April 17, 2024
Our nation stands at the cusp of a historic achievement. Thanks to the bipartisan leadership of Congress and the White House, in close partnership with U.S. broadband companies, we finally have within our collective sights achieving the mission-critical objective of universal connectivity. We’ve arrived at this moment because the government and the private sector are each committing tens of billions of dollars to the task and, equally important, are proceeding together under the banner of sound public policies resolutely rooted in overcoming the substantial, real-world economic hurdles that have long kept this all-important goal out of reach.
That’s why it’s unfortunate that some in the Washington press are recycling the same misleading meme-friendly arguments that risk keeping progress elusive. Rather than government and industry working and investing together to overcome economic hurdles to deployment in hard-to-reach areas, these voices embrace ‘magical realism.’ They make the tendentious case that if policymakers refuse to violate the very law that created the Broadband Equity Access and Deployment (BEAD) program – by bowing to calls for government price controls – then the program will fail.
These arguments demonstrate a breathtaking misunderstanding of how BEAD was designed by Congress and built by the Biden Administration to get (and keep) the nation connected. It also defies basic laws of cause-and-effect economics. So, rather than spread existential gloom, I’d like to share why I believe this program, and the public-private partnership it advances, can deliver a monumental achievement to our nation.
Broadband providers are deploying tens of billions of dollars of their own capital annually alongside federal funds to help close the final infrastructure gaps. Since 1996, they have invested more than $2 trillion in network infrastructure. More than $102 billion was invested in 2022 alone.
BEAD is designed for a specific, targeted purpose – to help fund partnerships between states and experienced broadband providers to connect communities that are otherwise uneconomic to serve. Those dollars from private investment do not make sense absent supplemental government funding. These are mostly rural areas where sparse populations are spread across vast geographies.
In creating the program, Congress required participating providers to offer low-cost service options, but it purposefully prohibited rate regulation. The Biden Administration followed suit in standing up the implementation by calling for a public and private sector partnership that together would overcome financial barriers to deployment, something that cannot be attained by wholly untethering prices from the economic realities of providing service. Indeed, it will not be the failure to set these unworkable rates that will be the program’s undoing, rather doing so will be. If we do not use this essential funding to build economically viable, sustainable networks, our effort will be for naught.
Equally important, these bipartisan leaders understood that while BEAD funding would help support the initial network build, this hard-won progress could quickly be squandered if policymakers set prices so low that providers were unable to sustainably deliver high-speed connectivity over BEAD-funded networks.
It is worth noting broadband prices have been among the most inflation-resistant of all consumer bills. While the cost of groceries, health care, and other essentials have soared, the most recent broadband pricing data documents an 18% year-over-year price drop in providers’ most popular tier of broadband service.
For their part, while addressing gaps in broadband availability through the BEAD, Congress and the Administration also worked together to ensure that low-income families could get connected by creating the Affordable Connectivity Program (ACP). ACP was designed to work hand in hand with the BEAD program, by supplementing broadband bills for qualifying low-income families. Some 23 million American households now rely on the program, yet it is set to run out of funds next month. If we are serious about universal connectivity, Congress should start here by funding this commitment made to these consumers less than three short years ago.
Broadband providers are all in and are committed to BEAD’s success and are working constructively with our federal and state partners to connect our nation finally, fully, and forever. This goal is within our grasp. But it requires us to stand firm on the approach we embraced together. If our shared aim is real-world results, then our policies must be rigorously rooted in economic reality. Wishful thinking didn’t get the job done. Working together with sound and sustainable policies can and will.