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Johnny Kampis: New ISP Taxes Will Not Help America Build Back Better

Increasing taxes on internet service providers would be counterproductive in the quest to close the digital divide.

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The author of this Expert Opinion is Johnny Kampis, director of telecom policy for the Taxpayers Protection Alliance.

As Senate Democrats look to resurrect President Joe Biden’s Build Back Better legislation, they should quickly squash the idea of new taxes on internet service providers that would be counterproductive to closing the digital divide.

Biden said in his State of the Union address that he wants to “provide affordable high-speed internet for every American—urban, suburban, rural, and tribal communities.” Increasing costs on ISPs would only ensure that less money would be available to achieve the president’s goal.

BBB started as a $1.7 trillion spending plan that was rejected by all Senate Republicans and needed the support of all Democrats to pass the chamber. But moderate Sen. Joe Manchin, D-West Virginia, rejected the legislation last year, leading to progressives scrambling to reconfigure Biden’s signature bill.

Funding proposals being considered in a new BBB bill include the book income minimum tax, as well as a limit on interest deductions.

The limit on interest deductions would apply to a number of capital-intensive industries, including internet providers. Permitting telecoms to deduct interest payments to lower their tax burdens increases the amount of money available for broadband investment, which is capital intensive.

For example, it is estimated that nearly $80 billion was invested by the private sector for broadband deployment in 2020, according to U.S. Telecom, The Broadband Association. In fact, more than $1 trillion in private sector funding has been spent since 1995. Limiting these deductions would also lower the level of investment in broadband infrastructure. That would be another loss for the concept of broadband for every American.

Slowing broadband deployment and distorting the value of future spectrum licenses

The book income tax would place a retroactive tax on past spectrum purchases and increase taxes on future spectrum purchases. As Michael Santorelli, director of the Advanced Communications Law & Policy Institute at New York Law School, wrote in Forbes, “Spectrum is the lifeblood of wireless networks, so any increase in taxes associated with spectrum purchases would likely slow 5G deployment.”

The Tax Foundation said such a tax would likely “distort the prices companies are willing to pay for future spectrum licenses.”

Meredith Attwell Baker, president and CEO of CTIA, which represents the U.S. wireless industry, calls the spectrum tax the “5G tax trap.”

She noted in a recent op-ed that wireless providers paid the government more than $100 billion in new spectrum licenses in just the past year. The results have been that 5G networks are being created about twice as fast as 4G networks were and already cover about 90 percent of the country.

Baker said the new proposal would no longer permit wireless companies from writing off the costs associated with acquiring spectrum while still allowing other companies to write off other costs of investments made while building out broadband infrastructure.

“That puts wireless providers at a significant disadvantage at a time when mobile broadband is proving vital to getting and keeping Americans connected,” she wrote.

The U.S. leads the world in 5G development, with speeds that rival cable and fiber. But China continues to nip at the heels of the United States. Increasing taxes on providers while China subsidizes 5G infrastructure could easily flip the script.

Fortunately, the BBB legislation doesn’t seem to be moving forward, with Sen. Mark Warner, D-Virginia, telling Vox last week that he didn’t “have the foggiest idea” of how to advance the bill.

But if BBB arises again, Democrats should reconsider tax proposals that would only harm the effort to close the digital divide.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

Digital Inclusion

W. Antoni Sinkfield: To Succeed in 21st Century, Communities Need to Get Connected Now

One of the primary responsibilities of being a faith leader is to listen to your community and understand its problems.

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The author of this Expert Opinion is Reverend W. Antoni Sinkfield, Associate Dean for Community Life at Wesley Theological Seminary.

One of the primary responsibilities of being a faith leader is to listen to your community, understand its problems, and provide support in challenging times. Particularly during the pandemic, it has been hard not to notice that my parishioners, and folks across the country, are divided into two groups: those with access to the internet, and those without.

In 2022, digital inclusion is still something we strive for in poor and rural areas throughout America. The lack of reliable internet access is an enormous disadvantage to so many people in all facets of their lives.

To fully participate in today’s society, all people, no matter who they are and no matter where they live, must have access to the internet. Think of the remote learning every child had to experience when schools were closed, and the challenges that families faced when they didn’t have access to a quality connection.

It’s a question of plain fairness.

Politicians have been talking for decades about bringing high-speed internet access to everyone, however many families continue to be left behind. More than 42 million people across the country lack affordable, reliable broadband connections, and as many as 120 million people who cannot get online are stuck with slow service that does not allow them to take advantage of everything the internet has to offer.

People of color are disproportionately affected by lack of broadband access

Lack of broadband disproportionately affects communities of color, as well: 35 percent of Americans of Latino descent and 29 percent of African-Americans do not have a broadband connection at home.

Every person in rural towns, urban neighborhoods, and tribal communities needs and deserves equal and full economic and educational opportunities. Studies show that students without home access to the internet are less likely to attend college and face a digital skills gap equivalent to three years’ worth of schooling. Small businesses, which are the cornerstone of rural and urban communities alike, need broadband to reach their customers and provide the service they expect.

Simply put, having access to the internet in every community is vital to its ability to succeed in the 21st century.

Fortunately, we have an opportunity to take major steps toward a solution. Last year, Congress passed President Biden’s Infrastructure Investment and Jobs Act, which provides $65 billion to expand broadband access and affordability. It is essential that we use this money to connect as many unserved and underserved communities as we can – and as quickly as we can.

Different places need different options to bridge the digital divide

As we bridge the digital divide, we must listen to those who have been left behind and make sure that we deploy solutions that fit their needs. Different places need different options – so it’s important that all voices are heard, and the technology that works best for the community is made readily available.

All people need access to broadband to learn, work, shop, pay bills, and get efficient healthcare.

When I talk to my parishioners, they speak about how much of their lives have transitioned online and are frustrated about not having reliable access. They do not care about the nuances of how we bring broadband to everyone. They just want to have it now – and understandably so.

This means that we must explore all solutions possible to provide high-speed broadband with the connection and support they need, when they need it, regardless of where they live.

Now is the time to meet those struggling where they are, stop dreaming about bridging the divide, and just get it done. Our government has a rare opportunity to fix an enormous problem, using money already approved for the purpose. Let’s make sure they do so in a manner that works for the communities they’re trying to help.

Rev. W. Antoni Sinkfield, Ph.D., serves as Associate Dean for Community Life at Wesley Theological Seminary, and is an ordained Itinerate Elder in the African Methodist Episcopal Church. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband Mapping & Data

Bryan Darr: Federal Broadband Funding is Available for Local Governments

Ookla can help your community get the funding you need to provide access for all to the digital economy.

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The author of this Expert Opinion is Bryan Darr, vice president of Smart Communities at Ookla.

Local governments, the clock is ticking.

The Infrastructure Investment and Jobs Act set billions of dollars out on the infrastructure buffet table for local governments in the United States and there are more guests invited to the party than ever before.

This funding is almost certainly a once-in-a-lifetime opportunity to connect your community and provide access for all to the digital economy. The question is: will you be at the front or the back of the line?

Ookla can help you. This article is designed to give you the information you need to get started on the path toward getting the funding you need for your communities.

Look to your state for funding

Historically, broadband funding has had a very top-down approach.

The Federal Communications Commission has held almost all the power to determine where federal broadband infrastructure dollars have been spent. But for the first time, state governments will have an active role in guiding these decisions.

The Infrastructure Investment and Jobs Act directs $65 billion to improving broadband connectivity across the U.S., with $42.45 billion earmarked for building new infrastructure.

Once the initial FCC map has been released, each state that has declared their intent to participate through National Telecommunications and Information Administration will be provided a minimum $100 million to get the process started (U.S. territories will split an additional $100 million).

Much of the remaining $22 billion will target affordability, but more on that later.

The race for resources will be officially off and running.

Following this initial disbursement, there will be roughly $37 billion more to be awarded from the IIJA alone.

Many states are still sitting on billions of dollars from the American Rescue Plan Acts and broadband is an allowable expenditure for these remaining stimulus dollars.

Add to that the long running connectivity programs such as Connect America Fund, Rural Digital Opportunity Fund, Mobility Fund and the upcoming Rural 5G Fund, and all those programs combined approach $100 billion over the next decade.

Plan ahead to increase your competitiveness

Past programs have provided funding without setting proper expectations on results. More emphasis is now being placed on planning.

With a focus on estimated cost per service address, network design takes a front seat to ensure these resources are spent efficiently and state officials will be allowed to use up to five percent of this for mapping, designing, and cost estimation.

Most states are already planning, or already building, their own broadband availability maps. But if you have connectivity issues in your community, it’s time to make it known to those who will be responsible for directing funds and deciding which communities will see investment and which will not.

Ookla helped Loudoun County, Virginia secure $17 million

We have experience helping local governments navigate this challenging planning process.

When FCC Form 477 broadband availability data showed that nearly 100% of Loudoun residents have access to what the FCC defines as broadband (25 Megabits per second (Mbps) download, 3 Mbps upload), this was inconsistent with the connectivity experiences of county residents.

So the Loudoun Broadband Alliance chose to use Ookla Speedtest Intelligence® to create an accurate and reliable broadband access mapping methodology using real-world network performance data.

With this data, LBA identified a large number of unserved households in contrast to FCC data which showed them as served. Loudoun County was subsequently awarded over $17 million of funding to help eliminate the broadband gap.

Keep in mind that the maps will never be finished. They will change and evolve as the networks in your area grow.

Funded projects will need to be monitored for compliance and older networks will need to be watched for signs of deterioration. Everyone will need to keep an eye on progress, measure successes, and have the data to act early when projects go off track.

Acadiana, Louisiana used Speedtest data to win $30 million

With Speedtest data, the Acadiana Planning Commission was able to successfully challenge FCC maps on over 900 out of approximately 1,000 census blocks.

The APC applied for funding through the NTIA Broadband Infrastructure Program, which made $288 million in funding available to help close the digital divide in the U.S.. There were over 230 applicants, and only 13 grants were awarded.

Vice President Kamala Harris visited Acadiana in March to announce that the APC had been awarded a $30 million grant that will fund high-speed internet in 11 rural Acadiana communities.

Think big! Broadband funding is available for more than just infrastructure

Accessibility to broadband requires at least four components: infrastructure, affordability, equipment, and knowledge. The lack of any one of these means an individual does not have access to today’s digital economy.

Much of the focus has been on the lack of infrastructure in many rural communities, but infrastructure is the absolutely essential piece for anyone in any community to get connected.

The second component, affordability, often drives the last two requirements as people who cannot afford internet service often cannot afford the necessary equipment and, therefore, are less likely to have developed the knowledge to use it.

Tracking both of these two primary elements is key to understanding the digital divide.

You might qualify for funding in more than one of these four areas. For example, over $14 billion in a new Affordable Connectivity Program is included in the broadband portion of the IIJA.

Remaining funds include $2.75 billion for the Digital Equity Grant Program and the $2 billion Tribal Broadband Connectivity Program, as well as two more programs that will assist the USDA improve the internet in agricultural communities.

Agencies and local governments should work together

Cities should be coordinating with counties and other government entities within the same region — but someone needs to be in charge.

If your local government does not have an individual charged with coordinating all these efforts, there is bound to be duplication of efforts, wasted resources, stagnation of ideas, or all of the above.

Whether this person reports directly to the chief technology officer, chief information officer, mayor, or city manager, their purpose is to understand what all departments are doing in the space and coordinate discussions, grant opportunities, and overlapping initiatives to make sure that departments aren’t working at cross purposes.

Non-profits, community activists, and local corporations all have a stake in the success of these efforts.

Traffic problems won’t suddenly end at the municipal boundary. Improving traffic on one side of the line may create more problems on the other side. Working together with your neighbors is just as important as working with internal departments. The same can be said of both fixed and wireless broadband infrastructure.

Dig-once projects will score extra points in the competition to have projects selected.

Broadband is only part of the $1.2 billion infrastructure law. Roads, bridges, ports, and rail have billions of dedicated dollars as well.

Digging a new trench for a clean water system? Coordinate with the project to include conduit and fiber and your efficient use of taxpayer funds will likely be rewarded.

Consider funding for multiple technologies

As great as it might be to provide every service address in the country with a fiber connection, it may not make economic sense in some places.

But an important detail was clearly stated in the legislation that recognizes a technology neutral stance on solutions.

The rules are not yet complete on how the FCC and NTIA will award the IIJA funds and contend with challenges to their findings, but there are certainly far fewer restrictions on the ARPA funds that are already disbursed to the states. Many connectivity projects are already underway whether through infrastructure development, equipment distribution, or subsidies for affordable service.

Wireless services can get people connected much faster and there are several forms.

Traditional mobile operators are rolling out 5G and Fixed Wireless Access in some areas that can directly compete with traditional fixed services. Wireless internet service providers have launched coverage to homes and businesses that previously had satellite as their only option.

Some municipalities and school systems have launched private 4G LTE networks to connect underserved areas in their communities. And municipal Wi-Fi can still be an important part of an overall solution.

A portion of families may never find subscribing to a fixed network practical, but wireless services allow for easier movement and some don’t even require a residence. Understanding wireless network availability and performance across your jurisdiction is just as important as planning a fiber network.

And here’s a bonus — cellular and other transmission sites need fiber for any new 5G cell site. So if you know where your wireless networks need additional infrastructure, you can plan for places in the network to offer them accessible fiber connections.

If your state still has ARPA funds available, you still have an opportunity to make improvements and learn more about connectivity issues so you are better able to make your case for the IIJA funds as they begin to flow.

Ookla can provide you with the data you need to be competitive for federal funding

It has been said for years that broadband is the fourth utility.

Local governments have spent a lot of their resources managing the first three: water, gas, and electricity.

If any of those become unavailable, even for a brief period of time, their citizens will make their unhappiness known. Resiliency of these services will play a part in how elected officials are judged, whether the local government supplies these services or just manages an external provider.

If you serve in local government, you should anticipate the same expectations going forward for broadband in your community.

The internet has become vital to the way we live our lives, and access to it dictates much of our success both as residents and businesses. Recognizing connectivity as a critical service may have been a consequence of a pandemic, but that change in thinking is here to stay.

That’s why Ookla is here to help you learn more about the connectivity in your area.

We’ve already helped local governments secure tens of millions of dollars in federal funding in Loudoun County, Virginia and Acadiana, Louisiana. We are also working with state broadband offices as well as municipalities to help them gain visibility into network availability and performance.

If you want your community to take advantage of the billions pouring into improving connectivity, get in line before it’s too late.

Drawn from billions of Speedtest results, Ookla’s Broadband Performance Dataset provides governments, regulators, ISPs, and mobile operators with insights about the state of fixed networks and broadband accessibility. The Broadband Performance Dataset helps you identify unserved and underserved areas, prioritize investment opportunities to improve access to broadband, challenge funding decisions, and secure grants.

To learn more about the Broadband Performance Dataset, Speedtest Intelligence, and other solutions for your state and/or local governments, please contact us.

Bryan Darr is the Vice President of Smart Communities at Ookla. He coordinates Ookla’s outreach to local, state and federal governments and serves on CTIA’s Smart Cities Business & Technology Working Group. This piece was first published on Ookla’s web site, and is reprinted with permission.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Patty Judge: FCC Pole Attachments Proceeding Will Help Boost Connectivity Across America

The FCC recognizes pole access for the barrier that it is.

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The author of this Expert Opinion is Patty Judge, former Lieutenant Governor of Iowa and co-founder of Focus on Rural America.

My home state of Iowa ranks 45th in the country when it comes to the share of people with access to broadband.

In fact, around one-third of our counties are labeled as “broadband deserts” where reliable, high-speed internet is “rarely” offered.

In real terms, that means hundreds of thousands of our friends, family members, and neighbors still cannot find jobs online, access remote learning opportunities, leverage precision agriculture technology, speak to a doctor over video conference, or simply connect with loved ones online.

Thanks to new investments, that could soon change, but only if policymakers act quickly to clear away long-standing obstacles, including those raised on the recent Broadband Breakfast Live panel entitled, “New Wires on Old Poles: Will the FCC Change Rules for Attachments?

Over the past few years, lawmakers at both the federal and state levels have sought to tackle the digital divide once and for all. For example, this past January, our state announced an additional $200 million in grants for broadband projects across Iowa, bringing the total award amount to $880 million just within the past three years.

On the national level, federal lawmakers allocated $65 billion specifically for broadband within the bipartisan infrastructure bill.

The resources are there to meet the challenge, but only if crucial funding is used in the most effective and efficient way to guarantee that unserved homes, businesses, and other anchor institutions in our rural communities receive access to reliable, high-speed internet as quickly as possible.

This means eliminating barriers that stand in the way of swift broadband deployment, especially when it comes to accessing millions of utility poles that carry broadband into remote areas.

The outdated, costly, and time-consuming process of attaching broadband infrastructure to utility poles often leads to lengthy disputes and investment-constraining costs that can delay or even halt deployment efforts altogether.

It may not immediately be clear how and why poles – owned by utility companies, electric cooperatives  or municipalities – play such a significant role in the broadband deployment process, but they are essential.

To bring unserved households high-speed internet connectivity, service providers must attach wires to these poles. In rural communities, including those in Iowa, broadband providers may have to connect cables to upwards of 10 or more poles just to reach one house or small business.

Adding to this challenge, outdated or damaged poles may need to be replaced before cables can be attached. In practical terms, as many as one in 12 of these poles might need to be replaced for buildout to proceed.

That doesn’t happen swiftly unless pole owners are ready to do their part.

A study by Connect The Future found that for every month of delayed expansion due to pole-related hold ups, Americans forego somewhere between $491 million and $1.86 billion in economic gains.

It is encouraging to see the Federal Communications Commission propose new action on pole attachment reform.

This proceeding demonstrates that the FCC, under Chairwoman Jessica Rosenworcel’s leadership, recognizes pole access as a significant barrier to broadband deployment in unserved areas and understands the need to ensure a fast and fair process for attachments, replacements, and dispute resolution – before needless expenses and delays dilute the impact of new federal and state funds devoted to broadband deployment.

Rural Iowans need access to broadband now and utility poles attachment reforms are essential to making that vision a reality.

It’s time to reform outdated pole attachment rules, specifically by guaranteeing a fair division of costs between attachers and owners for poles that need replacing, and setting a reasonable timetable for the resolution of disputes. Without these long overdue reforms, millions across the country will continue to fall behind.

Patty Judge is the former Lieutenant Governor of Iowa (2007-11) and the co-founder of Focus on Rural America. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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