Verizon forces users onto pricier plans to get $50-per-month gov’t subsidy
Verizon and other Internet service providers are preventing some low-income customers from getting new $50-per-month government subsidies unless they switch to different plans that are sometimes more expensive.
Over 825 ISPs nationwide are selling plans eligible for the new subsidies that the US government made available to people who have low incomes or who lost income during the pandemic. Verizon stands out among big ISPs in its use of the subsidy to “upsell” customers to pricier plans, according to a story yesterday by Washington Post tech columnist Geoffrey Fowler.
“Soon after the EBB [Emergency broadband Benefit program] launched, I started hearing from Washington Post readers about their frustrations signing up with certain ISPs,” he wrote. “Verizon elicited the most ire from readers.”
Instead of letting people enroll online, Verizon requires them to call a phone number to sign up and then “tells some customers the EBB can’t be used on ‘old’ data plans, so they’ll have to switch,” the Post article said. Verizon is limiting the plans available on both mobile and home Internet service.
The EBB is temporary, lasting until the $3.2 billion in program funding runs out or six months after the Department of Health and Human Services declares an end to the pandemic. Verizon customers who have to switch to a more expensive plan in order to get the $50 monthly discount would have to pay the higher rate after the subsidy expires.
“At the end of the program, you will either continue on your plan at the price without the EBB discount or you will end your Internet-related services with Verizon,” a company FAQ says. “We will give you an opportunity to decide this at the beginning of your enrollment into the EBB program and again before the end of the program. If you do not affirmatively choose to keep your Internet-related services, the FCC requires that we disconnect those services at the end of the EBB program.”
“It seems like EBB only benefits Verizon”
A few Verizon customers who contacted Fowler said that if they switched to a subsidy-eligible plan, they would end up paying more than they do now once the EBB expires. A man named Eric from Hopedale, Massachusetts, was told by Verizon he’d have to switch from a $62 home-Internet plan to a $79 plan, Fowler wrote.
The article continued:
Annie Styles from Arlington, Va., who pays $79 per month for her Internet, says Verizon told her she would have to switch to a plan that would cost her closer to $95. “I stopped pursuing it with them after the math didn’t work out,” she says.
Sharon from Harrisburg, Pa., who asked to be identified only by her first name, said she was told by two customer service representatives that she could receive the EBB discount only if she increased her current Internet speed and reconfigured her TV package, too. She said the ultimate price would have depended on what video package she was forced to switch to, as well as new equipment with fees—but she dropped her EBB application out of frustration before she got that far.
When the EBB ends, she estimates, her overall monthly Internet and TV bill would be at least $50 higher. “In my case, it seems like EBB only benefits Verizon,” she said.
For home Internet, Verizon doesn’t make the subsidy available at all on legacy DSL plans, which it offers in areas where it hasn’t upgraded copper lines to fiber. Verizon apparently still has a few hundred thousand DSL customers, as it reports 6.3 million fiber Internet customers among 6.7 million consumer broadband connections overall. On Verizon fiber service, customers must buy a “FiOS Mix + Match Internet plan” to get the subsidy. The subsidy is also available on Verizon’s 5G and LTE home Internet services.
Verizon fiber-to-the-home Internet customers who have had the same plan for a couple of years and haven’t changed to the Mix & Match pricing system that FiOS adopted in January 2020 would have to give up their old plans. This can be complicated and result in very different prices in cases where a subscriber bundles broadband with TV and/or phone service.
Verizon’s EBB page says that mobile customers can get the subsidy on “a Mix & Match Unlimited phone plan or a Mobile Hotspot as the main or only line on an account.” Phone users who don’t have a Mix & Match plan would have to switch to one to get the $50 discount.
The Mix & Match Unlimited phone plans are for postpaid mobile customers, so it appears that prepaid phone customers cannot get the subsidy through Verizon. When contacted by Ars today, Verizon declined to say whether prepaid phone customers can get the subsidy and did not answer any of our questions directly. Instead, the company pointed us to press releases that lacked specifics. Verizon also would not tell us whether the EBB subsidy is available to mobile hotspot customers with prepaid instead of postpaid plans.
AT&T, Charter, and T-Mobile are also limiting the plans eligible for the subsidies. “One refreshing standout was Comcast, the nation’s largest ISP,” Fowler wrote in the Post. “‘If a customer is on an old plan that’s not offered anymore, they are still eligible as long as they meet the qualification criteria for EBB,’ [Comcast] spokesman Joel Shadle said.”
FCC lets ISPs offer just one subsidized plan
“This is tremendously disappointing,” Dana Floberg, policy manager for consumer advocacy group Free Press, wrote on Twitter. “ISPs could just accept the $50 EBB for all their plans and tiers. The money’s just as good. Forcing people to switch plans in order to use the benefit they legally qualify for is, at best, manipulative.”
ISPs aren’t required to participate in the EBB program, and those that do are not required to make more than one plan available to customers seeking subsidies.
“We adopt our proposal to require providers to offer the EBB Program discount on at least one service offering across all of its approved service areas in each of the states in which it is approved to participate,” the FCC said in its order implementing the program.
Congress required the FCC to implement the subsidy program, and certain aspects like the size of the subsidies and who qualifies were decided by Congress as well. The law that created the program also prevents each ISP from charging subsidized customers more than the standard retail rate that the ISP charged as of December 1, 2020.
The FCC has some flexibility in determining other program rules, and it concluded that requiring only one service plan would boost the number of ISPs that participate. The FCC order said:
Some parties have asked that we require participating providers to make the emergency broadband benefit available on all of their service offerings. On balance, we believe that dictating the required offerings in a temporary program will discourage participation and result in less consumer choice than would otherwise be available if we provided participating providers with more flexibility. However, we note that participating providers may apply the emergency broadband benefit to any of their eligible offerings, including promotional offerings that were available as of December 1, 2020.
While one service plan is enough to meet the program requirements, the FCC said it “encourage[s] participating providers to make EBB Program support available for all its service offerings for eligible households.”
The FCC’s EBB website has information on how to qualify for the subsidies, how to apply, and a list of providers in the program.
Verizon: “We’re on the side of the customer”
Verizon defended its implementation of the subsidy program yesterday, saying it has enrolled nearly 1,000 customers in less than a week.
As part of Verizon’s offering, some eligible customers who were on older plans will need to transition to an EBB-eligible Mix & Match plan to take advantage of the EBB benefit. With these plans, the vast majority of customers save money on their monthly bill. For example, eligible customers could choose a Mix & Match plan offering 200Mbps download and upload Internet speeds for just $54.99, including a router and no additional fees. With the $50 EBB discount, that customer would pay just $5.
Under the Mix & Match plan offerings, customers are seeing an average $25 per month savings when switching from an older plan. With the $50 monthly EBB savings, most customers can realize savings of about $75 each month depending on the services they choose to include.
But that’s just an average, and yesterday’s Washington Post story makes clear that some customers would have to switch to more expensive plans to get the subsidy.
A Verizon spokesperson told the Post, “There’s really no story here. We’re on the side of the customer and want to ensure they pay for what they need, and not for what they don’t.” Despite that claim, low-income customers on older Verizon plans must choose between getting the $50-per-month subsidies or keeping their current plan, even if that plan is cheaper and provides “what they need.”
AT&T, Charter, and T-Mobile policies
AT&T’s EBB page says the subsidy is available on home-Internet service and prepaid phone service. AT&T apparently doesn’t offer the subsidy on postpaid plans.
For home Internet, the AT&T website says the subsidy is available for 100Mbps and 300Mbps plans and on plans with speeds less than or equal to 75Mbps. We asked AT&T if that includes legacy DSL and fiber-to-the-node plans and will update this article if we get an answer. AT&T sells fiber-to-the-home plans with speeds higher than 300Mbps on its fiber service, but apparently those don’t qualify for the discount.
Like Verizon, AT&T requires customers to call in order to sign up for the subsidy. All of AT&T’s subsidy-eligible plans are “subject to the $10/mo. fee for equipment, plus sales tax on the equipment fee of up to $1.50/mo. where applicable,” AT&T says.
According to the Post, “Charter says that ‘an extremely small percentage of customers’ who have legacy Internet plans will have to switch to a Spectrum Internet plan as part of enrolling in the EBB.” Charter told Ars that the legacy plans include those sold by Time Warner Cable and Bright House Networks before they were bought by Charter in 2016 as well as “an extremely small number of Charter plans that predate Spectrum offerings.” Charter said it is making the subsidy available on all current Spectrum Internet plans except its gigabit-speed offering.
“Customers cannot return to a legacy plan once they have chosen a Spectrum option,” Charter said.
T-Mobile’s EBB page states, “There are several plans eligible for EBB at T-Mobile,” but it doesn’t say which ones. A press release announcing T-Mobile’s participation in the program also doesn’t say which plans are eligible. The company’s EBB page does say that the subsidy is available to T-Mobile wireless and home-Internet customers, Sprint customers, Metro by T-Mobile customers, and T-Mobile prepaid customers. We asked T-Mobile for more detail and will update this article if we get a response.
Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.