ITIF recommends capping broadband deployment costs and reallocating funds to affordability initiatives

Another opinion piece in the Duluth News Tribune, this one from Joe Kane, director of broadband and spectrum policy at the Information Technology and Innovation Foundation (itif.org) in Washington, D.C….

It’s time for a bold rethinking of broadband policy to match today’s realities — and to stop wasting taxpayer dollars on problems we’ve already solved.

Federal programs like the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) initiative, the Federal Communications Commission’s High-Cost Fund, and the Agriculture Department’s ReConnect program remain fixated on expensive infrastructure projects even as those deployment gaps have closed.

The FCC reports that 99.98% of U.S. locations have access to broadband speeds of 100 Mbps download and 20 Mbps upload. Low-Earth Orbit (LEO) satellites and fixed-wireless access reach even the most remote areas.

BEAD keeps pouring billions into fiber projects costing $70,000 per household — when Starlink could connect them for $600 — and the FCC’s High-Cost Fund spends $4.5 billion yearly on rural broadband, dwarfing the $900 million allocated to the FCC’s affordability program, Lifeline. Exorbitant infrastructure costs siphon away resources that could make broadband more affordable for low-income families.

This misalignment of priorities is inefficient and a missed opportunity to address the deeper issues causing the digital divide.

According to the National Telecommunications and Information Administration, nearly 15% of offline households cite cost as the main barrier to broadband adoption. Programs like the COVID-era Affordable Connectivity Program (ACP) demonstrate how targeted subsidies can close this gap. The ACP provided $30 monthly to low-income households, but its overly broad eligibility criteria — covering 42% of U.S. households — led to unsustainable costs. By mid-2024, the ACP ran out of funding and collapsed.

Congress should reallocate funds from costly deployment initiatives to affordability and digital literacy to deliver greater effect and cost taxpayers much less. Cutting outdated deployment programs could more than pay for a reformed ACP, offering targeted subsidies to households earning up to 135% of the federal poverty line or those recently unemployed.

Likewise, the National Telecommunications and Information Administration should reform BEAD to make it technology-neutral and then cap per-location costs at $1,200 to finish any remaining deployment gaps for a fraction of the cost of the current fiber bias. States should then use the savings to address the affordability and digital literacy barriers that comprise the bulk of the remaining digital divide.

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