The headlines claimed that the most recent $900 billion COVID-19 relief package includes nearly $7 billion in funding for broadband. That is a lot of money and is one of the biggest awards ever aimed at broadband. Following in my first impressions about the usefulness of the funding.
Replace Chinese Electronics – $1.98 billion. Over a quarter of the funding is being used to ‘rip and replace’ electronics from Huawei and other Chinese manufacturers. This money doesn’t bring any broadband benefit, so it’s disingenuous to call this broadband funding. I’ve wondered about this concept from day one. Network engineers tell me that it would not be hard to firewall this equipment and eliminate any risks that such equipment is spying on us – so this feels more like a political gimmick than anything that’s really needed.
Subsidize Low-Income Connections – $3.2 billion. This provides $50 per month to low-income homes to get a broadband connection. I’m really torn on this one. First, this seems like a big victory in that it’s the first time that the federal government has recognized that there is an urban digital divide. It still looks like the pandemic will be with us for much of this year and this funding can get broadband to homes that really need it.
But at the same time, this also feels like a giveaway to the big ISPs. For instance, Comcast already has a low-income program that provides inferior broadband for $9.95 per month. Does this bill let them bill the federal government $50 for that same program? I also worry that some of this money will go to DSL. AT&T doesn’t deserve a penny of this money after walking away from DSL in October. DSL in general should not be funded since DSL upload speeds are generally set at 1 Mbps or less – which makes the technology worthless for working or schooling from home.
I also worry about what happens when this funding ends. This could fund broadband to 10 million homes for six months or 20 million homes for 3 months and then the program will run out of money. What happens to these homes then? This is a lot of money to spend on a temporary program.
Infrastructure and Adoption in Tribal Areas – $1 billion. This is my favorite part of the funding package because this can lead to building a permanent broadband solution. But this funding has two caveats that could be gotchas. First, the funding can’t be used any place where other federal funding was already assigned. Unfortunately, the FCC has previously funded stupid solutions like Viasat satellite broadband in some tribal areas, and hopefully that can be ignored. This funding also comes with a ticking clock and needs to be spent by the end of 2021. If a broadband project is not already shovel-ready this is going to be a challenge to use.
Digital Inclusion in Minority Communities – $285 million. This money is being earmarked to historic black university and colleges, tribal colleges, and similar institutions. Again, this item seems to be a victory in that the FCC is finally recognizing that broadband has bypassed inner cities and tribal areas. This money could do a lot of good if it goes towards establishing permanent programs. But it also runs the risk of being wasted if the money goes to conducting studies instead of creating programs that will continue to help solve the digital inclusion gap.
FCC Broadband Mapping – $98 million. Everybody has been calling on the FCC to fix the damned FCC broadband maps. But as a consultant, this seems like an extraordinarily large amount of money to get this done. I’m frankly surprised that this couldn’t be done for a tiny fraction of this money – some handful of consultants are going to have a very good year.
Other Awards. Probably the best of the other awards is $300 million for rural infrastructure projects not covered by other specific awards. I would hope the NTIA will use this wisely and award broadband grants to areas that have been misclassified by the FCC maps as having broadband. There is also $250 million to bolster the FCC’s COVID-19 Telehealth grants. Hopefully, that money is mostly used to bring a permanent fiber connection to rural hospitals and health clinics.
Bottom Line. Overall, this funding is disappointing in that it doesn’t live up to the hype that hit the press the day after the funding was announced. But there are good things in here, and hopefully, some of this money helps to fund permanent solutions. But I feel like the money could have been used more wisely than for the big-ticket items like ripping and replacing Chinese electronics or of like overpaying big ISPs to provide low-income broadband. This doesn’t feel like we’re getting $7 billion of value.