May 13, 2021

Broadband in America


KEY TAKEAWAYS

  • The Biden administration has proposed spending $100 billion on high-speed internet, focused on the failed model of municipal broadband networks.
  • Democrats should work with Republicans on ways to increase broadband access that are fiscally sound, prioritize competition and consumer choice, and are transparent and accountable. 
  • A group of Republican senators proposed allocating $65 billion for broadband as part of their infrastructure roadmap released last month.

Broadband, a generic term for high-speed internet, is an important component of modern life and increasingly is viewed as basic infrastructure. In the face of a pandemic that drove much of American life online, Congress took bipartisan action to ensure more Americans had access to broadband internet.

President Biden has proposed spending $100 billion on high-speed internet. His plan would create an unprecedented role for government and risk turning the internet into something resembling an outdated utility. Republicans share the president’s goal of increasing access to broadband. Democrats should work with Republicans on solutions that are fiscally sound, prioritize competition and consumer choice, and build transparency and accountability into the system.

Internet Speed

Broadband speed is typically measured by the number of megabits transferred per second, or Mbps. The Federal Communications Commission’s benchmark for the minimum speed required to qualify as “broadband” has increased over the years and is currently 25 Mbps for downloads, 3 Mbps for uploads.

Some liberal groups have argued for significantly increasing the FCC standard, from 25/3 to 100/100. Congressman Jim Clyburn has introduced legislation that would raise the standard for federally funded projects to 100/100. At a March Commerce, Science, and Transportation Committee hearing examining recent federal actions to expand broadband, former FCC Commissioner Michael O’Rielly cautioned that policymakers and the FCC should not be so quick to increase the minimum thresholds that we leave behind the people who have nothing: “I say hold off on the speeds and … stay focused on the unserved.”

His comments line up with research that has found diminishing utility and reduced demand for speed once networks reach a certain point. The average download speed in March for fixed broadband in America was 182 Mbps, more than sufficient for most internet users and uses. Increasing the threshold to 100/100 would mean that about 58% of U.S. households could be eligible for federal subsidies. This would incentivize providers to upgrade networks that already provide sufficient speed for most households, rather than expanding to areas that lack service today.

Faster Speeds Allow More Lavish Internet Uses

Broadband

broadband boondoggles

The Biden proposal “prioritizes support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives.” This ignores numerous examples of local governments trying, and failing spectacularly, to run broadband networks; municipal networks have been a horrible deal for taxpayers. In 2004, Provo, Utah, put up $39 million in bonds to cover the cost of its municipal broadband network. The network was never self-supporting, and in 2011 the city added a $5.35 charge to electric bills just to keep up with the bond payments. In 2013, the city sold the network to Google for $1.

According to a 2020 report, the citizens of Provo are not alone in having to deal with the broken promises left behind in the wake of these failed networks. One network in Pennsylvania is actually on track to turn a profit, in 349 years. Another, in Groton, Connecticut, consistently ran in the red before the town admitted reality and sold it in 2013 for pennies on the dollar. Taxpayers are still responsible for $27.5 million in debt, and the failed experience caused the city’s credit rating to drop. The report found “overwhelmingly, these government-owned and taxpayer-funded networks leave budgets in the red due to underestimated buildout costs, subscriber rates falling far short of projections, and issued bonds straining local budgets for years to come.”

Municipal networks are often sold on the promise that prices for consumers will be less than from private service providers. But research shows that municipal broadband prices are not substantially different from private ISP prices. Digital literacy, device cost, and other factors also contribute to the digital divide.

The Biden plan also puts its thumb on the scale in more subtle ways – its reference to undefined “future-proof” broadband appears to be a reference to fiber-based internet. Government programs should not favor one technology over another and should not presume that today’s solutions won’t be surpassed. By locking in government-owned fiber networks as the default technology, the “future-proof” Biden proposal would close the door on future technological breakthroughs that could provide more cost-efficient ways of delivering broadband to rural and other underserved areas. These could include satellite technology, which is being tested and developed, or something that does not exist yet.

federal programs

An alphabet soup of federal agencies and programs currently administer grants, loans, and other forms of federal support to deploy broadband across America. While many of these programs have had success, there are redundancies and inefficiencies throughout the federal system, some programs have been plagued by fraud, and levels of accountability and transparency vary widely.

The FCC administers a number of broadband programs as part of its Universal Service Fund, which aims to make telecommunications services, including broadband, available across the country. It is funded through fees on telecommunication providers, not through congressional appropriations. Programs supported by the USF include the Connect America Fund, the Lifeline Program, the Rural Health Care Program, and the Schools and Libraries Program.

The Rural Digital Opportunity Fund is a new program initiated by the FCC. The commission plans to award $20.4 billion to bring broadband to rural homes and businesses in two phases. The first phase, completed last December, awarded $9.2 billion to deploy broadband in unserved rural areas. The second phase will begin when the FCC completes a broadband mapping process mandated by the bipartisan Broadband Deployment Accuracy and Technological Availability Act. The law, passed in March 2020, requires the FCC to collect granular service availability data in order to accurately map which areas of the country have broadband access, and at what speeds, and which areas lack access.

The FCC has not yet produced the map, despite repeated calls from congressional leaders. Continued oversight and pressure on the FCC to finish its mapping process is an issue for policymakers to consider in the 117th Congress.

The Rural Utilities Service at the Department of Agriculture also administers several loan and grant programs focused on construction, improvement, buildup, and maintenance of rural broadband. Other agencies that administer broadband programs include the Department of Education, the National Telecommunications and Information Administration, the Department of the Treasury, and the Institute of Museum and Library Services. Libraries are a key point of access to the internet for many Americans – more than 99% of public libraries offer free internet service.

Providers frequently complain about the federal regulatory maze they must navigate. Programs have different standards and eligibility requirements, there are different portals for applying, and applications require different documents at each step. The process leads to waste, fraud, abuse, and overbuilding, where federal dollars duplicate other federal or private investment. To help prevent overbuilding, the Broadband Interagency Coordination Act, which was included in the Consolidated Appropriations Act of 2021, requires the NTIA, the FCC, and the Department of Agriculture to coordinate the distribution of federal funds for broadband programs.

republicans offer solutions

Republicans support alternatives to failed government-owned networks and have offered solutions that prioritize competition, innovation, consumer choice, and transparency to expand broadband access to all Americans.

A group of Republican senators – led by Shelley Moore Capito and including Roger Wicker, John Barrasso, and Pat Toomey – proposed allocating $65 billion for broadband as part of their infrastructure roadmap released last month. Republicans on the House Energy and Commerce Committee also unveiled a package of 28 broadband bills at the beginning of this Congress.

Issue Tag: Technology