The House of Representatives is marking up the $3.5 trillion infrastructure package, and the Senate recently passed a $1 trillion infrastructure package of its own.
The Senate package contains nearly $65 billion in spending on broadband, including $42.5 billion allocated for a grant program to expand access. $14.2 billion would subsidize connections for low-income people. But Federal Communications Commission Commissioner Brendan Carr thinks this additional spending is unnecessary. “The reality is we have enough money that has either been appropriated by Congress or budgeted by various agencies to bridge the digital divide multiple times over.” He went on to say that if you broaden out to look at the money that is available for infrastructure including broadband, there is $800 billion available.
Carr is absolutely correct. The government already has enough unspent funds for broadband. The money spent in the Senate infrastructure package would be unlikely to have any meaningful impact on closing the digital divide.
Examples of already allocated broadband funding include $11 billion spent by states out of the American Rescue Plan Act, nearly $20 billion from the FCC’s Rural Digital Opportunity Fund, and tens of billions available to schools to connect students and families. All of this government money is on top of the private investment occurring outside of government. Private companies have already spent $1.6 trillion on infrastructure build-out. And that’s to say nothing of the investment by SpaceX and Amazon in creating constellations of high-speed satellite internet.
Meanwhile, the National Telecommunications and Information Administration would be in charge of administering the grant program. The agency’s history with grant programs suggests the money spent this go-around might also have little impact.
So, why are many in Congress pushing for an additional $65 billion?
No doubt some congressional members believe additional spending is needed to close the digital divide once and for all. But where the broadband money is flowing to hints at ulterior motives. President Joe Biden’s infrastructure proposal, containing $100 billion for broadband, prioritized “support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives — providers with less pressure to turn profits.” The message is clear: Biden thinks the government should be providing internet access, not the private sector.
The infrastructure package mirrors this belief. The bill makes cooperatives, nonprofit organizations, utilities, and local governments all eligible grant recipients. These organizations’ history of running broadband networks is spotty at best. In fact, some states such as Louisiana, Minnesota, and North Carolina even have laws on the books preventing the creation of government-run broadband networks. The bill would conflict with these state laws.
Additionally, all companies accepting grant funding will be required to provide “a low-cost broadband service option” to “eligible subscribers,” terms that remain vague even in the 2,000-plus pages of legislation. These two parts of the infrastructure proposal look like they’re intended to get the government not only regulating rates, but running networks as well.
The House’s $3.5 trillion infrastructure proposal makes this intent even clearer. The legislation creates a tax credit for government-run networks expressing a clear preference for publicly run internet over the current system. Both of these proposals should be rejected, not only because the country can ill afford tens of billions of dollars in additional spending, but also because the last thing the country needs is a government takeover of the internet.
Rejecting additional spending doesn’t mean the government needs to rest on its laurels. States can use the money that has already been allocated to them to speed up build-outs from winners of the Rural Digital Opportunity Fund. Furthermore, they could create voucher programs that use market mechanisms to connect consumers in rural areas with technologies such as satellite internet.
Rather than simply throwing taxpayer money at the problem while intertwining government and the broadband industry, we should be making sure already allocated funds are being put to good use. Ultimately, it will be technological innovation and private investment that closes the divide, not government funding or, even worse, government running the networks.
Eric Peterson is the director of the Pelican Center for Technology and Innovation at the Pelican Institute for Public Policy. He lives in New Orleans.
