AT&T, Verizon Reject FCC Funds To Close Digital Divide

To help close the digital divide, the Federal Communications Commission is offering phone companies millions of dollars to expand high-speed Internet service to rural Americans. But the nation’s two largest phone companies -- AT&T and Verizon -- have told the FCC to keep the money.

One expert said AT&T and Verizon likely declined the funds for this reason: They did not think it was enough. Phone companies have avoided delivering broadband to rural areas because their profit margins are higher in cities. It would likely take a much larger government subsidy to change their minds, said Benjamin Lennett, a policy director at the New America Foundation, a nonprofit, nonpartisan public policy institute. "It underscores how flawed it is to rely on private companies to serve these rural areas where their margins are not going to be that high," Lennett said.