Yes, 'ObamaNet' Is Here: Meet ConnectHome, the ‘Free’ Internet That Costs Taxpayers Much More Than a Private Sector Plan

Some or all of that $150 million may be moved around from existing HUD grants, so this may not be new spending, but it’s still not “free.” If it’s considered “same-category” spending, HUD and the White House may decide Congress doesn’t get a say in the reallocation, either.

Where are the grants going?

The ConnectHome announcement says 8 ISPs “are partnering with mayors, public housing authorities, non-profit groups, and for-profit entities to bridge the gap in digital access for students living in assisted housing units.”

There’s no breakdown of expenses borne by the ISPs vs. subsidies by the taxpayer. This,  carefully, doesn’t say whether the “partnership” includes grant monies or is more of the ISPs-subsidize-the-poor exercise under Connect2Compete.

Later in the same paragraph, the White House says:

Cherokee Communications, Pine Telephone, Suddenlink Communications, and Vyve Broadband will work together to ensure that over 425 of Choctaw’s public housing residents have access to low-cost, high-speed [I]nternet.

That sure sounds like new construction via grants.

Having spent more than a dozen years building out Wide-Area Networks both permanent and temporary, I’m puzzled why four companies are required to wire 425 persons for Internet access, and how much it will cost taxpayers.

That’s 425 persons, not housing units.

Is ConnectHome competitive to existing free or low-cost Internet? It compares poorly with FreedomPop, free for basic use of their 4G hotspot up to certain carefully vague limits. (That assumes there’s 4G coverage; more below.)

This $545.45 per family doesn’t even appear to compete on price with the current offering on EveryoneOn’s ConnectHome page -- $10/month for 3GB of data via a T-Mobile hotspot.

True, ConnectHome could subsidize 4G cellular buildout in the 27 cities and one tribal nation. (I’d wager there are major coverage holes, especially on reservations.) That approach would arguably benefit existing phone subscribers and low-income residents via offsetting subsidies. But there’s no indication that’s what’s happening. If I had to guess, it’s expensive and labor-intensive cable installation to individual units.

Are the expenditures reasonable compared to the benefits?

While the jury’s still out, ConnectHome’s direct taxpayer subsidies smells a lot like the United States Department of Energy Weatherization Funding program, a targeted giveaway to well-connected construction companies. Weatherization was reported as one of the most wasteful and ineffective green programs in a long history of such failures, admittedly for billions and not millions.

Smart taxpayers may wish to ask their representatives and interested media to look into ConnectHome to keep it from suffering the same fate.