How Cities Can Avoid Wasting Federal Broadband Funds

Two federal laws passed in 2021 increased broadband funding for states by more than $20 billion. That comes on top of the now $38 billion that the Federal Communications Commission (FCC) can spend. And if Congress passes the federal infrastructure bill, another $65 billion would go to states and cities with the goal of providing high-speed internet to nearly all Americans.

The FCC estimates it would cost $80 billion to provide broadband internet to everyone. All these expenses would get us there. Unfortunately, much of the incoming funding risks being misused by dividing too much, too quickly, and not being properly targeted.

But there are steps states and municipalities can take to effectively use the broadband financing they are getting. A new report from the Mackinac Center for Public Policy sets out four guidelines for making the best use of this money.

Clear the way for progress: The first thing to do is for cities, counties, municipalities, boroughs and every other municipality to look at the barriers they have that can block the current internet service providers. This includes looking at bollard access rules, allowing fifth-generation (5G) and small cell installation points, creating fair rules for crossing government rights of way, and keeping taxes low on technology that allows people to to connect to networks. Local governments should review their regulations, and states everywhere should step in and lower regulatory barriers.

Leverage the private sector and competition: Most residents have affordable high-speed internet that keeps getting better and cheaper, at the price they pay for the speed they get. The motivation for this is relatively flexible rules, which allow for more companies and more competition. In the absence of local competition, government agencies must remove all barriers that prevent it. If there is limited or no high-speed Internet access in an area, the government should engage the private sector if possible. Internet service providers, unlike government agencies, have experience in managing these networks. Officials should use these, if necessary, through a fair competitive bidding process to expand access to the high-speed Internet.

Avoid one-size-fits-all solutions: The areas in the United States that do not have access to broadband internet are usually in underpopulated rural or mountainous areas. It is expensive to extend wired broadband connections to people who live there. But there is good news ahead. The 5G mobile network is expanding rapidly and the right device can reach this network and provide internet speeds from 50 mbps to 1 gbps. This can go to a cell phone or a router that connects to computers and other devices. It’s a game-changer for those desperate for fast internet. But it requires government agencies not to go all-in on just one type of technology. The bottom line is that people have access to high-speed internet — not necessarily how they get it. Technologies yet to be developed can provide people with new means to connect at broadband speeds, and governments should not favor one type of technology over another.

Don’t run networks – subsidize individuals: Instead of researching the obstacles they’ve raised, using the private sector, and staying on top of which solutions will work, many cities will go all in on their own government networks. Almost all of these attempts have resulted in financial failure. If all of the above guidelines fail and there are still residents who cannot afford high-speed internet, it would be better for cities and towns using federal broadband funding to provide targeted vouchers to their residents. This encourages private providers to expand, does not put them in competition with a government monopoly and does not put taxpayers at risk for failure.

An unprecedented amount of money is going to states and cities for broadband. If local government officials want to serve their residents in the best possible way — and serve the rest of American taxpayers by avoiding waste — they have a way forward. They need to clean up unnecessary regulation, encourage competition, lower barriers to private investment and resist focusing on just one type of technology solution. That’s the right way to connect America.

Jarrett Skorup is director of marketing and communications at the Mackinac Center for Public Policy, a research and education institution in Midland, Michigan. Follow him on Twitter @JarrettSkorup.

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