The Senate’s $1 trillion bipartisan infrastructure plan includes a $65 billion investment in broadband that the White House said will “deliver reliable, affordable, high-speed internet to every household.”
It may not actually achieve that, but it’s a major step in that direction. The broadband funding is a “great down payment” on the Biden administration’s far-reaching goals of connecting all Americans and making internet more affordable, said Matt Wood, a broadband policy expert at the consumer advocacy group Free Press. Critically important is $14 billion aimed at helping low-income Americans pay for service.
The “digital divide” – the persistent U.S. gap between the broadband haves and have-nots – became glaringly obvious during the pandemic as school, work and health care shifted online. Tens of millions either don’t have internet access or, if they do have access to a phone or cable company, can’t afford to pay for it.
More radical industry changes laid out in the Biden administration’s original $100 billion plan, such as promoting alternatives to the dominant phone and cable industries and hinting at price regulation, didn’t survive bipartisan negotiations over a bill that had to attract Republican support. Among the bill’s big winners are those same internet service providers.
The Senate passed the $1 trillion infrastructure bill Tuesday, 69-30, with support from both Democrats and Republicans. The House is likely to consider it in September.
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The digital divide
The Federal Communications Commission said about 14 million Americans don’t have access to broadband at the speeds necessary to work and study online – 25 megabits per second downloads and 3 mbps uploads – but acknowledged that its maps are faulty.
Phone and cable companies don’t have incentives to build internet infrastructure in rural areas, where customers are sparser and they may not make their money back. That’s traditionally where government subsidies to the industry have come into play: about $47 billion to rural internet from 2009 through 2017 and an additional $20 billion for rural broadband over the next decade and $9 billion for high-speed wireless internet called 5G in sparsely populated regions.
There are tens of millions of people who have access to the internet and just don’t sign up, most often because they can’t afford it, in cities and remote areas. The National Urban League estimated that number at 30 million households.
Focusing on affordability
The Senate bill would provide about $14 billion toward a $30 monthly benefit to help low-income people pay for internet, extending a pandemic-era emergency program.
“What makes this historic is the focus on affordability,” said Jenna Leventoff of Public Knowledge, which advocates for more funding for broadband. The bill, should it become law, is “going to help a lot of people that were otherwise unable to connect.”
A program known as Lifeline aimed to help solve the affordability issue. It provides $9.25 a month, which doesn’t go far for internet plans. Republicans said the program has fraud and abuse problems.
Industry groups have advocated for a permanent broadband benefit, saying participating broadband companies would gain customers. The benefit would be “a plus for all ISPs,” said Evercore ISI analyst Vijay Jayant.
The legislation would direct the FCC to create rules intended to protect consumers from companies that could push them to sign up for more expensive services in connection with the benefit and against other “unjust and unreasonable” practices.
Money for networks
The bill would provide about $42 billion in grants to states, who would funnel funds to ISPs to expand networks where people don’t have good internet service. Companies that take this money would have to offer a low-cost service option. Government regulators would approve the price of that service.
The bill would require that internet projects come with minimum speeds of 100 megabits per second on downloads and 20 for uploads, a big step up from current requirements.
Cable companies are happy that the funding would be primarily dedicated to areas that don’t have broadband service. Some advocates had hoped the government would fund competition to cable, so people had more choices.
The Biden administration’s initial plan promised to promote local government networks, cooperatives and nonprofit groups as alternatives to for-profit phone and cable companies. Under the Senate’s plan, such groups aren’t prioritized, but they could still get money from states for networks. The telecom industry has lobbied against municipal networks; about 20 states restrict them.
Senate negotiators left loopholes in language around an attempt to end “digital redlining” – when telecom companies provide upgraded internet service in wealthier parts of town but leave others without good service. The bill says the FCC must create rules to stop this practice, “insofar as technically and economically feasible.” The reason telecoms leave some areas with subpar service is because those neighborhoods are not as profitable, Leventoff said.
How strong these requirements are would depend on what the FCC does. The agency is hamstrung. The White House has not nominated a permanent chair, and the FCC is missing a third Democratic commissioner that would allow it to take on controversial items.
Industry groups and proponents of expanding internet access said the legislation should help get more people online.
“This bill will not increase choice and lower prices for everyone. But that’s not the right measure,” Wood said. “It will make real, high-speed internet far more affordable for millions of people who today cannot afford it, and it will make faster networks available to millions more. That’s a big deal.”