Verizon CEO renews call for broadband subsidy boost

Verizon CEO Hans Vestberg
Instead of accessibility, Verizon CEO Hans Vestberg said he thinks “the government should work on subsidy much more.” (Verizon)

As U.S. politicians sort out the details of a massive infrastructure investment package, Verizon CEO Hans Vestberg argued they should focus broadband funding more on promoting affordability rather than accessibility.

During a J.P. Morgan investor conference, Vestberg explained he views the digital divide as a multi-faceted problem, with key hurdles related to issues around accessibility, affordability and usability. But Vestberg said operators are already well on their way to addressing the first of those three.

“I think that when it comes to accessibility, I think that all carriers are building quite extensively,” he said, adding Verizon covers “almost all individuals in this country with” its wireless network. “Now we're turning that into fixed wireless access or using our fiber-to-the-home. So we are clearly doing that, and I guess my competitors are doing the same,” he continued.

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Instead of accessibility, Vestberg said he thinks “the government should work on subsidy much more” to ensure families can afford broadband in the first place rather than allocating money to “building products that are actually not meeting the demands of those families.”

“I'm talking about they need to be able to do remote learning. They need to be able to have telehealth. They need to be able to work from home,” he explained.

Vestberg’s comments echo statements made at the conference earlier in the week by AT&T CEO John Stankey who said, “If we get policy right for affordability, I think the infrastructure’s going to be there. It’s a question of do we do things to reform the Universal Service Fund and get policy right on affordability so those that maybe need a little bit of help to get on that robust infrastructure that’s being built in fact get a little bit of the help they need.”

Charter Communications CFO Christopher Winfrey also highlighted affordability earlier in the week, stating a permanent extension of the Federal Communications Commission’s (FCC) Emergency Broadband Benefit (EBB) program “would be beneficial for the country.” Through the program, eligible households receive up to a $50 per month discount on broadband service, or up to $75 for those on Tribal land.

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Both Verizon and AT&T have been hammering the need for broadband subsidy reform over the past year. In a January 2021 blog post, Verizon called for the rollout of a new permanent broadband benefit program offering a subsidy of between $20 and $50 to replace the $9.25 aid currently offered by the FCC’s Lifeline program.

Meanwhile, Stankey called for an overhaul of Lifeline in a September 2020 op-ed for Politico, a theme the operator’s EVP of federal regulatory relations Joan Marsh repeatedly hit on in a series of subsequent blog posts. In March, Marsh wrote the EBB would “help address the immediate broadband connectivity needs of many low-income Americans,” but said the operator would continue its push “to identify permanent and sustainable funding solutions.”