we planned to spend on next-generation fiber upgrades to schools, rural communities, and under-served areas, and gave it to Elon Musk for expensive satellite service he (again) already planned to deploy. This, according to the Wall Street Journal, is positively ingenious!
There’s no need to spend money on affordable gigabit fiber, the Journal informs us, because existing wireless and satellite is simply good enough:
“Congress appropriated $42 billion in the 2021 infrastructure bill for states to expand broadband to “unserved” and rural communities. The spending was unnecessary since satellite services like SpaceX’s Starlink and 5G fixed wireless services were rapidly closing the so-called digital divide. Upward of 99% of households already had high-speed internet.”
Again, these services are expensive. They’re congested. They’re spotty. They’re heavily monopolized by a handful of giant companies. They get slower as more people use them. Yes, you’ve technically “connected the public,” but you’ve done a piss poor job of it. Claiming it’s “unnecessary” to push fiber deeper in to more places shows the author is either lying or has no idea what they’re talking about.
The Journal is particularly incensed that the original infrastructure bill actually bothered to consult with local states, communities, and tribes to best determine their needs. Positively outrageous!
“States receiving funds had to consult with unions, native American tribes and “local community organizations” on their plans to expand broadband. This gave liberal special interests a veto and let them extort developers.”
Calling tribes “Liberal special interests” is very weird and gross, but no matter. The Journal is also extremely upset that the original plan for your taxpayer money was to ensure that the resulting fiber access was affordable. Republicans have already destroyed those efforts, but the Journal is still, somehow, very mad about it months later:
“Providers applying for funds were also advised to offer “low-cost” plans and provide “nondiscriminatory access to and use” of their networks on a “wholesale basis to other providers . . . at just and reasonable wholesale.” This was a back-door way to impose utility-style rate regulation on internet providers.”
The Trump administration not only has gutted all broadband consumer protection at the FCC, and destroyed all efforts to make sure taxpayer-funded broadband is actually affordable, they’ve illegally threatened states that they’ll lose already-awarded taxpayer money if they challenge the administration. This excites the very serious Wall Street Journal editorial board very much!
The real issue here is that the government engaged in some very light efforts to try and ensure broadband was affordable. This upsets regional telecom monopolies that have worked tirelessly to erode all local competition so they can rip you off. The idea that the government might come in and functionally prevent monopoly predation is unthinkable to these weirdos and Rupert Murdoch.
From here, the Wall Street Journal pushes a bunch of lies about how the corrupt Republican and Elon Musk hijacking of the program is saving taxpayers all sorts of money (several of the figures here are just foundationally incorrect):
“The average cost for each new household or business connected in Louisiana fell to $3,943 from $5,245. Louisiana’s most expensive project had run at $120,000 per connection under the Biden rules—almost as much as a starter home—but the Trump team brought the cost down to $7,547 per connection. Similar savings have occurred in other states.”
Again, many communities were going to get high capacity, gigabit fiber, in some cases as low as $60-$70 a month. Instead, they’re getting Elon Musk’s Starlink broadband access, which is not only much slower (which also gets worse as more people use it), but costs also upwards of $120 a month (plus hundreds of dollars in up front hardware costs, and in some cases, congestion fees).
Yes, that technology is cheaper to deploy, and useful in areas with no access, but it’s nowhere near as good as “last mile” fiber right to your doorstop.
It’s slower. It’s more expensive to use. And the primary company benefitting it is run by an overt white supremacist. Again, this all very much excites the Wall Street Journal editorial board, but it’s not going to be exciting to the millions of Americans who realize (hopefully) they got ripped off by a bunch of bullshitters three years from now.
Anyway, this is all to say that the Wall Street Journal is very excited that we redirected billions in taxpayer dollars away from affordable local fiber access and instead gave it to Jeff Bezos and Elon Musk for expensive, congested, satellite service that destroys the ozone layer, ruins astronomy, and isn’t affordable for most of the Americans who actually need it:
“The broadband program illustrates how the Biden combination of spending and regulation created market distortions and raised costs. It would be better if Congress let markets allocate capital, but the Trump Administration is ensuring taxpayer funds are spent in a more cost-effective way that does less economic harm.”
That Republicans hijacked a promising program to thrown billions of taxpayer dollars at billionaires for inferior product will be clearly borne out by data in the years to come. At which point the authors of this Wall Street Journal editorial will either be dead or have moved on to lying about something else.
Filed Under: broadband, elon musk, fiber, high speed internet, infrastructure bill, internet access, satellite, subsidies, taxpayers
Companies: wall street journal
The President of the United States is currently promising to spend the same pot of money on at least nine different things. The pot in question: revenue from all the random and fluctuating tariff duties that are almost certainly unconstitutional, which means he’s likely going to have to pay some or all of it back. While he’s busy making impossible promises with money that isn’t really his, his administration is simultaneously trying to hide that revenue from the courts to make it harder for companies to recover what they’re owed.
If this sounds like a multi-layered scam, that’s because it is.
I’m sure you’ve heard Trump mention this or that thing he’s planning to spend the tariff revenue on, such as rebate checks, farmer bailouts, better childcare or covering the loss of revenue from the tax cuts he gave to all his billionaire friends.
Ben Werkschkul, at Yahoo Finance, has now detailed nine different things that Trump has promised to fund with the tariff revenue (and I’m pretty sure the number was seven when I first opened the article, but it appears to have been updated).
According to Yahoo Finance’s count, the president has floated at least nine different ideas for how tariff money could be used, stretching back to the 2024 campaign.
It’s a list of promises that ranges from sending Americans $2,000 tariff dividend checks to paying for the tax cuts that Republicans instituted this summer.
The math alone should be disqualifying. The tariff revenue couldn’t cover even a fraction of these nine different spending promises if you added them all up. But Trump appears to be treating this like an endless pool of money—repeatedly spending the same dollars on different programs as if the laws of basic accounting don’t apply to him.
But, even worse, the tariffs are pretty clearly unconstitutional nonsense, and the Supreme Court seems poised to strike them down quite soon. Companies like Costco are already getting in line, demanding they get the money they paid for tariffs back from the US government.
And then, as if to emphasize how much of a criminals scam this is, rather than setting aside funds to pay back what’s likely to be tens of billions in refunds once the Court rules, the Trump admin is already trying to hide the money to make it harder to pay back.
The Trump administration is racing to deposit the money it’s raised from tariffs into the U.S. Treasury, a tactic that could make it harder for companies to get refunds for duties the Supreme Court may strike down in the coming months.
That has triggered a flurry of lawsuits in recent weeks, with companies ranging from wholesaler Costco to canned tuna seller Bumble Bee looking to preserve access to potential refunds for tens of billions of dollars worth of tariff fees. And it foreshadows the messy legal battles likely to play out if the high court rules President Donald Trump overstepped his legal authority when he imposed his steep “reciprocal” tariffs and other duties on major trading partners.
According to court filings and half a dozen people familiar with the cases, Trump’s Customs and Border Protection is denying requests to delay finalizing tariff payments and transferring the funds to the Treasury.
To recap: the administration is collecting what are effectively illegal taxes, rushing to co-mingle those funds with general Treasury revenue to make them harder to trace and recover, while simultaneously promising to spend that same money multiple times over on programs that would cost far more than the tariffs have generated. And they’re doing all of this while the Supreme Court is actively considering whether the tariffs are constitutional in the first place.
Here’s the final insult: when the Supreme Court strikes down these tariffs and orders refunds, American taxpayers will be on the hook to cover those payments. And that’s to pay back money that many of us already paid in the form of higher prices to companies to cover the cost of tariffs.
Trump was swept into office with promises of lowering costs. Instead, he raised taxes massively through tariffs, drove inflation higher, and engineered a scheme where Americans effectively pay twice—once through higher prices, and again through the tax refunds his unconstitutional gambit will require.
The guy who bankrupted a casino and built an empire on stiffing his vendors is now running the same playbook on the American public—except this time, we’re all stuck paying the bill.
Filed Under: donald trump, promises, tariffs, taxes, taxpayers
Companies: costco
We’ve covered how there’s a real push afoot to implement statewide “right to repair” laws that try to make it cheaper, easier, and environmentally friendlier for you to repair the technology you own. Unfortunately, while all fifty states have at least flirted with the idea, only Massachusetts, New York, Minnesota, Colorado, California, and Oregon, and Washington have actually passed laws.
And among those states, not one has actually enforced them despite a wide array of ongoing corporate offenses (though to be fair to states there is kind of a lot going on).
This reform movement, which sees broad bipartisan support, had even started to reach toward the military, which is probably the poster child for over-billing, dysfunctional repair monopoly, “parts pairing,” and other predatory efforts to jack up the cost of maintenance and ownership.
Back in June we mentioned how Army Secretary Daniel Driscoll had committed to including right-to-repair requirements in all existing and future Army contracts with manufacturers. Some very light language to this effect was to be included in the latest National Defense Authorization Act by Democrat Elizabeth Warren of Massachusetts and Republican Tim Sheehy of Montana.
Earlier this year, Driscoll offered up a useful example of why reform is important:
“Driscoll recently pointed to a Black Hawk helicopter part to show how contractor restrictions drive up costs. The original equipment manufacturer refuses to repair or replace a small screen-control knob that grounds the aircraft when it breaks — forcing the Army to purchase an entire new screen assembly for $47,000. Driscoll said the Army could make the knob for just $15.”
Picture that problem, at scale, across the entirety of U.S. military hardware, planet wide.
But despite the bipartisan popularity of right to repair reforms, companies weren’t keen on losing money via a government crackdown on their grift. So the various policy and lobbying fronts for America’s defense contractors spent much of this fall trying to frame the modest reforms as an affront on innovation to scuttle the reforms as the House and Senate debate over bill versions.
And guess what, they succeeded:
“The House’s Data-as-a-Service Solutions for Weapon System Contracts provision, which would have required DoD to negotiate access to technical data and necessary software before signing a contract, was removed from the final text of the annual legislation released over the weekend. The Senate’s provision requiring contractors to provide the military with detailed repair and maintenance instructions was dropped from the bill as well.
Instead, the legislation requires the Defense Department to develop a digital system that would track and manage all technical data and verify whether contractors and subcontractors comply with contract requirements related to technical data. The compromise version of the bill also requires DoD to review all existing contracts to determine what contractors were required to deliver and what data DoD can access.”
That’s basically worthless bureaucracy as it applies to any sort of meaningful right to repair reforms.
Again, these reforms were about as basic as they get. Still, they would have likely opened the door to taxpayers saving billions of dollars annually when it comes to paying too much for the repair and maintenance of U.S. military equipment. It was a no brainer reform, but because the United States is genuinely too corrupt to function, even that was ultimately a bridge too far.
To add insult to injury, we’ve got fake Trump populists and Silicon Valley execs like Elon Musk running around pretending they care about efficiency. But in instances like this, where there’s real potential to improve government efficiency, you’ll notice they’re nowhere to be found because the reforms would interfere with their ability to rip off the public.
Filed Under: bipartisan, defense department, dod, efficiency, hardware, military, reform, right to repair, software, taxpayers
Republicans are rewriting an infrastructure bill grant program to redirect billions of dollars to Elon Musk’s Starlink satellite broadband service. The claim is that this is necessary because Starlink is the perfect solution for the country’s rural broadband users and deserves this money. The reality is that Starlink continues to show that it lacks the capacity or affordability to actually accomplish the job.
Low-Earth Orbit satellite broadband services like Starlink have their uses, but will always be dealing with capacity constraints. That means higher prices, weird restrictions, and, as of November 2024, a $100 “congestion charge” for a service that’s already too expensive for many of the rural Americans who could most benefit.
It didn’t take long for that “congestion charge” to soar to $500 in some areas. Now it’s already risen as high as $750 in states like Washington as Starlink is forced to try and deter users in some markets from using the increasingly congested network:
“The change can crank up the starting price simply to own the Starlink dish on a residential plan to $1,099.”
Other parts of the country see no congestion charge, but there’s no guarantee that they won’t see one down the line as the network subscribership grows. It’s also very likely the company will increasingly have to resort to doing things like throttling higher definition videos, or engaging in other network management tricks to try and keep the service semi-reliable.
You might recall that Republicans and Elon Musk threw a hissy fit a few years ago when the Biden FCC prioritized “future-proof” fiber and higher-capacity 5G services over Starlink in previous government subsidy programs, (correctly) expressing concerns that the service lacked the capacity to provide consistently reliable speeds on the taxpayer dime.
Ever since then Republicans and Musk have been working tirelessly to “correct” this oversight, to the point where they’re now rewriting a major $45 billion infrastructure bill broadband grant program to ensure Starlink gets a massive portion of taxpayer subsidies. Many right wingers, like c-tier comedian turned podcaster and fashy-apologist Joe Rogan, act as if Starlink is akin to magic.
But the technology has been criticized for harming astronomical research and the ozone layer. Starlink customer service is largely nonexistent. It’s too expensive for the folks most in need of reliable broadband access. The nature of satellite physics and capacity means slowdowns and annoying restrictions are inevitable, and making it scale to permanently meet real-world demand is expensive and not guaranteed.
These are all things Republican Elon Musk ass kissers either don’t know, or don’t care about as they work to reward their billionaire benefactor. It will be up to their constituents to figure it out later. But money redirected to Starlink is money redirected to cheaper and better broadband alternatives, including super cheap gigabit fiber access and community-owned and operated broadband networks.
So again, Starlink is a nice step up if you’re in the middle of nowhere, lack any other connectivity options, can afford it, and don’t care about its potential environmental impact. But it shouldn’t be taking priority in terms of taxpayer subsidies. Unless, of course, you only care about kissing Elon Musk’s ass and don’t actually care about the constituents you claim to serve.
Filed Under: broadband, congestion, elon musk, fcc, fiber, high speed internet, low earth orbit satellite, subsidies, taxpayers, telecom
Companies: spacex, starlink
In a day full of terrible Supreme Court rulings there was one bit of good news: in their FCC v. Consumers’ Research ruling, the court rejected a bid by radical right wing Republicans to destroy a popular $8 billion FCC program that connects poor and rural schools and communities to the internet.
The plaintiff in this case, Consumers’ Research, isn’t really a consumers’ group. It’s a right wing political project designed to put a veneer of pleb-friendly populism on efforts to destroy corporate oversight. The organization (which maintains a part of their website tasked with tut-scolding “woke” companies) sued the FCC claiming that the Universal Service Fund (USF) was unconstitutional.
The USF applies a small surcharge on traditional phone lines to fund broadband expansion to rural unserved locations (of which the U.S. has a lot thanks to rampant telecom monopolization and the corruption that coddles it). The program has had some problems with subsidy fraud in decades’ past, but more recently it’s been cleaned up and proven hugely beneficial for rural communities.
Consumers’ Research claimed the FCC was illegally overstepping its authority by levying the fee. The Trump-stocked Fifth Circuit, pretty radically, agreed with them last summer.
The Supreme Court ruled 6-3 (with Thomas, Alito, and Gorsuch dissenting) in favor of the FCC. It’s a curious reversal of a broader (and very successful so far) Republican court trend attempting to destroy all remaining government oversight of corporate power and dismantle whatever’s left of regulatory independence. You know, for rural small town populism or whatever.
A Good Ruling, Driven By Less Ethical Motivations
Why did the right-wing Supreme Court buck its broader trend of boxing in regulatory autonomy? Largely because of the influence of telecom giants like AT&T. While the USF does genuinely fund a lot of useful broadband expansion, it also throws billions of dollars into the laps of telecom giants like AT&T, Verizon, Charter, T-Mobile, and Comcast.
These telecoms were opposed to destroying the USF for what should be obvious reasons. And there had been hints for several months that they had managed to convince several Supremes that the USF should be maintained. Though it speaks volumes that Thomas, Alito, and Gorsuch thought nothing of destroying a hugely-popular program built over decades with broad bipartisan support.
But the remaining Republican majority rejected Consumers’ Research because the telecom industry has a plan underway to get much more taxpayer money in the next few years.
With traditional phone lines dying, the USF program risks running out of money. So there’s been a long-standing conversation about how to expand the contribution base so you can keep funding the program and keep connecting rural schools, libraries, and communities to the internet. This conversation, as is usually the case in the U.S. telecom policy, is being dominated by self-serving giants like AT&T.
AT&T and their friends have a proposal they’ve been planning for years: they want to have the FCC apply a new tax on streaming video services like Netflix to theoretically help fund broadband expansion.
On the surface, having tech companies help fund broadband expansion isn’t a terrible idea. The problem is that companies like AT&T have an extremely long history ripping off subsidy programs, overbilling schools, and pocketing money that was earmarked for rural communities. And Republicans have an even longer history of badly mismanaging subsidy programs and ignoring corporate subsidy fraud.
So what’s far more likely to happen is the USF gets dramatically expanded once the FCC has a working voting Republican majority, and steadily becomes a much larger and much worse-managed slush fund that dumps billions in additional money in telecom monopolies’ laps in exchange for fiber networks that are mysteriously somehow never fully deployed.
There’s an obvious a tension here between right wing and Libertarian zealots who want to destroy all federal governance, and right wing grifters who want to steal taxpayer money in new and creative ways. There’s also tension within telecom monopolies’ like AT&T’s interest to destroy all remaining FCC oversight, yet keep the FCC just functional enough to keep slathering it with billions in taxpayer dollars.
There are good faith people (including consumer groups) who support some sort of streaming tax expansion just to keep the USF alive. But in a government where the expansion will be literally written by AT&T lawyers and overseen by weird lackeys like Trump FCC boss Brendan Carr, I think assuming this will be done and enforced competently and ethically is delusional wishcasting.
Such a Netflix tax would generate untold billions in additional subsidies for telecoms, at the cost of much higher streaming prices for consumers. Which should help you understand why some members of the Republican Supreme Court suddenly and mysteriously grew an uncharacteristic conscience. Kill the USF, and you kill the opportunity to make telecom monopolies significantly wealthier in the years to come.
Filed Under: big tech tax, brendan carr, broadband, consumers' research, fcc, fiber, netflix tax, rural, slush fund, subsidy, supreme court, taxpayers, telecom, usf
There are a few ways to think about Elon Musk’s announcement this week that he’s stepping back from DOGE. The first is that he’s leaving a job he officially doesn’t have. The second is that he’s returning to a job (Tesla CEO) that he’s supposedly been doing this whole time. The third, and perhaps most interesting, is that none of this actually makes any sense at all.
The announcement came during Tesla’s latest earnings call (which was, to put it gently, not great). With Tesla’s sales and profits plummeting while Musk has been busy redesigning (read: destroying) the entire US government, you might think focusing more on Tesla would be logical. But that assumes any of this is actually about logic.
Like so many Musk pronouncements, this one’s mostly vaporware. Not only had this “stepping back” been reported weeks ago (though never confirmed), but if you look closely at what he actually said, he’s not really leaving DOGE at all, even as news headlines claimed otherwise. He just claimed he would spend less time on DOGE, giving a bit more time to his many other companies.
He said he’ll continue to spend a “day or two per week” on government issues “for as long as the president would like me to do so.”
But, of course, according to official filings from the US government, Elon Musk isn’t even a part of DOGE, an obvious lie that basically no one (other than the DOJ in sworn statements to a court) pretends are true.
Technically, Musk is a “special government employee” who supposedly can only advise the President, though in practice, we know that’s also not true. He’s basically running big parts of the government. And despite having no constitutionally-required appointment for such authority, he appears to be deciding what things can be cut, and shutting down entire agencies. While some have speculated the supposed “May” step down is because those SGE jobs are only supposed to last 130 days, apparently the government can issue waivers to allow those SGEs to stay on significantly longer.
And, really, Musk has violated a ton of other rules that apply to SGEs, including those around conflicts of interest, impartiality, and a ban on “partisan political activities.” Given how much Musk has done that involves a conflict of interest, and his ongoing partisan political activities, it seems that he doesn’t much care to follow the rules. So, the idea that anyone in this government cares about the supposed 130 day limit is laughable.
A closer reading of Musk’s actual words shows he’s not really going anywhere. He’s just promising not to spend all his time in DC anymore. And even that comes with a rather significant caveat:
“I’ll have to continue doing it for, I think, probably the remainder of the president’s term, just to make sure that the waste and fraud that we stop does not come roaring back, which will do if it has the chance,” Musk said
Let’s talk about those savings Musk is so worried about protecting. There are basically three stories here, each more puzzling than the last.
First, there’s the story of the incredible shrinking savings target. Musk started by promising to cut $2 trillion from the federal budget right before the election. Post-election, perhaps realizing people might actually try to hold him to that number, it suddenly became $1 trillion. A few weeks ago, he lowered expectations again to $150 billion.
If you’re playing at home, the difference between $2 trillion and $150 billion is… just about $2 trillion.
The second story is about what’s actually being cut. Even the $150 billion is nonsense — not only has DOGE failed to demonstrate any actual waste or fraud (certainly no one’s been charged with fraud), but the programs they’re recklessly cutting are likely to cost taxpayers way more than they save.
And the third story? That’s about how DOGE counts its supposed savings. As the NY Times detailed, those numbers look to be pretty much fictional:
One of the group’s largest claims, in fact, involves canceling a contract that did not exist. Although the government says it had merely asked for proposals in that case, and had not settled on a vendor or a price, Mr. Musk’s group ignored that uncertainty and assigned itself a large and very specific amount of credit for canceling it.
It said it had saved exactly $318,310,328.30.
Even as the media keeps fact-checking these claims, DOGE just quietly makes random changes to its website, hoping no one notices. The NY Times caught them deleting entries that triple-counted the same savings, confused “billion” with “million”, and even claimed credit for canceling contracts that ended during the George W. Bush administration.
But the errors keep coming. Their second-biggest claimed savings? A supposedly canceled IRS contract worth $1.9 billion that was actually canceled under Biden. Their third-biggest? A $1.75 billion savings from canceling a vaccine nonprofit grant that had already been paid in full.
This might all be amusing if it weren’t so stupid and causing so much damage. Even as Musk was publicly walking back expectations to $150 billion in savings, DOGE’s own website was still claiming $160 billion. And then there’s the matter of Musk’s Twitter activity, where he seems to have discovered an entirely new category of fictional math, in which he will regularly and repeatedly retweet claims that disagree with his own admission that DOGE will only save $150 billion.
The latest example? Musk enthusiastically amplifying claims about massive Social Security fraud. Here he is, just yesterday, retweeting someone claiming $12.6 billion in monthly savings from supposedly removing “7 million scammers” from the system:
There are several problems here. The first, as Wired detailed, is that not a single part of this claim is true. The Social Security Administration has long had systems to prevent payments to deceased beneficiaries, including (but certainly not limited to) their automated processes to stop anyone over 115 from receiving any payments at all. Which means, rather awkwardly for Musk’s claims, none of these supposedly fraudulent recipients were actually receiving any money to begin with, and even if they were cut from the system, the savings would be $0.
Actually, it would be worse than that, because the SSA had already considered this exact issue. A report shows they deliberately chose not to update death records for these super-elderly non-recipients, because doing so would cost far more than any theoretical fraud it might prevent. The few actual cases of payments to deceased beneficiaries are handled through other means.
More than anyone else in the world, Musk is in a position to find out what’s really happening, but he’s been repeating the false claims about Social Security for months now. And, hell, for a supposed genius, even he should be able to do the basic math and realize that if his SS savings alone were $12.6 billion a month, that alone would basically equal the claimed $150 billion in annual savings.
Even worse, right around the time that Musk was telling the world to maybe expect $150 billion in savings, he retweeted some rando’s account claiming DOGE had already saved nearly twice that:
That retweet claiming $291.6 billion in savings came… three days before Musk announced at a cabinet meeting that savings for the entire fiscal year might reach $150 billion. In a normal world, you might expect his supporters (or the media?) to notice this rather stark contradiction. But this isn’t a normal world. Both numbers are somehow treated as equally valid, equally true, equally worth celebrating.
There’s a pattern here that goes beyond just bad math. Musk leads DOGE while government lawyers swear under oath that he doesn’t. He’s supposedly running Tesla while spending his time dismantling the federal government. He claims massive savings that don’t actually exist. He retweets numbers that directly contradict the numbers he personally announced just days earlier.
The whole thing feels like it should collapse under the weight of its own contradictions. But it doesn’t, because it was never meant to make sense. It’s basically all kayfabe — that peculiar form of theatrical fakery where the audience chooses to believe despite knowing better.
The difference is that unlike wrestling, where the fakery is harmless entertainment, this performance is actively destroying what had been the most amazing democracy and economy on the planet. And that’s a lot less fun to watch.
Filed Under: doge, elon musk, kayfabe, savings, taxpayers
Companies: tesla
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
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