Keeping Local Governments' Hands out of the Broadband Cookie Jar | Citizens Against Government Waste

Keeping Local Governments' Hands out of the Broadband Cookie Jar

The WasteWatcher

Despite the availability of $800 billion for infrastructure projects, including broadband, the bipartisan infrastructure package includes another $65 billion for broadband deployment.  The funding is being made available with few, if any, guardrails against local governments using the funding to overbuild over top existing broadband networks, and it is neither vendor nor technology neutral. 

The need for access to broadband was never made clearer than during the COVID-19 pandemic, when tens of millions of Americans suddenly needed to go online to work, learn, and socialize.  As a result of the investment of more than $1.8 trillion by the private sector to create the technology necessary to build the world’s most resilient networks, a competitive marketplace, and mostly light touch regulations, the U.S. telecommunications network held up far better than its global counterparts.  In June 2020, a few months into the lockdowns and shutdowns, fixed and mobile broadband download speeds in the U.S. were 150 percent and 75 percent higher, respectively, than the comparable global median download speeds. 

Americans can now get connected through multiple means, including cable, fiber, fixed wireless, mobile, wireline DSL, and satellite broadband.  Families and businesses in hard-to-reach areas of the country have found that newer technologies like TV white space and low-earth orbit satellites are making the internet more accessible.  Consumers continue to reap the benefits of these technologies.  U.S. Telecom reported in its “ 2021 Broadband Pricing Index” that the U.S. has made three times the investment in broadband deployment and adoption as the European Union, resulting in better service and higher speeds at a lower cost, even with the increased usage during the pandemic.

While the best way to allow this incredible progress to continue would be to keep the government out of the way, President Biden’s June 9, 2021 “competition” Executive Order (EO) and his American Jobs Plan both prioritize a single technology (fiber) and networks owned or operated by local governments, cooperatives, and nonprofits rather than private companies.  The resiliency and success of broadband service and access depends on multiple technologies and a competitive marketplace.  A single technology and limited providers will result in higher prices, fewer choices, and less innovation, among other adverse consequences.

According to Pew Research, during the pandemic, 40 states made broadband deployment a priority with 12 legislatures making large funding commitments to existing broadband programs, ranging from $1.5 million to $51 million in 2020.  The American Rescue Plan Act (ARPA) provided $350 billion for states and localities to make infrastructure improvements, including broadband deployment.  States like Montana and Vermont, within the parameters of their state laws regarding government-owned networks, are using ARPA money to build out their networks and cover most or all unserved areas of their states. 

Some of the ARPA spending is being directed toward building government-owned networks, and without proper guardrails on government funding put in place by federal, state, and local governments, the likelihood of overbuilding existing broadband networks instead of reaching unserved communities is exceptionally high.  There must be strict limits to prohibit state and local governments from building what will end up being new dark networks where service already exists, and instead provide incentives for service providers to build new networks in communities where broadband is lacking at even the basic minimum speed threshold of 25/3Mbps. 

According to a study by BCG in conjunction with CTIA, 5G deployment will add “$1.4 trillion to $1.7 trillion to the U.S. GDP and create 3.8 million to 4.6 million jobs in the next decade.”  The deployment of 5G networks will undoubtedly help to create thousands more jobs across the nation. States can take action to help with deploying next generation communications technology by reducing the regulatory burden on providers.  For example, in 2019, the Georgia legislature approved a bill that streamlines the application process for 5G small cell deployment.  This will increase wireless broadband capabilities across the state and increase competition against regional competitors like Nashville, Tennessee and Charlotte, North Carolina.  Other states can follow this example by reviewing and modifying regulatory restrictions on deployment and streamlining the application processes for new broadband infrastructure.  

As states and local governments consider how to use the funds for broadband available through ARPA and other federal sources, competition and cost-effectiveness must be at the forefront of this process.  Taxpayers should be concerned if a single technology or a preference for a local government network is tied to the use of this money.  Any grants or other funding provided by a state government for broadband should be directed toward unserved areas of the state and be vendor and technology neutral. 

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