Who should the government help get superfast internet access?
The question isn’t addressed directly in President Biden’s multi-billion dollar infrastructure plan, which spends tens of billions of dollars building broadband access, but doesn’t provide many details on how the money will be spent.
But veterans of the country’s decade-long efforts to expand the country’s broadband footprint fear the new plan carries the same bias as its predecessor: billions will be spent expanding Internet infrastructure to the remotest areas of rural America, wherever few people live and little is used to connect millions of urban families who live in areas with high-speed services that they cannot afford.
“The most important thing from an economic and social perspective is getting everyone online who wants to be online,” said Blair Levin, who oversaw a broadband project with the Federal Communications Commission during the Obama administration and is now a fellow at. is the Brookings Institution. “From a political point of view, the greatest political capital lies in accelerating the deployment where there is none, that is in rural areas.”
There is political and economic logic in using billions of taxpayers to bring broadband to the rural communities that make up much of former President Donald Trump’s political base that Mr Biden seeks to win. However, some critics fear that the capital-heavy rural strategy may leave urban America behind, which is more populous, diverse, and productive.
According to data from the Census Bureau, around 81 percent of rural households are connected to broadband, compared to around 86 percent in urban areas. But the number of urban households without a connection, at 13.6 million, is almost three times as large as that of the 4.6 million rural households without a connection.
“We must also be careful not to fall into the old traps of aggressively solving the problem of one community – one that is racially diverse but predominantly white – while relying on hope and market principles to solve another community’s problem – a community that is also racially diverse but disproportionately made up of people of color and lower incomes, ”Joi Chaney, senior vice president of politics and advocacy for the National Urban League, recently told the House Appropriations Committee.
Cabling in rural America is clearly expensive given the long distances involved, but it is doable. In a policy paper several years ago, Paul de Sa, a former chief strategist at the FCC, estimated that expanding broadband access from 86 percent to 100 percent of rural America would cost about $ 80 billion. If the goal was to only cabled 98 percent, the price would drop to $ 40 billion.
If money isn’t an issue, Mr de Sa said, the federal government could get high-speed fiber optic cables past every farm in the country and also ensure the 18 million households in rural and urban America that aren’t yet connected are served by.
But money is always tight. Mr Biden has tried to woo the Republicans by slashing his original infrastructure plan and cutting the broadband proposal from $ 100 billion to $ 65 billion. The tighter Republican counter-offer is mostly concentrated in rural areas and offers little to urban dwellers.
The Democratic proposal presented to Congress by MP James Clyburn from South Carolina and Senator Amy Klobuchar from Minnesota devotes only a small part of its resources to expanding broadband connections in cities and suburbs.
Indeed, the rural focus in broadband financing has a long history. From 2009 to 2017, the federal government invested over $ 47 billion in programs to expand high-speed access to remote farms and hamlets.
These investments often did not develop as advertised. For example, the Rural Utilities Service, a descendant of the federal agency created during the Great Depression to electrify rural America, ran a $ 3.5 billion program of loans and grants that it said it did would help expand broadband to seven million hard-to-reach millions of people in 2.8 million rural households. It would also connect 362,000 businesses in rural America and 30,000 key institutions, including schools and law enforcement agencies.
Five years later, the program had helped install 66,521 miles of fiber optic cable and added thousands of wireless access points. But all of those devices only supported 334,830 subscribers, and the program returned about a tenth of the money to the Treasury Department because it couldn’t find viable projects.
To connect urban families, it is not necessary to lay thousands of kilometers of fiber optic cable through meadows and valleys. Telecommunications companies have already installed a lot of fiber optics and cables in cities. The expansion of broadband to unserved urban households, most of them in low-income neighborhoods and often the homes of colored families, usually requires making the connection cheaper and more relevant.
A 2019 survey by the Pew Research Center found that half of people who didn’t have broadband said they couldn’t afford it. Only 7 percent cited a lack of access to high-speed networks as the main reason.
June 1, 2021, 12:36 p.m. ET
“Our investments don’t just have to fill the provisioning or availability gap,” argued Ms. Chaney. “You also have to close the acceptance gap, the usage gap and the economic opportunity gap in order to achieve truly digital justice.”
The Biden team seems to be aware of this. Administration officials suggest encouraging new companies to deploy broadband in order to increase competition and thereby reduce prices.
But there’s little evidence that phone and cable providers compete much on price. In many areas there are one to three providers of high-speed access who can set prices freely without losing customers.
“If you look at the past decade, there is no evidence that there will be additional competition in the market anytime soon that will bring prices down for most people anytime soon,” said Mr de Sa.
The administration also wants to encourage and subsidize cities and local governments to build high-speed infrastructure that internet providers could use to provide services to residents. The idea is that many companies would use these common lines to offer competing plans and drive prices down.
But Mr. Levin, the former FCC official, said the communities have no cost advantage over cable or telecommunications companies. So the economy does not support the idea that a community could offer services at a much lower price. And local lawmakers may not be as interested given the other demands on local government. “If I were on the city council, I’m not sure I would give my money for it,” said Mr. Levin.
This pushes efforts to expand broadband penetration into one of the more difficult areas of American politics: the debate over what is often derogatoryly referred to as “welfare.”
Experts like Mr. Levin argue that near universal broadband usage is likely to require ongoing subsidization to make the service affordable for low-income families. And the government would have to convince such households to subscribe to broadband by providing online services that are valuable to low-income families – such as health, education and employment – and helping them use the technology.
Biden’s infrastructure proposal doesn’t contain much of this. A White House datasheet said permanent subsidies are “not the right long-term solution for consumers or taxpayers.”
In addition, subsidies are not chosen well. Only 36 percent of rural adults say the government should provide subsidies to help low-income Americans purchase high-speed Internet services at home. By comparison, according to a 2017 poll by Pew, 50 percent of city dwellers and 43 percent of suburbanites.
In early May, the federal government launched a $ 3.2 billion temporary program to offer low-income families a $ 50 or $ 75 per month grant to pay for broadband services. It’s supposed to expire when the money is used up or six months after the pandemic is declared, whichever comes first.
If made permanent, it could be a turning point for many American families. But such a subsidy could run to $ 8.4 billion to $ 12 billion a year or more for 14 million households.
The only source of ongoing help is called Lifeline, which offers a $ 9.25 per month grant to purchase communications services. But very few eligible families actually use it to purchase Internet access; most use it for cellular service.
There are other ideas as well, such as requiring that large tech companies that benefit hugely from online services add to the cost of cabling in the country. Government programs that would benefit from having all Americans online, such as Medicaid and Medicare, could also help fund it.
“There are some ways forward, but first you have to realize that we as a country benefit from the fact that everyone is on board and that private market forces will not produce this result,” said Levin. “I think we’re finally here. But we need guidance and a plan to get us over the finish line. “