Year in Review: Key Developments in Digital Infrastructure with Ramifications for Next Year

WASHINGTON, December 28, 2021 – Broadband Breakfast is kicking off its review of developments from this year with what we view as the key developments in the world of digital infrastructure systems.

The past 12 months saw the inauguration of President Joe Biden and the execution of several policy priorities, which lawmakers have spoken about for years.

The year represented a monumental period of funding expansion and government initiative in attempts to strengthen the digital footprint.

The following are five key themes from 2021 that will have repercussions for next year.

Biden’s historic infrastructure bill

Biden signed into law the Infrastructure Investment and Jobs Act in the middle of November, which allocated $65 billion for broadband. The Commerce Department’s National Telecommunications and Information Administration will oversee the distribution of some $42 billion of that pot to the states.

The bill, which was stalled for months by Democratic Party negotiations over the timeline to pass the legislation in addition to Biden’s social spending reconciliation package, will represent a key mechanism to increase the affordability of high-speed Internet to hard-to-reach communities, in addition to provisions for clean energy and maintenance on physical transportation.

Following years of declared “Infrastructure Weeks” under President Donald Trump’s administration, which never resulted in major legislation to strengthen the nation’s physical and online systems, Biden made infrastructure reform a key priority of his presidency.

Biden’s legislation was called “once in a generation,” and amounts to one of the most expensive infrastructure investments in U.S. history. The Benton Institute for Broadband and Society called it “the largest US investment in broadband deployment ever.”

One key player in the distribution of the funds is former governor of Rhode Island and Commerce Secretary Gina Raimondo, who was confirmed by the Senate to head the department in March.

Raimondo takes on a lead role in making sure the bills funds are used effectively and that newly funded projects are rolled out smoothly.

In her statements around the bill’s passage, she has emphasized need for government to work together with the private sector, for the Federal Communications Commission to continue facilitating and increase efforts for granular mapping of broadband availability across the nation so that areas most in need can be properly targeted for projects, and to push for fiber connectivity to ensure best outcomes for consumers.

Another player that could peer into the picture is Alan Davidson, who was nominated by Biden to assume the lead role at the NTIA. He has yet to be approved by the Senate for that position.

The growth of Covid welfare programs

In March, Congress passed Biden’s American Rescue Plan Act of 2021 to provide the U.S. economy with a $1.9 trillion stimulus for COVID-19 pandemic relief.

ARPA was among the largest stimulus plans in U.S. history, which provided grants to state and local governments through its Coronavirus Local Fiscal Recovery Fund.

Several entities used these funds to strengthen broadband infrastructure in their communities, including several across Illinois through the state’s ARPA Accelerator program.

The bill also provided local governments funds that could be used for broadband development through the Capital Projects Fund.

Additionally, ARPA funded the Federal Communications Commission’s $7.17 billion Emergency Connectivity Fund to provide tools and services necessary for remote learning to schools and libraries so that they can connect more students in need.

The fund covers reasonable costs of laptop and tablet computers, Wi-Fi hotspots, modems, routers and broadband connectivity purchases.

The program is consistent with the vision of Biden’s pick to head the FCC Jessica Rosenworcel, who was confirmed by the Senate this month.

Rosenworcel has spent her career addressing this issue and is widely recognized as the first to coin the term “homework gap” to describe the challenges disadvantaged students face in completing school assignments due to digital connectivity barriers.

Supply chain woes

By mid 2021, global supply chain issues, which held up supplies and created product shortages, began to mount and push deep into the back half of the year.

The technology and broadband industries were impacted by these conditions, as they did not have the necessary materials to manufacture products and they additionally faced an international workforce shortage.

One critical area of concern is fiber builds. Dean Mischke, vice president of Finley Engineering Company, which builds out telecommunications infrastructure, warned companies that they need to get ahead of supply purchases beyond next year to secure key fiber supplies.

In Vermont, a public-private partnership came together to purchase thousands of miles of fiber cable at a fixed cost from a cooperative, which said it is expected to see its cost rise by 35 percent due to supply chain issues and inflation.

With federal money raining down on the states, these issues will be a focal point for 2022.

As if that wasn’t enough, the tech and wireless world saw critical shortages of semiconductor chips.

In our ever-more online world, any shortage in essential parts for digital devices is going to be a problem. And it’s been a problem for many months. The a bipartisan bill was introduced to combat the shortage back in June 2020.

Commerce Secretary Raimondo said that Biden plans to address the shortage by incentivizing domestic production of chips.

The trade war between the U.S. and China is commonly cited as another cause of the shortage. Just this month, the U.S. Department of Defense restricted exports of critical technology to a leading Chinese semiconductor manufacturer due to its alleged ties to China’s military.

The ongoing issues have contributed to inflationary pricing among commodities such as groceries and gasoline, the prices of which have peaked in recent months.

U.S. gets tough on Chinese telecom

Throughout the year, the U.S. government took several steps to cut ties with Chinese telecom companies it believes to be aligned with the Chinese government.

A recent Washington Post investigation found that large telecom equipment manufacturer Huawei Technologies has been more involved with Chinese government surveillance efforts than previously revealed.

The corporation had previously denied involvement and said it only sells general purpose networking gear.

Huawei was a big target for the U.S. government, along with several other equipment manufacturers, including ZTE. And axing Chinese companies from the U.S. market represented one of the only common goals of both the Biden and Donald Trump administrations.

In June, the FCC voted to stop authorizing equipment from manufacturers such as ZTE and Huawei, and in July to rip and replace from U.S. infrastructure that same equipment – a move that cost $1.9 billion.

In October, Congress with near unanimous support passed a bipartisan bill prohibiting the FCC from “reviewing or issuing new equipment licenses to companies on” the list of companies that it considers security threats.

Moreover, at the beginning of this month, the Biden administration announced initiatives with international allies to track and combat surveillance in authoritarian countries such as China.

Followed soon after was the DoD’s restrictions on trade to the Chinese semiconductor industry were announced.

The Biden administration’s action on China finds bipartisan support and continues Trump’s push against the U.S. adversary amid increasing tensions between the rivals, with the former president signing a bill last year that banned federal funds from being used to purchase Huawei equipment.

Huge cyberattacks

Finally, this past year has seen some of the country’s most high-profile cyberattacks, which represents another front for adversarial nations to wage war on the U.S.

Oil pipeline system Colonial Pipeline was hacked, shutting down key fuel systems and causing a headache for the Biden administration when gasoline shortages arose.

So was meat producer JBS USA.

But what’s particularly notable about these hacks isn’t necessarily who was hacked, but the sheer number of similar cyberattacks that took place in the U.S. throughout the year.

A House investigation into the year’s most prominent hacks found that “small lapses” in employee behavior, such as accepting fake browser updates and maintaining a weak password, allowed hackers to access company systems.

Further, the investigators believe the companies’ “lack of clear points of contact with the federal government” hampered response efforts to the attacks.

Since the attacks, cyber security officials have asked Congress to push legislation that would require companies to notify the government about cyber breaches.

Lawmakers remain concerned about the security of the U.S.’ critical infrastructure, saying that the precedent of companies, such as Colonial Pipeline and JBS paying ransoms, incentivizes hackers to carry out future attacks.