Biden’s Broadband Boondoggle

Included in the bipartisan infrastructure bill is $65 billion for broadband deployment. Most of that, $42 billion, is slotted for subsidies to rural communications networks, promising to conquer the digital divide. This is doubtful. The government has already expended at least $200 billion (in 2021 dollars) on the Universal Service Fund established by the 1996 Telecommunications Act. Most of the money was meant to extend networks that serve rural areas, but some was also allocated to schools and libraries, healthcare facilities and low-income mobile phone users. This money had little impact on network infrastructure. In 2011 the Federal Communications Commission found that 19 million people, living in seven million households, couldn’t get state-of-the-art broadband service. Ten years later, despite another more than $50 billion in subsidies for high-cost networks, the number in underserved areas was as many as 30 million, according to President Biden. It’s unlikely that another big batch of carrier subsidies will complete broadband infrastructure. The government has operated with a stunning lack of accountability, despite a steady stream of warnings that the system needs far better oversight. We need to eliminate rampant waste, fraud and abuse before we hand out another $42 billion to internet service providers.

[Thomas Hazlett is a professor of economics at Clemson and Chapman universities. He served as chief economist of the FCC from 1991 to 1992.]