According to the most recent report from the Federal Communications Commission, 19 million Americans, or 6% of the total U.S. population, still lack access to broadband service. Without an internet connection, consumers in these unserved areas are unable to access important news stories, utilize services like telehealth, and shop for goods and services online, among others.
In an attempt to remedy the access problem, Senators Michael Bennet (D-CO), Rob Portman (R-OH), and Angus King (I-ME) introduced The Broadband Reform and Investment to Drive Growth in the Economy (BRIDGE) Act of 2021. While the bill does address the issue of internet access in unserved areas, the BRIDGE Act contains major problematic provisions that would affect consumers in America.
If passed by Congress, the BRIDGE Act would allocate $40 billion to build “future-proof” or fiber optic cable networks in unserved, tribal and rural areas. Additionally, the bill would preempt state laws that prohibit government-run networks and mandate funding recipients provide a rate-regulated option that meets a minimum of 100 megabits per second upload and download speed.
By imposing heavy regulations over broadband deployment in rural areas, the BRIDGE Act would place enormous compliance costs on internet service providers, ultimately leading to less innovation and lower quality service for consumers. Congress should look to prioritize market-oriented approaches that expand access to broadband without harming consumers and stifling innovation, such as the Rural Connectivity Advancement Program (RCAP) Act of 2021.
Deploying fiber in some unserved areas would not only be impractical, but also overly expensive. According to the American Action Forum, delivering fiber to the 14% of areas that currently lack internet access would cost around $80 billion, with $40 billion of that total going to serve just the last remaining 2% of consumers. These Americans live in locations where building fiber infrastructure is incredibly difficult, such as in towns nestled in the Appalachian Mountains or isolated communities in Alaska.
Other technologies can enhance access for much less. Utilizing a mix of technologies such as wireless LTE (Long-Term Evolution), unused spectrum, TV white spaces, and low Earth-orbit satellites would significantly reduce the cost of reaching universal coverage. Boston Consulting Group estimated that reaching universal coverage through a mix of technologies would only cost only about $10 billion, four times less than what has been proposed in the BRIDGE Act.
A fiber only approach will also harm innovation. As investments are shifted into fiber networks, competition from other technologies in the market will be reduced. The decreasing investments will ultimately result in repressed innovation in new technologies.
Controlling what speeds internet service providers offer also results in fewer investments into broadband. Higher speeds are more expensive for internet service providers to deliver. As the cost of delivering service increases, less capital becomes available for innovation. Setting the standard at the 100/100 severely disincentivizes the use of expendable capital for investments into improving broadband networks.
Fewer investments into fiber will result in a worse quality internet service for consumers. Requiring providers to reach a minimum speed for service disincentivizes innovation to improve quality for consumers. A high minimum standard also can create a race to the bottom where providers only choose to meet minimum standards due to the incredibly high costs associated with providing the best service.
Internet speeds are already improving for consumers yearly. According to US Telecom, “gigabit-speed home broadband availability has skyrocketed from 6% to 86% in just over three years.” If Congress wants to ensure internet providers continue to improve the speed of service, it should not pass the BRIDGE Act which will significantly raise the cost of innovation.
Price regulations on internet rates would reduce the quality of internet service similarly to speed controls. Imposing price regulations on providers reduces the amount of revenue providers bring in, crowding out private investment in innovation and resulting in fewer technological innovations in the broadband space.
Technological innovations have the potential to bring big gains for consumers. Investments in new technologies like 5G can bring up to 4.6 million new jobs and $1.7 trillion to GDP. With the introduction of rate regulation in the BRIDGE Act, a technology revolution like 5G would come much later and consumers would miss out on this substantial economic growth.
The BRIDGE Act is the wrong plan for internet consumers. Requiring “future-proofing” of networks and placing heavy regulations on internet speed and price, the government imposes an added burden on internet service providers that will only result in lower quality internet for consumers and less innovation in the industry. Congress should avoid this bill at all costs and look instead to pass the RCAP which will provide significantly more benefits to consumers.
The BRIDGE Act would ruin consumer broadband.