Repeating Old Mistakes on Broadband

June 7, 2022

In a June 2021 paper, “A Radically Pragmatic Agenda to Connect Rural America,” we carefully examined the history of federal programs to provide broadband to everyone. We found that:

The federal government spent a stunning $105 billion on broadband- and telephone-related initiatives from 2010 to 2019. This total includes both grants and loans, and is reported in 2019 dollars.

The funding programs for broadband put in place after the financial crisis of 2008-2009 were spread out over far too many unrelated purposes, rather than focused on expanding coverage to unserved areas.

As a result, far too little progress was made in closing the broadband gap, especially given the size of the federal funding.

As we wrote in the 2021 paper, “no matter how many billions of dollars are allocated, history shows that the money can be spent unwisely if policymakers are not careful.”

Unfortunately, the Biden Administration seems determined to repeat history. The Notice of Funding Opportunity issued by NTIA to allocate funds for the “Broadband Equity, Access, and Deployment Program” (BEAD) is filled with requirements that will divert attention and money away from the fundamental task of connecting unserved Americans. In particular, the NOFO requires that:

….each Eligible Entity must include in its Initial and Final Proposals a middle-class affordability plan to ensure that all consumers have access to affordable high-speed internet (emphasis in original).

The first problem, of course, is that “middle-class affordability” is a moving target. The second problem is that the NOFO suggests that applicants fulfill this requirement by a variety of approaches, all of which suck money away from the primary goal of connecting the unserved. For example, the NOFO proposes that:

….some Eligible Entities might require providers receiving BEAD funds to offer low-cost, high-speed plans to all middle-class households using the BEAD-funded network.

Of course, that requirement will either discourage providers from building a BEAD-funded network, or reduce the amount of money available for building new connections to the unserved. In either case, less money for connecting the unserved.

In addition, the NOFO also allows applicants to apply money towards “non-deployment” uses, including but not restricted to user training, computer science education programs, and prisoner education. All of these are worthy uses, but don’t move the ball forward in terms of broadband connections.

As we said in the 2021 report, we have a “once in a lifetime opportunity.” If Democrats want to finally close the broadband gap, especially in rural areas, they need to make sure that the $45 billion is used in a focused way — to connect the unserved.