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. (NYS:T) , Comcast Corp. (NAS:CMCSA) and Charter Communications Inc. (NAS:CHTR) 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.
For more: How the pandemic exposed the need to expand broadband in the U.S. at prices families can afford
Some 14 million Americans live without any internet access, and 25 million live without faster broadband, hindering their access to education, job opportunities and health care, according to the FCC.
The $3.2 billion EBB program passed this year assisted families and households struggling to afford internet service during the COVID-19 pandemic. So far, more than 7.5 million people have activated broadband service with help from the program, according to Nathan Johnson, co-CEO of TruConnect, a self-described wireless lifeline provider.
“There was a misperception that this is about handouts and giveaways. But COVID made it clear that [broadband improvements] make the infrastructure of the U.S. economy work better,” Johnson told MarketWatch. “This impacts education, remote training, telehealth, working from home.”
The challenges of building a level playing field
Equally important, the $65 billion broadband plan could potentially reshape equal access to digital education resources, and create a level playing field for kids from diverse and disadvantaged backgrounds.
Perhaps the most important aspect of the bill requires low latency to underserved communities, Allen Drennan, principal of Lumicadem, a learning management system for ed-tech and video streaming, told MarketWatch. The term refers to the lag time for things like live-streaming and videoconferencing, where there should be a real-time delay of 5 seconds or less. Past efforts to fund rural internet have ignored low latency, a requirement for real-time, immersive communications necessary to extend distance learning, Drennan said.
Karen Lightman, executive director of Metro21: Smart Cities Institute, at Carnegie Mellon University, calls the multibillion-dollar plan a “a once-in-a-lifetime opportunity” that would unleash smart-city technology to radically reduce greenhouse-gas emissions. She told MarketWatch that 40% of emissions currently are caused by inefficient use of buildings’ heating and cooling.
Read: Why a key federal fund to expand fast internet in America is in jeopardy
In rural areas, Tina May, vice president of rural services at agricultural cooperative Land O’Lakes Inc., compares the broadband plan to the Rural Electrification Act of 1936, which brought electricity to every U.S. home. She expects the same this time with high-speed internet access.
Achieving the bill’s desired goals, however, is far from a slam dunk. Most of the money would be made available through grants to states, and implementing such an ambitious agenda across so many states in various stages of need is challenging, say broadband officials.
“We now need to move our focus from Congress to NTIA and the state and local level,” Gary Bolton, president of the Fiber Broadband Association, said in a statement. “Only 26 states currently have broadband offices, and other states have a designate, which is typically a multiagency broadband task force. And, while 40 states currently have broadband programs, these state broadband programs vary widely.”
The spending will only be effective if intertwined industries are in good shape, Spalding said, pointing to the necessity of a healthy manufacturing base.
“We don’t have a manufacturing base to take advantage of it,” Spalding cautioned. “Look at the supply-chain issues. [Hurricane] Katrina is an example of what happens when infrastructure is heavily damaged. We depend on these services for life.”
Finally, there is the matter of security. With high-speed internet access available to millions of more people soon, the likelihood for cyberattacks escalates. “It amplifies security risks because everyone has access to the [superfast digital] highway,” Bipul Sinha, CEO of cloud data-management company Rubrik Inc., told MarketWatch. “Data security is going to be a massive challenge.”