By Jon Swartz
For decades, lawmakers, public-policy strategists and consumers have decried a “digital divide” that left swaths of the country with spotty internet service.
The $65 billion allocated to broadband expansion as part of the Biden administration’s $1 trillion infrastructure bill could change all that with improved internet services for rural areas, low-income families and tribal communities. It gives advocates what they have long wanted: Money to build out internet infrastructure to areas lacking access, and subsidies to Americans who cannot afford high-speed internet service.
The devil, of course, is in the details. Experts who spoke with MarketWatch noted funding will have to be used properly in the years ahead, but any nationwide plan is welcome after years of inaction.
“We have not had a significant infrastructure upgrade in 30 years since the Cold War. Overall, this is a good start,” Dr. Robert Spalding — a retired U.S. Air Force brigadier general who, as the White House National Security Council’s senior director for strategy, wrote a 2017 report on the potential of 5G on telecommunications and computing infrastructure — told MarketWatch.
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“This is an opportunity to create an Eisenhower national highway system for the information age,” Spalding said, referring to President Dwight Eisenhower’s Federal-Aid Highway Act of 1956 that ushered in an interstate highway system.
Previous investments in science and technology, he asserted, have led to economic prosperity, citing the space race, computing, satellites and the origins of the internet. Failure to invest properly for all Americans, he warned, would put the U.S. at a severe disadvantage — in his report, Spalding warned “China has achieved a dominant position in the manufacture and operation of network infrastructure,” and “China is the dominant malicious actor in the Information Domain.”
Grants to states and subsidies to low-income households
The implications of a national U.S. broadband network go far beyond equal access. It underscores the necessity of high-speed internet in the age of COVID-19, which has forced millions of Americans to work, learn and shop from home; reshaped the health care industry; and shifted most companies to a hybrid office model and digital transformation.
“This will truly bring our economy into the 21st century,” Deputy Commerce Secretary Don Graves said of the landmark legislation. President Joe Biden is scheduled to sign the bipartisan bill — 19 Senate Republicans and 13 House Republicans voted for it — on Monday.
In a Zoom briefing Wednesday, Graves said 30 million Americans still lack access to reliable broadband. Senior Commerce Department officials repeatedly said the agency had learned from similar programs on how to best fund and implement grants nationwide, as well as properly vet providers.
That won’t be easy. Eisenhower’s highway plan was overseen by the federal government; the broadband plan will be implemented through a mosaic of grant recipients overseen by individual states and territories. Two key funding pieces of the $65 billion package stand out: A major chunk, $42.45 billion, will be allocated by the Commerce Department in grants to states for broadband projects, which can range from network deployment to data collection to determine what areas need it.
For more: How the infrastructure bill’s $65 billion in broadband spending will be doled out
The broadband plan, which Biden originally pegged at $100 billion, would help home-internet providers like AT&T Inc. /zigman2/quotes/203165245/composite T -2.22% , Comcast Corp. /zigman2/quotes/209472081/composite CMCSA -2.77% and Charter Communications Inc. /zigman2/quotes/201656355/composite CHTR -1.44% with billions of dollars in grants that states can dole out to expand their networks to households that lack high-speed service. This has raised questions among some consumer advocates about the wisdom and efficiency of paying telecom operators to extend coverage in areas they have historically underserved.
Another significant slice, $14.2 billion, will go to the Federal Communications Commission to establish an Affordable Connectivity Program, an extension and revision of the Emergency Broadband Benefit (EBB) to provide $30-a-month vouchers to low-income Americans to pay for internet service. EBB, which essentially is being replaced, offered $50 a month, but reached fewer people.
More than a quarter (27%) of adults living in households earning less than $30,000 a year are smartphone-only internet users, meaning they do not have broadband internet at home, according to a Pew Research Study. Conversely, of adults earning more than $100,000 a year, 93% have broadband access at home, as well as devices such as a laptop, tablet, or smartphone.