Christopher Ali, a professor at the University of Virginia, says in his upcoming book Farm Fresh Broadband that technology neutrality is one of the biggest policy failures of our time. I completely agree, and today’s blog explores the concept and the consequences.
Over the last decade, every time that a pot of grant money has appeared on the horizon, we’ve heard talk at the FCC about making sure that there is technology neutrality when choosing the winners and losers of federal grants. This phrase had to be invented by one of the big ISPs because as is often typical of DC politics, the meaning of technology neutrality means exactly the opposite of what you might think it means.
Technology neutrality is a code word for allowing slower technologies to be funded from grants. The first time I remember hearing the phrase was in 2018, during the lead-up to the CAF II reverse auction. This was a $2 billion reverse auction for locations that hadn’t been claimed in the original FCC CAF II program. Many in the industry thought that federal grant funds ought to only be used to support forward-looking technologies. The term technology neutrality was used to support the argument that all ISPs and technologies should be eligible for grant funding. It was argued (mostly by ISPs that use slower technologies) that the FCC should not be in the game of picking winners and losers.
The technology neutrality proponents won the argument, and the FCC allowed technologies with capabilities as slow as 25/3 Mbps into the reverse auction. The results were what might be expected. Since lower-speed technologies tend to also be the least expensive to build, the slower technologies were able to win in a reverse auction format. It was not surprising at the end of that auction to see that three of the four top winners will collect $580 million to deploy slower technologies. This included fixed wireless providers AMG Technology (Nextlink) and WISPER, as well as high-orbit satellite provider Viasat.
The same argument arose again as the rules were being developed for the RDOF reverse auction. The first auction offered $14 billion in subsidies for ISPs to build last-mile broadband in places that the FCC thought had no broadband with speeds of at least 25/3 Mbps. The FCC heard testimony from the industry about the technologies that should be eligible for the subsidies. In the end, in the name of technology neutrality, the FCC allowed every technology into the reverse auction. The following is a quote from the FCC order that authorized the RDOF funding:
Although we have a preference for higher speeds, we recognize that some sparsely populated areas of the country are extremely costly to serve and providers offering only 25/3 Mbps may be the only viable alternative in the near term. Accordingly, we decline to raise the required speeds in the Minimum tier and we are not persuaded that bidders proposing 25/3 Mbps should be required to build out more quickly or have their support term reduced by half.
Again, it was not surprising to see that the list of RDOF winners included companies that will use the funding to build slower technologies, including fixed wireless and DSL. Only two of the top winners promised to build gigabit-capable broadband everywhere (a consortium of electric cooperatives and Charter). The FCC also decided at the last minute to allow Starlink into the auction – even those nobody knew at that time the speeds that could be delivered. The FCC really goofed up the technology issue by allowing some WISPs to bid and grab major winnings in the auction by promising to be able to deliver gigabit speeds with fixed wireless technology – a technology that doesn’t exist for a rural setting.
We recently saw the technology neutrality issue rear its head again in a big way. As the Senate was crafting legislation for a major infrastructure program, the original draft language included a requirement that any technologies built with the money should be able to immediately deliver speeds of 100/100 Mbps. That requirement would have locked out fixed wireless and cable companies from the funding – and likely also satellite companies. In backroom wrangling (meaning pressure from the big ISPs), the final legislation lowered that threshold to 100/20 Mbps.
The reason that Ali says that this is a policy failure is that the broadband policymakers are refusing to acknowledge the well-known fact that the need for broadband speeds continues to increase year after year. We just went through a miserable pandemic year where millions of homes struggled with inadequate upload broadband speeds, and yet the technology neutrality canard was rolled out yet again to justify building technologies that will be inadequate almost as soon as they are built. I would argue that the FCC has an obligation to choose technology winners and losers and shouldn’t waste federal broadband money on technologies that have no long-term legs. The decision by regulators and legislators to allow grant funding for slower technology means that the speed that current ISPs can deliver is being given priority over the speed people need.