By Ethan Green, Senior Manager for SVO and Policy, EveryoneOn
After months of spectacle and promises of a plan which would specify rural broadband as a priority line item, the President’s infrastructure bill now includes rural broadband as merely an ‘eligible criteria’ for investment. This lack of prioritization of rural broadband infrastructure signals a lack of support on the part of this administration for providing internet access for those most in need.
According to the American Community Survey, more than 60 million people are living without internet access at home in the United States, and an additional 36 million are under-connected, only accessing the internet through cellular data. This lack of access to a basic resource, particularly in underserved rural and urban areas, has reduced the capacity of nearly one-third of the country to fully participate in the modern economy. Reduced access to strong, consistent, high-speed internet means reduced access to healthcare, educational support, job-hunting resources, and e-commerce, not to mention limiting the capacity of underserved areas to create future-facing jobs and industries.
This situation is not to be taken lightly. Without being able to fully participate in the digital economy at a time when advancements in artificial intelligence and virtual reality are becoming more commonplace, large swaths of the population are at risk of becoming more disadvantaged as the future pulls farther away from them at an increasing rate. Furthermore, broadband infrastructure is the enabling environment that will fully unleash connected devices (the internet of things), which will expand innovation in critical areas such as smart farming and telehealth, radically altering the economic landscape of the country. With cost estimates for a full broadband buildout ranging from $13 billion to nearly $150 billion, depending on the model and the approach, a more direct and realistic investment is necessary.
The federal government’s expectation that a commitment of $200 billion will generate a more than 7x investment from both private and state-level entities is a gross overestimate at best. Although the bill directs $50 billion to be set aside for rural priorities, as well as additional funds to be distributed to states via block grants, for which broadband investments are eligible, these paltry investments will place the majority of the financial burden for any infrastructure project on cash-strapped state and local governments, and private sector investment.
While private sector investment and public-private partnerships are encouraged as a potential way to close the digital divide, the distribution of financial risk and burden must be much more equitable to remove the need for higher rates of return to compensate for the increased risk. These high rates of return place the focus on profits, not service provision, which may actually act as a deterrent to the internet being used for its intended purpose. As Brian Alexander suggests in The Atlantic, similar concerns existed at the time of the construction of the Erie Canal, where high tolls may have limited the canal from being used to increase trade. To avoid this conflict of interest, the state sold bonds to fund the creation of the canal. Similarly, to solve the problem of rural broadband infrastructure, there must be a public investment that is far more similar in size to that which will likely come from the private sector.
A full broadband buildout is necessary to ensure everyone in the United States has equal access to the opportunity offered by the internet. The significant demand must be met by a significant investment. Forcing states to prioritize limited funds without providing strong, tax-funded support, leaves states with little room to navigate and ensure their residents have the digital and physical resources they need in order to grow, thrive, and compete in the digital economy. A full infrastructure bill should ease the burden on states and the private sector to provide for their citizens and customers, not increase it.
Ethan Green is the Senior Manager for SVO and Policy at EveryoneOn. He can be reached at email@example.com.