President Biden’s proposed $2 trillion spending plan unveiled Wednesday — designed to modernize and strengthen the U.S.’s infrastructure — earmarks $100 billion in broadband investment over the next eight years.
The goal: to ensure every American has access to high-speed internet service before the decade is out. Today, about 30 million U.S. residents live in areas where there is no access to broadband with minimally acceptable speeds (which the FCC defines as at least 25 Mbps downstream).
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The American Jobs Plan would be largely funded by hiking corporate taxes: Biden is proposing to increase the corporate tax rate from 21% to 28%.
In urban areas, 97% of Americans have access to high-speed fixed broadband — but in rural areas, only 65% do, according to the FCC.
The White House compared the broadband piece of the spending plan to the 1936 Rural Electrification Act, which brought electricity to nearly every home and farm in the country. “Broadband internet is the new electricity. It is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected,” says the administration’s fact sheet for the American Jobs Plan released Wednesday.
According to the White House, Biden’s plan will promote price transparency and competition among internet service providers, including by removing regulations that prevent municipally owned or affiliated providers and rural electric co-ops from competing with big ISPs “on an even playing field.” The proposal also aims to reduce the cost of broadband internet service; however, the administration says individual subsidies are just a short-term solution.
“Americans pay too much for the internet — much more than people in many other countries — and the President is committed to working with Congress to find a solution to reduce internet prices for all Americans, increase adoption in both rural and urban areas, hold providers accountable and save taxpayer money,” the fact sheet says.
Some industry groups applauded Biden’s broadband-stimulus plan. But the NCTA, which represents major U.S. cable operators, complained that it “mistakenly lump[ed] in our successful modern digital networks with our decaying roads, bridges, waterways and electric grids.”
“Government does have a critical role to play in getting networks to areas that lack service and helping low-income families afford it,” Michael Powell, president/CEO of NCTA, said in a statement. But, he added, the solution is not to “either to prioritize government-owned networks or micromanage private networks, including the unfounded assertion that the government should be managing prices.”
Meanwhile, the Internet Innovation Alliance, a coalition of businesses and non-profit orgs whose members include AT&T, also expressed concern with the Biden plan’s goal of reducing internet-access prices for consumers.
“It’s unrealistic to think that broadband prices could be artificially lowered, as the plan recommends, to a point that they are affordable for Americans most in need of assistance, while simultaneously leaving service providers with sufficient revenue to build, upgrade and maintain the networks that keep the United States globally competitive,” the IIA said in a statement. The coalition urged the Biden administration to revamp the FCC-administered Lifeline Program with “a larger monthly benefit and expanded base of funding” instead.
Overall, Biden’s American Jobs Plan would invest about 1% of U.S. GDP per year over eight years to “upgrade our nation’s infrastructure, revitalize manufacturing, invest in basic research and science, shore up supply chains and solidify our care infrastructure,” according to the White House.
Separately, earlier this month Sen. Amy Klobuchar (D-Minn.) and House Majority Whip James Clyburn (D-S.C.) introduced the Accessible, Affordable Internet for All Act, legislation that calls for more than $94 billion in funding to build high-speed broadband infrastructure in unserved and underserved communities.
According to the FCC’s annual broadband deployment report released in January 2021, over the past three years, the number of Americans living in areas without access to fixed broadband at 25/3 Mbps dropped nearly in half. The report, issued under outgoing FCC Chairman Ajit Pai, a Trump appointee, claimed to have found “for a third consecutive year that deployment is occurring in a reasonable and timely manner.”
Current acting FCC Chairwoman Jessica Rosenworcel, appointed to head the commission by President Biden, issued a dissenting statement at the time saying “it confounds logic that today the FCC decides to release a report that says that broadband is being deployed to all Americans in a reasonable and timely fashion.”
“There are people sitting in parking lots using free Wi-Fi signals because they have no other way to get online,” Rosenworcel said. “There are students who fall in the homework gap because the lack the high-speed service they need to participate in remote learning. There are mayors in towns across the country clamoring for better broadband so their communities have a fair shot at digital age success.”
Last week, the FCC announced a new initiative to collect accounts on broadband availability and service quality directly from consumers as part of its Broadband Data Collection program, with additional info at fcc.gov/broadbanddata.
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