As President Trump plays up his plan for $1 trillion in infrastructure spending, lawmakers, government officials and the industry hope to see broadband Internet service expansion included in it. The only problem is getting Republicans and Democrats to agree on where the money will come from.
Getting support for broadband expansion is the easy part, and evidence of that sentiment can be found in both the Senate and the House. Forty-eight senators from both sides of the aisle signed on to a letter sent to Trump in January asking him to prioritize policies related to increasing access to “high-speed, reliable broadband.”
“Expanding access to broadband, both rural and urban, is the infrastructure challenge of our generation, and we cannot afford to wait to make progress on this important goal,” the senators wrote. “From large companies that employ thousands to small businesses on Main Street, broadband access is not a luxury, it is a necessity. The Internet expands opportunities for commerce and strengthens our economy … These benefits can only be fully realized when connections are fast, reliable and affordable.
“That is why improving broadband access must be a priority in the 115th Congress and broadband must be part of any discussions regarding infrastructure investments to meet the demands of the 21st-century economy,” the senators continued.
A similar bipartisan letter signed by 71 members of the House was sent to the president on the same day.
Any infrastructure plan “certainly should include broadband — it’s important that the entire nation be served,” Rep. Leonard Lance, R-N.J., vice chairman of the House Energy Subcommittee on Communications and Technology, told the Washington Examiner. The heart of the broadband question — expanding access to rural and underserved areas — “is not a partisan issue,” Lance asserted.
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According to the Federal Communication Commission’s most recent Broadband Progress Report from January 2016, one in 10 Americans, or 34 million people, lacked access to “advanced broadband.” The agency defines this as 25 Mbps (megabits per second) download and 3 Mbps upload speeds.
The agency has already taken action to fill the gaps. On Jan. 31, new chairman Ajit Pai announced the creation of the Broadband Deployment Advisory Committee, with the goal of convening industry groups, government agencies and other stakeholders to identify ways to speed up the spread of high-speed Internet by reducing barriers to broadband investment. But Pai is looking for more help in Trump’s prospective infrastructure plan and any legislation Congress takes up afterward.
“Although there is no time frame for a congressional infrastructure bill, we have the experts in place at the FCC ready to move if Congress gives us the responsibility to do so,” Pai said during a recent speech. He argued that the FCC’s efforts could be funded through its Universal Service Fund, which aims to create universal broadband access in areas where it is financially difficult to do so.
Pai also pushed for the infrastructure plan to include a proposal he called “Gigabit Opportunity Zones,” which would offer tax incentives to Internet service providers to deploy high-speed broadband services in low-income neighborhoods.
Asked if Republicans would support investment in the USF, Lance said that “could very well be the case.” But the beginning of any discussion on where the money would come from, Lance said, begins with “fundamental tax reform,” a top priority for the Republican-controlled Congress.
Democrats have made the case that tax cuts championed by Republicans aren’t enough to bring broadband to hard-to-reach areas.
During a Communications and Technology Subcommittee hearing last week, Rep. Frank Palone Jr., D-N.J., attacked GOP draft legislation that would use tax breaks as a means to bring broadband to rural and tribal areas. “[T]ax cuts alone won’t get it done — especially in areas where there is not a strong business case, like [on] tribal lands,” he said. Rep. Mike Doyle, the top Democrat on the subcommittee, said the bill lacks “a viable business case for investing in these regions.”
Democrats on the Senate side, led by Minority Leader Chuck Schumer, D-N.Y., have ideas of their own, beating Trump to the punch with a $1 trillion infrastructure plan of their own. In it, they suggest closing unspecified tax loopholes and spending $20 billion in direct federal government spending for broadband development.
To this point, Lance said there still needs to be a discussion with members across the aisle, but was also keen to note that Republicans control both houses of Congress, not to mention the White House.
“I hope Democratic members would look to our proposals,” Lance said. “I certainly think it’s possible to work together.”
A proposal by two of the Trump campaign’s financial advisers, including now-Commerce Secretary Wilbur Ross, called for $137 billion in tax breaks to boost private sector investment in infrastructure projects over 10 years. If Trump’s infrastructure plan does include tax breaks for broadband, it will have the support of the wireless trade group CTIA, which represents companies such as Verizon, AT&T, T-Mobile and Sprint.
“When it comes to deployment of cutting-edge wireless technology, success does not need to cost the taxpayers a dime,” CTIA Senior Vice President and General Counsel Tom Power told the Washington Examiner. “If governments at all levels adopt smart zoning and permitting policies, Accenture reports that the wireless industry is primed to invest $275 billion in the U.S. over the next decade to build next-generation 5G wireless infrastructure.
“This will create 3 million new jobs in communities of all sizes across the country and boost our national economy by $500 billion annually, all at no cost to taxpayers.”
One telecom expert recently warned that any legislation that seeks to hand companies more tax breaks doesn’t guarantee more investment in networks.
“[T]he money could alternatively be used for acquisitions, dividend hikes, share buybacks, raises for executive or larger cash reserves,” said the Brookings Institution’s Blair Levin, a nonresident senior fellow and former chief of staff to FCC Chairman Reed Hundt in the 1990s. “But,” he added in a recent blog post, “it is unlikely, in my view, to materially change the investment math that makes deployment of next-generation networks so slow.”
Trump has also entertained the idea of auctioning off spectrum to wireless carriers in order to stimulate infrastructure investment. During a recent meeting with his aides and executives, the president inquired whether this would be a feasible solution, according to the Wall Street Journal.
This idea would align with Sen. John Thune’s proposed MOBILE NOW Act, aimed at expanding the amount of the spectrum that is available for commercial licensing and helping to streamline infrastructure development for next-generation “5G” services.
In a letter to the leaders of the Communications and Technology Subcommittee before last week’s hearing on infrastructure, a coalition of technology and free-market groups shared its support for MOBILE NOW as well as the GOP “Dig Once” draft legislation.
Citing the potential savings found in a 2012 Government Accountability Office report, the coalition said underground installation of conduit tubes carrying fiber optic cables supporting broadband service during federally funded highway or road construction projects could be a boon to underserved areas.
“The tiny cost of installing conduit (about 1 percent in added costs) pales in comparison to the taxpayer burden of unnecessary digs, traffic congestion and the opportunity cost of not having high-speed networks that both help support public services and grow the economy,” the coalition wrote.
