President Joe Biden’s massive $2 trillion infrastructure proposal includes $100 billion to provide “Broadband for All” Americans. However, the plan doesn’t leave much room for big tech companies.
Instead, the plan prioritizes spending for government-run or nonprofit networks. According to a White House fact sheet, these companies have less pressure to focus on profits. At the same time, they can remain committed to serving their local communities.
Big Tech Pushes Back
The Biden team wants to provide broadband for all. Specifically, he’s targeting 35% of rural Americans who use below standard internet speeds. The plan also earmarks billions to build internet infrastructure on tribal lands. However, the plan will require consultation with tribal communities before proceeding.
Cable and telecom lobbying groups already made their opposition known. Michael Powell, head of the cable industry group NCTA, said that they share the same goal as the President. They also want to ensure 100% access to broadband networks for all Americans.
However, they find the government’s plan to provide funding and subsidies to local networks hard to accept. In addition, they also oppose the plan to devote federal dollars for future-proof networks.
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Many believe future-proof is a reference to fiber technology, which edges out cable. Finally, Biden also promised to bring down prices.
Biden’s Plan Ignores the Reality of Broadband
While the objectives to provide broadband access to rural areas are commendable, the plan ignores the reality of rural landline broadband provision. For one, the plan rejects incorporating Big Tech in-network cost recovery. If rural networks get an upgrade, streaming video firms like Netflix, Hulu, etc become the main beneficiaries.
Big streaming video entertainment traffic takes up 90% of network operating costs. In contrast, work, education, health, and other services only take up 25% of bandwidth. Also, they only use up 10% of the cost. This means, upgrading rural networks benefits big tech streamers. They can now reach more areas with minimal fronting expansion costs.
Forbes’ Roslyn Layton wrote that Biden’s broadband plan needs to focus on social uses. These include e-government, telehealth, homework, online work, public safety, news, and e-commerce. Instead, Biden’s policy will directly benefit bandwidth-heavy services. Streaming services companies should be the ones to cover their distribution costs.
The Many Challenges of Biden’s Infra Plan
Critics of the entire infrastructure plan are coming in from all sides. Senate Minority Leader Mitch McConnell (R-KY) called it a “Trojan horse” for progressives. Republicans have their knives out while they wait for the bill to arrive at the Senate floor. Meanwhile, Biden’s plan also got a thumbs down from his own party mates.
Moderate Senator Joe Manchin (WV) said that planned tax hikes might be too high for businesses. With a lot of opposition, Biden’s Broadband for All proposal will need a lot of horse-trading to push through.
Meanwhile, Powell cautioned the Biden White House against leaving them out. He said they shouldn’t promote policies designed to penalize incumbent broadband providers. Powell said the industry already made billions in investments in broadband infrastructure.
These improvements helped America stay connected throughout the pandemic. Big Tech “met the enormous challenge of the pandemic, keeping Americans working from home, learning remotely, and using telehealth to stay safe,” he said. This is why the government shouldn’t withhold funding and incentives from them.
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Jonathan Spalter, CEO of the trade group USTelecom, agrees. “Our shared communications networks are backed by $1.8 trillion in private investment that helped the country navigate the depths of the pandemic with reliable and resilient connectivity,” he said.
Good Luck Getting the Broadband for All Plan Passed
Republicans already declared that Biden’s infrastructure plan has little chance of receiving GOP support. With a slim majority, Democrats can only maneuver so much before trade-offs and concessions come into play. The broadband industry will also be looking over its shoulders during this negotiation process.
“We are ready to support a new broadband expansion plan that is well-crafted and will connect unserved areas and provide financial assistance to low-income and minority communities.
Billions of dollars are a big factor in this equation, but wise policies and carefully crafted details will make the difference between a watershed moment, and a flood of waste, failure, and regret,” Powell concluded.
Watch the CNBC TV video where T-Mobile CEO Mike Sievert weighs in on ‘Home Internet’ and President Joe Biden’s infrastructure plan:
Will you support Biden’s Broadband For All plan complete with a $100 billion budget? Do you think the program’s plan aligns with the objectives?
Let us know what you think about this proposal. Share your thoughts in the comment section below.