The White House Broadband Plan

Reading the White House $100 billion broadband plan was a bit eerie because it felt like I could have written it. The plan espouses the same policies that I’ve been recommending in this blog. This plan is 180 degrees different than the Congress plan that would fund broadband using a giant federal, and a series of state reverse auctions.

The plan starts by citing the 1936 Rural Electrification Act which brought electricity to nearly every home and farm in America. It clearly states that “broadband internet is the new electricity” and is “necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected”.

The plan proposes to fund building “future proof’ broadband infrastructure to reach 100 percent broadband coverage. It’s not hard to interpret future proof to mean fiber networks that will last for the rest of the century versus technologies that might not last for more than a decade. It means technologies that can provide gigabit or faster speeds that will still support broadband needs many decades from now.

The plan wants to remove all barriers so that local governments, non-profits, and cooperatives can provide broadband – entities without the motive to jack-up prices to earn a profit. The reference to electrification implies that much of the funding for modernizing the network might come in the form of low-interest federal loans given to community-based organizations. This same plan for electrification spurred the formation of electric cooperatives and would do something similar now. I favor this as the best use of federal money because the cost of building the infrastructure with federal loans means that the federal coffers eventually get repaid.

The plan also proposes giving tribal nations a say in the broadband build on tribal lands. This is the third recent funding mechanism that talks about tribal broadband. Most Americans would be aghast at the incredibly poor telecom infrastructure that has been provided on tribal lands. We all decry the state of rural networks, but tribal areas have been provided with the worst of the worst in both wired and wireless networks.

The plan promotes price transparency so that ISPs must disclose the real prices they will charge. This means no more hidden fees and deceptive sales and billing practices. This likely means writing legislation that gives the FCC and FTC some real teeth for ending deceptive billing practices of the big ISPs.

The plan also proposes to tackle broadband prices. It notes that millions of households that have access to good broadband networks today can’t use broadband because “the United States has some of the highest broadband prices among OECD countries”. The White House plan proposes temporary subsidies to help low-income homes but wants to find a solution to keep prices affordable without subsidy. Part of that solution might be the creation of urban municipal, non-profit, and cooperative ISPs that aren’t driven by profits or Wall Street earnings. This goal also might imply some sort of federal price controls on urban broadband – an idea that is anathema to the giant ISPs. Practically every big ISP regulatory policy for the last decade has been aimed at keeping the government from thinking about regulating prices.

This is a plan that will sanely solve the rural broadband gap. It means giving communities time to form cooperatives or non-profits to build broadband networks rather than shoving the money out the door in a hurry in a big reverse auction. This essentially means allowing the public to build and operate its own rural broadband – the only solution I can think of that is sustainable over the long-term in rural markets. Big commercial ISPs invariably are going to overcharge while cutting services to improve margins.

Giving the money to local governments and cooperatives also implies providing the time to allow these entities to be able to do this right. We can’t forget that the electrification of America didn’t happen overnight and it took some communities as more than a decade to finally build rural electric networks. The whole White House infrastructure plan stretches over 8 – 10 years – it’s an infrastructure plan, not an immediate stimulus plan.

It’s probably obvious that I love this plan. Unfortunately, this plan has a long way to go to be realized. There is already proposed Congressional legislation that takes nearly the opposite approach, and which would shove broadband funding out of the door within 18 months in a gigantic reverse auction. We already got a glimpse of how poorly reverse auctions can go in the recently completed RDOF auction. I hope Congress thinks about the White House plan that would put the power back into the hands of local governments and cooperatives to solve the broadband gaps. This plan is what the public needs because it creates broadband networks and ISPs that will still be serving the public well a century from now.

6 thoughts on “The White House Broadband Plan

  1. I don’t disagree with anything you have said here about the Biden plan. However, I have my doubts that it end up as we have seen it portrayed so far. There will be much wrangling in Congress over the money and just politics in general. The second issue and perhaps the most important one is where will the money come from? All of these spending bills don’t fund themselves and the answer can’t always be let’s tax the rich and corporations.

  2. As a standalone bill I would support it even though the cost is high and the funding is questionable. The electricity pushed all across the US has vastly paid for itself time and time again. The ability to work from home, if one was inclined and could, would save in reduced energy consumption among other things. I don’t believe in home schooling as it is not an effective way to teach most students, the one one interaction can make the difference between actually learning something and just learning to slide.

    It will never be a standalone bill. It will get shoved into a package of pork sausage that will just drive the US further down into becoming the third world country the left seems to want.

  3. My reaction to authorship was the same as yours. However, I diverge on one point—I see zero need for 100B in grants. 0-3% 30-50 year bonds largely built rural telephone and electric. A fiber network is expensive to build compared to operational cost. If one can carry the financing, the network should easily be financially successful. If it is not, then we need to think very carefully about using my tax dollars on a continuing loser.

  4. Agree that this is a much needed 180 to the current effort. However, I’m confused on one point. Doug indicates these will be loans. Patrick indicates these will be grants. I have not read the plan. Which is it? Or, is it a combination of the two?

    • At this early stage there is no way to know if this would loans, grants, or some combination. Electrification was done in in the 1930s and 40s through loans – there is not enough detail in the White House proposal to know which they have in mind.

  5. My belief is that the WH plan is so similar to your thinking is because your ideas are widely known and appreciated. These reports are not only informative — their relentlessly practical and honest perspective makes for high policy credibility.

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