Barreling towards a broadband blunder
Since President Biden unveiled his $2 trillion “American Jobs Plan” last week, the debate in Washington has focused on an existential — or at least definitional — question. What is infrastructure? As many observers have pointed out, the lion’s share of the plan has nothing to do with infrastructure. One exception I would argue is the $100 billion it proposes for broadband. That clears the definitional hurdle. The problem is the plan itself.
The Biden administration’s broadband plan tracks many of the ideas contained in the $94 billion “Internet for all” infrastructure bill that congressional Democrats introduced earlier this year. And that is not a good thing.
At the outset, their efforts ignore the billions upon billions of dollars that the Federal Communications Commission (FCC) already has in the pipeline for expanding Internet service.
Just last year, the FCC committed $9.2 billion to support the buildout of high-speed service to millions of unserved families over the next ten years. At the same time, the agency budgeted up to $11.2 billion to extend broadband to even more Americans through a second phase of that initiative. Earlier this year, the FCC stood up a new $3.2 billion program to subsidize Internet service for low-income Americans. And just last month, Congress provided the FCC with an additional $7.1 billion to support Internet connections for students. The FCC will also distribute up to $9 billion over the next ten years to bring 5G to rural America plus an additional $1.9 billion for carriers to upgrade their insecure infrastructure.
So how much of this funding has gone out the door? None. Not one penny from this $40 billion tranche has been spent.
Think about that. During the 2020 campaign, President Biden pledged a moon shot $20 billion for rural broadband. We now have double that amount waiting to be distributed. Yet Democrats are poised to pour a hundred billion dollars on top of those billions upon billions of unspent dollars.
But wait, there’s more! Congress just sent $360 billion to the Treasury Department and $190 billion to the Department of Education for a variety of projects, including broadband. Nearly all of those funds remain unspent as well. Despite this, the Democrats’ proposal has made no effort to determine how far these existing funds will go or to tailor the size of their legislation to any needs that might remain. Measure never, cut checks often appears to be Washington’s new proverb.
Price tag aside, the Democrats’ approach is plagued with substantive flaws that will only make it harder to close the digital divide.
For one, it dedicates funds to upgrade communities that already have high-speed Internet services so that they can receive the superfast “future proof” connections of tomorrow. Overbuilding existing networks with taxpayer dollars does nothing to connect the millions of Americans that live in communities with no Internet service today. They should be our priority.
For yet another, it puts price controls squarely on the table. President Biden said that “Americans pay too much for Internet service” and vows action on this front. Rate regulation would be a surefire way to scare off the private sector investment needed to bridge the digital divide.
President Biden’s claim also rests on a false premise — namely, that Americans are now paying more and getting less for their broadband dollars. The opposite is true. A 2020 study of 36 OECD countries determined that America’s wireless customers get the most value for their money. In fact, prices decreased 45 percent on the wireless side over the past decade and by similar margins for high-speed wireline services since 2015, while prices for all consumer goods have been increasing. Like all Americans, I would be happy to pay less for Internet service. I just have no interest in paying less for service that does not work.
COVID-19 demonstrates this. Internet traffic surged around the globe as families stayed home and recreated their daily routines online. Our networks performed despite the massive spike in usage. Meanwhile, officials in Europe asked Netflix to reduce their video quality to prevent the continent’s networks from breaking. Why would we want our networks to perform more like Europe’s?
The problems with the Democrats’ plans do not end there. The congressional bill also proposes a haphazard distribution of funds. A large portion would go to states or areas on a per capita basis. So D.C., would get roughly the same cut of this funding as Alaska, which is more than ten thousand times larger. This is backwards and would only expand the rural–urban divide.
There’s no need to guess where all this is heading. Following the 2008 recession, Congress appropriated a then-unprecedented $7.2 billion for broadband. In the government’s haste to shovel money out the door, waste, fraud, and abuse flourished. Providers used taxpayer dollars to overbuild existing networks, rather than connect unserved communities. Projects were suspended, others canceled outright, and congressional oversight hearings followed with vows of “never again.” Yet here we are again.
There is another way. Rather than appropriating additional dollars in blunderbuss fashion, we can administer the substantial funds already available to the FCC while unleashing additional private sector investment. We can do this last part by cutting the red tape that continues to plague infrastructure projects, rather than micromanaging builds through ham-handed, government-imposed conditions. That is the winning approach proposed by House Republicans earlier this year.
That’s also the playbook we followed at the FCC from 2017 through 2020. And it’s one that led to a real infrastructure boom. In 2016, while bogged down by outdated regulations, U.S. providers built just 708 new cell sites. In 2019, after we streamlined infrastructure rules, providers built over 46,000.
It is time to double down on those successful policies. Otherwise, we’re not building back better. We’re barreling towards a broadband blunder.
Brendan Carr is the senior Republican on the Federal Communications Commission.