Experts Concerned About Biden’s Costly Broadband Infrastructure Proposals
“On the broadband deployment side, an R Street blog post details the potential hazards with the Biden infrastructure proposals. Most worrisome, the plan appears to call for a favoritism toward municipally run networks, despite significant potential problems with these networks. Further, the plan also calls for future proofing broadband networks, though this essentially means fiber networks with symmetrical 100 megabits per second (Mbps) upload and download speeds. These proposals would harm competition and innovation, leading to lower private investment in broadband infrastructure. Instead, Congress should continue the streamlining of local deployment processes, as local barriers such as access to public rights-of-way and replacing utility poles can often serve as a significant barrier to deployment.
“On the broadband adoption side, the Biden plan also alluded to potential price controls, with general sentiment being that broadband prices are too high. However, data suggests prices are lower and speeds are higher than ever before. To the extent that low-income consumers need additional support to afford broadband connectivity, Congress should instead look to potential reforms to the Lifeline program that would deliver the benefit directly to the consumers, as well as update the funding mechanism to bring stability to the program.” – R Street Letter to the Communications and Technology Subcommittee Republican Leader Bob Latta and Chairman Mike Doyle
“Under the American Jobs Plan, the Biden administration would allocate $100 billion to build high-speed broadband. The proposal would distribute funding with a preference for municipal broadband initiatives and the construction of “future proof” infrastructure. It also seeks to reduce the cost of broadband internet to encourage adoption, though the means for cost mitigation remain unclear. Unfortunately, this plan quickly becomes counterproductive. Municipal broadband projects often ignore the key challenge: the equilibrium number of firms. By adding an additional competitor that can cross-subsidize broadband provisions, municipal networks often disrupt the market and freeze private investment. Municipal broadband might make sense in communities that truly lack a business case for the deployment of private networks, but the plan would also make these communities more difficult to identify by distorting the definition of served.” – Jeffrey Westling, Resident Fellow, Technology & Innovation, R Street Institute via Twitter