Future Fibre: Biden has a broadband strategy

Is the United States about to seriously tackle the digital divide?

In the past week, the Biden administration has announced an incredibly ambitions plan to fund, invest, and repair infrastructure across the United States. Most notable within this announcement, are plans to fund a massive upgrade of community based broadband infrastructure.

More on that in a moment, but first, let’s appreciate the potential context.

Amid steady progress with coronavirus vaccinations, the U.S. economy is gathering so much steam that its gains will not stay at home. Demand for goods and services this year is expected to spill well beyond U.S. borders, making the United States the largest single contributor to global growth for the first time since 2005, according to Oxford Economics.

The U.S. ascent ends — at least for now — China’s long reign as the principal engine powering the $90 trillion global economy.

Free spending by the Biden administration — coupled with the Federal Reserve’s ultralow interest rates — is driving the nascent U.S. boom and lifting other countries, where governments have not responded as aggressively to the pandemic. As Americans spent their $600government stimulus checks in January on furniture, laptops and clothing, the U.S. imported a record $221 billion worth of goods. And that was before a round of $1,400 checks in March.

“We are ahead of the world,” said Kristin Forbes, who was one of President George W. Bush’s White House economic advisers. “And a meaningful share of the stimulus is likely to leak abroad.”

American hubris and exceptionalism aside, it is worth noting the parallel, that China’s dominance over the global economy was the direct result of their aggressive currency/monetary policies, and now the US is resorting to similar tactics.

While I remain bearish on the pandemic, and believe the US is underestimating the coming impact of coronavirus variants, there is reason to believe, that if the Biden administration is successful, we’re about to see an unprecedented era of government and infrastructure spending. Although that is a big if.

Yet investing in broadband seems like a no brainer, when you recognize that it has become an essential driver and enabler of economic and social activity.

This plan is not only massive in terms of cost, but it also builds upon a range of existing and successful policy initiatives that have been used in a range of jurisdictions.

Municipally owned networks, nonprofits, and cooperatives would play a major role in the expansion pitched by Biden. The broadband industry and Republicans have been fighting city-owned networks for years, and nearly 20 states have laws that restrict the growth of municipal broadband. While Democrats have proposed eliminating those state laws, congressional Republicans last month proposed a nationwide ban on municipal broadband.

Biden's plan "prioritizes support for broadband networks owned, operated by, or affiliated with local governments, nonprofits, and cooperatives—providers with less pressure to turn profits and with a commitment to serving entire communities," the White House fact sheet said.

Biden's plan also seeks to "promote price transparency and competition among internet providers, including by lifting barriers that prevent municipally owned or affiliated providers and rural electric co-ops from competing on an even playing field with private providers, and requiring internet providers to clearly disclose the prices they charge." The "lifting barriers" part of that statement could be a reference to overturning state laws that restrict municipal broadband, but the fact sheet didn't get more specific on that point.

At this point we’re still just talking about vague proposals, but broadband politics is a hot button issue in many rural communities, and it tends to transcend partisanship, even if the solutions vary depending on where you are on the political spectrum.

The Fact Sheet that the Whitehouse released has this specific paragraph that was referred to in the article above:

Build high-speed broadband infrastructure to reach 100 percent coverage. The President’s plan prioritizes building “future proof” broadband infrastructure in unserved and underserved areas so that we finally reach 100 percent high-speed broadband coverage. It also prioritizes support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits and with a commitment to serving entire communities. Moreover, it ensures funds are set aside for infrastructure on tribal lands and that tribal nations are consulted in program administration. Along the way, it will create good-paying jobs with labor protections and the right to organize and bargain collectively.

This is a political statement, and one that anticipates a coming political battle, and frames these policies in a manner that attempts to rally communities, in some cases against incumbent providers.

The Biden administration, quite rightly, anticipates a lot of lobbying and money spent against these preliminary proposals.

Why it matters: Democrats on the Hill will have to overcome industry lobbying and Republican opposition to make this part of Biden's multi-trillion-dollar infrastructure program a reality.

Driving the news: Some key details of the broadband measures in the American Jobs Plan have internet service providers up in arms.

  1. The plan prioritizes spending for government-run or nonprofit networks. Such providers have "less pressure to turn profits" and "a commitment to serving entire communities," according to a White House fact sheet.

  2. Biden's plan also prioritizes "future-proof" infrastructure — which providers fear means the government will fund new fiber networks in areas where broadband companies already have customers.

  3. The plan calls for making internet service more affordable by finding ways to bring prices down, instead of giving government subsidies to service providers so they can charge some consumers less.

If the stakes weren’t so high, this coming battle could be regarded as hilarious, which on some level it will be. Yet absurdities that prevent people from getting proper fibre connectivity is not in the end all that amusing.

What they're saying: "I thought that it was really out of character the degree to which they embraced this sort of unfounded faith in government-owned networks to own, build and run this program," Michael Powell, CEO of cable trade group NCTA and a former Republican chairman of the Federal Communications Commission, told Axios.

  • "The idea that the private sector and profit incentives are intrinsically unsuited to do the job" is "surprisingly Soviet," Powell added.

The article above included a note about positive statements coming from Rural and Wireless ISPs:

A group that represents small, rural broadband providers issued a far more positive statement about the Biden plan. "No infrastructure package would be complete without digital infrastructure, and on behalf of NTCA's members, I want to thank President Biden for recognizing the importance of broadband access in his new American Jobs Plan," said Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association.

"We need to aim high and invest in efficient and scalable technologies like fiber to meet the needs not only of today's consumers but also tomorrow's," Bloomfield said. By contrast, AT&T is lobbying against government-funded fiber networks in rural areas despite admitting that fiber is the most "future-proof" broadband technology.

The Wireless Internet Service Providers Association (WISPA), another lobby group representing small ISPs, issued a similarly positive statement.

Many researchers and organizations that we’ve been following as part of our own research in this Future Fibre series have responded positively to this announcement.

The following statement can be attributed to Joshua Stager, deputy director for broadband and competition policy at New America’s Open Technology Institute:

“President Biden is absolutely right—Americans pay too much for the internet. Our research has consistently shown that the U.S. is in the grips of a broadband affordability crisis. Compared to consumers abroad, Americans pay more for less and struggle with hidden fees and opaque pricing. The president’s broadband infrastructure plan wisely targets affordability as a major cause of the digital divide. At a minimum, we need price transparency so consumers understand what they are paying for.

“The president’s plan is also right to target competition as a major problem in our nation’s broadband infrastructure. The broadband market is an oligopoly dominated by just four companies—AT&T, Comcast, Verizon, and Charter—leading to higher prices and network decay. The president’s proposal to legalize municipal and community-owned networks is a good start. Our research shows these networks are some of the most affordable and competitive in the United States. Municipal networks should be legal everywhere, and the big providers should have to compete with them.”

These are early days, and this is just an announcement as part of a larger plan that is arguably still in its infancy. There’s no reason to believe as yet that anything has changed, or that anything will happen.

However this does represent a seismic shift in how broadband is dealt with politically, and how the digital divide is addressed by public policy.

Just in providing a sketch outline of intentions, the Biden administration has legitimized a range of policies that were previously either low profile or not that well known outside of broadband circles.

Now as this battle for broadband starts to take off, we’ll have an opportunity to public discuss and debate why affordable if not free broadband for all is one of the most important economic and social policies of our contemporary era.

Finally, it’s also worth noting that the White House is not alone in moving these ideas forward. Previous to their announcement there was already movement underway in Congress to see these measures move forward.

Clyburn, who created the Rural Broadband Task Force, has said he has lined up support in the House and Senate for his bill.

“Internet for All is more than a goal, it’s a moral imperative," said Chip Pickering, CEO of INCOMPAS and himself a former member of the House. "Together our nation can and must, extend the power of faster more affordable internet access to every American family. The “Internet for All” legislation will create jobs today and make a bold investment in a better future filled with more competition, innovation and opportunity for all."

We’ll keep a close eye on these developments and the larger debate around broadband outside of the US as well. #metaviews

“Future Fibre” is a recurring series in the Metaviews newsletter where we share some of the research, other models, news, and ideas around community based connectivity. While the series is published via our newsletter, it’s also available via news.metaviews.ca/tag/fibre, so you can share the entire series with interested parties.

The series is sponsored by our friends at EasyDNS:

I’ve been an EasyDNS customer for almost 20 years (and I know a number of you are as well based on my recommendation). Mark Jeftovic the co-founder and CEO is a long time friend and Metaviews subscriber. EasyDNS is one of the best service providers on the Internet, and Mark ensures his customers have the benefits of the latest and most secure technology.

Mark also writes a smart newsletter called #AxisofEasy and published a fascinating book called “Unassailable”, which we reviewed. I’m thrilled that Mark shares my belief in the potential for micro-ISPs and is sponsoring this series as a result.

Metaviews is also now a partner in the AxisofEasy.com website that aggregates and amplifies content from us, Mark, and Charles Hugh Smith.