Broadband Infrastructure Dollars Must be Used Wisely | Citizens Against Government Waste

Broadband Infrastructure Dollars Must be Used Wisely

The WasteWatcher

Now that the Infrastructure Investment and Jobs Act (IIJA) has been signed into law, it is time to make sure that the $1.2 billion of the taxpayers’ money provided in the legislation will be spent effectively and efficiently.  Since the IIJA includes the largest amount of “traditional” infrastructure spending, along with dozens of new programs that are not in that category, the potential for waste, fraud, abuse, and mismanagement is bigger than prior infrastructure bills.  For some programs, like the $65 billion provided for broadband, the cost is nearly 10 times larger than the $7.2 billion allocated that purpose in the $862 billion Obama-Biden stimulus package. 

A December 3, 2021 American Enterprise Institute report explained how the $65 billion for broadband was allocated across federal agencies.  The National Telecommunications and Information Administration (NTIA) is the biggest winner in the broadband spending spree, with $42.45 billion for the Broadband Equity, Access, and Deployment Program; $2.75 billion for the Digital Equity Program; $2 billion for the Tribal Broadband Connectivity Program; and, $1 billion for the Middle Mile Infrastructure program given to the agency to manage.  The Federal Communications Commission (FCC) received an additional $14.2 billion to extend the Emergency Broadband Benefit program (EBB), now renamed the Affordable Connectivity Program.  The EBB received $10 billion from the Consolidated Appropriations Act for 2021 and the American Rescue Plan Act.  The Department of Agriculture is getting $2 billion for its Rural Utilities Service ReConnect program. 

The objective of these expenditures should be to facilitate the deployment of broadband to unserved and underserved Americans in the most cost-effective manner.  This can best be achieved through a technology and vendor neutral approach that includes cable, fiber, fixed wireless or mobile broadband, satellite broadband, and using TV White Space to reach communities where access to fiber would be difficult to achieve.  There should absolutely not be a set aside or preference for government-owned networks.  And there must also be an examination of barriers to deployment for each of these technologies and what can be done to reduce those costs.

But before any broadband funds are spent, the first order of business should be the completion of the FCC’s broadband mapping project.  At the end of 2020, Congress appropriated $7 billion for this purpose as authorized by the Broadband DATA Act.  The goal of the project is to develop granular mapping of broadband deployment across the country so that overbuilding of existing broadband deployments using taxpayer dollars does not occur. 

Secondly, federal, state, and local governments must evaluate what barriers currently exist that hinder broadband deployment.  A December 2, 2021 study by Edward J. Lopez and Patricia D. Kravtin spotlighted one potential barrier, the need for an “effective pole policy to address problematic behavior of certain utility pole owners affecting broadband provider access to utility poles.”  According to the report, pole owners sometimes impose impediments that delay or deny broadband providers access to pole attachments.  CAGW has written for several years on the need for improved pole attachment application processes and reducing barriers due to the costs associated with pole replacement.

The Lopez/Kravtin report emphasizes the adverse effects of municipal and cooperatively owned utilities exercising “significant market power over pole attachment rates, terms, and conditions.”  Because several municipal and cooperative utility owners are also considering becoming broadband providers, the restrictions could be part of an effort to reduce competition in the market by preventing potential competitors the use of their poles, or right-of-way access.  The report estimates that “every month of delayed expansion due to pole owner market power costs Americans between $491 million and $1.86 billion in foregone economic gain, known in economics as deadweight loss (DWL).”

Municipal governments, state policy makers, and federal regulators must continue to look for ways to reduce the cost of deployment, while working with private sector broadband providers to ensure that those without access to broadband are first in line to receive new deployment dollars.  The Obama-Biden stimulus program, which cost “only” $7.2 billion, was replete with wasteful projects, including broadband deployment that failed to deliver on the promised connectivity. 

The $65 billion for broadband in the infrastructure bill is more than sufficient to bridge the digital divide, but that objective will not be achieved if the money is wasted by choosing a specific technology, giving a preference to government-owned broadband, or using outdated maps.  This money should be treated as the precious commodity that it is with an eye toward reducing the cost of deployment by eliminating unnecessary barriers and utilizing the technology that works best for a specific region of the country, rather than imposing a one-size-fits-all approach that picks and chooses winners over losers, with the American people being the biggest loser of all.

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