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Recovery Act

Efficacy, Timing of Broadband Stimulus at Issue for Experts, Economists

WASHINGTON, February 11, 2009 – As the economic stimulus legislation entered conference negotiations Tuesday after Senate passage, the broadband stimulus provisions were the subject of fierce criticism by a panel of economists at the American Enterprise Institute.

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WASHINGTON, February 11, 2009 – The economic stimulus legislation entered conference negotiations Tuesday afternoon after the Senate voted 63-37 to approve its version of the massive bill.

But as lawmakers from both the House and Senate met to reconcile differences between the two chambers bills, the broadband stimulus provisions were the subject of fierce criticism by a panel of economists at the American Enterprise Institute.

The broadband package that comes out of conference will probably undergo “lots of changes” before it reaches the President’s desk, said the Brookings Institution’s Robert Crandall. And the provisions may not even be necessary, he said. Crandall cited a Pew study showing that while 55 percent of Americans have broadband service, the other 45 percent chooses not to subscribe to such services.

The technology that would be deployed by the stimulus funds, a combination of tax credits and grants, might be obsolete in a rapidly changing environment, Crandall said. In particular, Crandall was skeptical of the program’s goal of expanding access to rural areas – a practice he compared to the longstanding policy of subsidizing rural telephone service.

There is “almost no economic analysis” on whether such universal service programs work, he said, citing a Stanford University study that found higher costs for phone service in rural areas that received subsidies compared to urban business services. The results of getting more rural users on board would probably amount only to “marginal effects,” he said.

Crandall suggested that tax credits would better allow the market to determine where more broadband is needed while still encouraging build-out. “I see little reason to provide targeted subsidies for broadband services,” he said.

While broadband’s role in the economy is undisputed, New York University professor Michael Katz said it had no place in the stimulus package. Broadband deployment’s long lead time makes it inappropriate for an emergency measure, he said. “It’s a mistake [broadband] is being thrown into the bill and rushed through with no time to think about it.”

Katz noted that many companies are already building out their broadband infrastructure and questioned both the subsidies and tax credits. We shouldn’t pay companies to do what they were doing anyway, he said, adding that he doubted broadband would have any “immediate” stimulus effect of was even an appropriate stimulus measure. “There a lot higher social value programs we could be doing. This is more about lining pockets of rural telcos and rural landowners, and this sure as hell isn’t stimulus.”

But rushing legislation through Congress is nothing new, said former Clinton adviser Robert Shapiro, who referenced the USA PATRIOT Act as an example. “There is nothing peculiar to this,” he said.

But the stimulus is the “last instrument we have,” since government choices may be more influential for the market when the market is afraid to make any choices on its own, Shapiro said.

Shapiro acknowledged the stimulus programs were not something that would be appropriate in a normal downturn, or one in “the absence of a crisis.” But he was afraid that measures passed as emergency stimulus grants would quickly become permanent programs that would only benefit incumbent carriers.

But the idea of more broadband deployment is a good one, said Public Knowledge founder Gigi Sohn. Sohn hoped that the stimulus programs would help make broadband service more affordable to consumers who currently don’t see the value in it for the price. That 45 percent of Americans don’t have broadband service is a “national shame,” she said.

The stimulus programs probably not become a permanent policy, she said. But Sohn strongly advocated some kind of action to increase broadband adoption for all Americans. “We should have a policy so we’re not 15th in the world.”

Andrew Feinberg is the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

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Broadband Mapping

In Discussing ‘Broadband and the Biden Administration,’ Trump and Obama Transition Workers Praise Auctions

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Screenshot from the November 2 Broadband Breakfast Live Online webcast

November 22, 2020 – In the event that the incoming administration of President-elect Joe Biden seeks substantial funding for broadband infrastructure, there is a strong likelihood that such monies would be channeled through a reverse-auction mechanism, said panelists at the Broadband Breakfast Live Online event on November 11.

See more from Broadband Breakfast Live Online, including “Broadband and the Biden Administration, Part II,” on December 2, 2020.

In a discussion with Broadband Breakfast Editor and Publisher Drew Clark, two broadband policy experts who served on the transition teams for Donald Trump and Barack Obama, respectively, championed the role of such a mechanism as efficient and fair.

Previous attempts to run funding through other selection processes provided funds only to the well connected, claimed to Mark Jamison, research and education director at the University of Florida, and who served on then President-elect Trump’s 2016 transition team.

Places with a Democratic governor or a congressman of either party that sat on a powerful committee were funded more often compared to other regions, Jamison said.

Whether or not funding mechanisms were in fact biased in that way, both Jamison and Technology Policy Institute President Scott Wallsten both praised the transparency and economic efficiency of the Federal Communications Commission’s reverse-auction funding mechanism.

Wallsten, an economist who was involved in the transition for then President-elect Obama, and who also served on the National Broadband Plan implemented in the first year of the Obama administration, criticized the Rural Utility Service and the old funding process of Universal Service Fund. Both said under these mechanism, a lot of money is spent without good information about how such funds are awarded or distributed.

Wallsten and Jamison agreed that more data would help make broadband funding more effective, they also said that the FCC was right to move forward with its Rural Digital Opportunity Fund auction on October 29 – part of the new auction-based approach to the Universal Service Fund – despite imperfect mapping.

In part, this was because any inadequacy of mapping data can be resolved in the challenge process, said Wallsten. Additionally, it is not clear that auctions like RDOF, or the Connect American Fund auction in 2018, would have yielded better results had the FCC waited to update their maps.

Jamison and Wallston also projected how the Biden administration might tackle net neutrality, Section 230 and antitrust regulation.

Jamison said that if the Biden administration reinstitutes net neutrality, it will quickly see that that won’t work very well.

Wallsten said that if it’s reinstituted the debate will be different than in the past. A large part of net neutrality is paid prioritization where third parties can pay ISP’s to put their content “at the front of the line.” He said that the pandemic has demonstrated why no paid prioritization may be a mistake, as many people need guarantees of stable connection for their schooling and telehealth applications.

Wallsten also noted that many made doom and gloom forecasts when the Trump administration FCC removed net neutrality protections in December 2017. None of those predictions came to pass, he said.

Both also agreed that the FCC should not be involved the regulation of Section 230 of the Communications Decency Act, which protects tech platforms from liability for user-generated comments.

They also were wary of changes to the consumer welfare standard governing antitrust because, said Jamison, “If you’re not regulating for consumers, who are we regulating for?”

See “Broadband Breakfast Live Online on Wednesday, November 11: Broadband and the Biden Administration,” Broadband Breakfast

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National Broadband Plan

National Broadband Plan Has Held Up Well, With Notable Downsides, Say Authors

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Photo of Blair Levin, former executive director of the National Broadband Plan, by New America used with permission

June 29, 2020 — The National Broadband Plan has been successful, despite notable downsides, said panelists in a Federal Communications Bar Association webinar on Friday.

The plan, first released ten years ago, aimed to increase competition, provide lower-cost service to more Americans and decrease regulatory barriers to broadband rollout.

“Ten years in this space in terms of technology is remarkable,” said Rebekah Goodheart of Jenner & Block. “At the time only 15 percent of people had access… of 25 megabits… The fact that this plan was able to stand up through time shows how visionary it really was.”

“All the stuff that we’re taking for granted now are things that came out of recommendations from the plan,” she added.

Participants noted that, despite broadband access deficiencies amid the coronavirus, “overall broadband adoption rates [are] going up reasonably well right now,” said John Horrigan, Senior Fellow at the Technology Policy Institute.

But there are still significant barriers to unfettered telework capabilities, he said.

“We’re also waking up to the fact that smartphones, as useful as they are, have significant limitations for completing homework,” he said.

Ruth Milkman of Quadra Partners agreed.

“There’s a lot of stuff you can’t do on a smartphone,” she said. “It’s hard to read papers… and there are data caps, and it can be quite expensive if you try to use it in the same way that you would use a fixed wireline network.”

Blair Levin, non-resident Fellow at the Metropolitan Policy Project of the Brookings Institution, said that sections of the National Broadband Plan held up remarkably well, even ten years later.

“In the healthcare section which says, ‘We really need to utilize telehealth because someday there’ll be a pandemic’… it does look very prophetic,” he said.

Despite the proactivity of the policy, Levin said, it has certain shortcomings that the FCC should address.

“We’ve become much more aware in this society of different ways in which our institutions do not include everyone and lead to inequalities,” he said. “I would argue that absolutely needs to be a new plan… now it’s more important than ever because we recognize the importance of closing that digital divide.”

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Digital Inclusion

Authors of the 2010 National Broadband Plan Say That a ‘Refresh’ Should Not Only Be Up to FCC

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Photo of INCOMPAS policy summit panelists discussing the National Broadband Plan by Adrienne Patton

WASHINGTON, March 4, 2020 – Panelists at the INCOMPAS policy summit Tuesday looked back with fondness on the Federal Communication Commission’s National Broadband Plan that was released 10 years ago this month. They agreed that if the plan is refreshed, the FCC should not be the lone agency to lead in the changes.

The 10-year-old plan was designed to “ensure robust competition” and “maximize the benefits of broadband,” while fostering the spread of broadband across the country, said INCOMPAS General Counsel Angie Kronenberg.

New Street Research Policy Analyst Blair Levin, who led the plan’s development, called it a “three-act play.”

The first act was the hiring people. The second act was holding hearings and acquiring data. The third act was an extensive writing process, Levin said.

When asked how the United States is doing in regards to the plan, Levin said there have been great improvements and some complications.

Mattey Consulting Principal Carol Mattey who worked on the plan, said it was a “long and evolutionary process,” that often required “nitty gritty details” from complex concepts.

Technology Policy Institute Senior Fellow John Horrigan, who also worked on the plan, said that while the statistics do not show a large increase in Americans that have wireline broadband at home, smart phones and mobile devices have made a huge difference.

Even so, Horrigan admitted that for children who have to do homework at home, smart phones are not enough.

However, Horrigan said the way that policy makers understand and think about the digital divide has improved.

A decade ago, city mayors were not concerned about digital inclusion, and now that has changed, said Horrigan.

Levin disclosed his frustration with the “metrics” section of the plan. The availability of bandwidth should not hinder economic growth, said Levin. But, “fundamentally we’ve made progress,” Levin admitted.

“The regulatory process is too slow to catch up,” and legislators are hesitant to look so far in the future while also considering cost concerns, said Mattey.

Looking ahead to a possible refresh of the plan, Horrigan said the FCC should not be the sole organization reworking the document.

Levin agreed and added that broadband has changed over the past decade as well. He called broadband a “mixed bag.”

The whole federal government should be thinking about how to revive the plan and take into consideration cybersecurity and privacy, Levin advised.

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