By: Katie McAuliffe
President Biden announced his “American Jobs Plan” – a two trillion dollar spending package meant to target all sorts of infrastructural issues. Here at Digital Liberty we are taking the magnifying glass to see how the President’s Plan will impact technology and broadband.
The Biden infrastructure plan calls for investing $100 billion dollars to build out fiber optic broadband infrastructure. Not only is a fiber-only approach not the right answer, but dumping billions of dollars to build-out infrastructure has been tried before with the 2009 BTOP program and it did nothing to increase broadband adaptation. Instead we got wasteful overbuilding of infrastructure and countless of examples of corrupt uses of funding.
The American Recovery and Reinvestment Act of 2009, created a $4 billion grant program under the National Telecommunications and Information Administration. This program – the Broadband Technology Opportunities Program (BTOP) sought to “bridge the technological divide” among other things.
The program was administered by the NTIA through giving out grants to states. After using Census data, it was found that the BTOP program had no positive effect on broadband adaptation.
Right now 94% of Americans have access to broadband. The last six percent live in remote or extremely-remote areas. Funding to build fiber optic broadband infrastructure does not make sense. That is why instead of this money going to connect the last 6%, it will actually go to overbuilding and repurposing the infrastructure of major urban areas. We saw this problem in Colorado where companies were using funds to rebuild fiber networks in places that already had fiber. In other areas of Colorado – they were using funds to overbuild fiber connections to 26 schools that already had them – while other schools remain unconnected. We saw it in Florida where local officials gave grant money to their friends in no competitive bid process. Weirdly, $28.5 million of BTOP funding went to producing a web series about a single mother. Worse yet, from 2009 when BTOP was instituted to 2017, at least one-third of all the reports made by the Inspector General for the Department of Commerce were related to the BTOP program.
Closing the digital divide cannot be accomplished by Marshall Plan style money dumps, instead we have to apply market incentives to use these resources most effectively. Fortunately, we have options to do this. The Federal Communication Commission has been conducting reverse auctions for multiple years and it has been far more beneficial at allocating taxpayer money to the entity best poised to use it.