Free State Foundation

For more than thirty years, American communications users—really, American consumers—have been charged roughly $1 billion to $3 billion a year to subsidize Internet and related services for schools and libraries through the government's E-Rate program, which is one component of what's called the “Universal Service Fund.” That is a lot of compulsory generosity. Yet only now are policymakers asking the obvious question: Is this money helping students learn—or is it doing harm? Some treat that question as out of bounds. It is not.

Kudos are due to the Trump Administration for making key changes to the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program to bring it into line with its underlying statute, while  generating  a better outcome at a fraction of the price. While state submissions are still being reviewed, the program’s total cost could ultimately come in 30 to 50 percent lower than its budgeted amount, saving upwards of $20 billion or more. Even in D.C., that is real money. The well-earned outcome raises questions over what to do with any savings.

On April 30, a committee in the California Assembly will hold a hearing on proposed legislation that would dictate rates for interstate broadband information services. Intended to promote affordability, the California bill would unwisely subject broadband service providers to price controls of $15 per month. But state-level rate regulation takes away broadband providers’ ability to set their prices in the free market, directly undermining their returns on investment in their network property.

Congress should extend the worthwhile Affordability Connectivity Program (ACP) promptly by appropriating additional funding. At the same time, it can consider revising the program to better target the ACP benefit to those lower-income households most truly in need and adopting measures to minimize, to the extent possible, any waste, fraud, and abuse in the program. The ACP represents one-half of the federal government's push to make it possible for every American to access a high-speed Internet connection.

Broadband policy has emerged as a way for Democrats running for President to appeal to primary voters. They emphasize their commitment to "Net Neutrality," often in its most extreme form (i.e., public utility regulation). They also promise expansive (and expensive) government-funded construction of broadband infrastructure. Neither, however, constitutes effective policy.

Jonathan Sallet, now a Senior Fellow of the Benton Institute for Broadband and Society and FCC General Counsel during Tom Wheeler's chairmanship of the Obama-era Federal Communications Commission, has published a new paper titled, "Broadband for America's Future: A Vision for the 2020s." Because I disagreed with much (but not all) of the Obama FCC's broadband policy – especially including its imposition of public utility-like regulation on Internet service providers – I am not surprised that I disagree with much

The D.C. Circuit issued its long-awaited decision in Mozilla v. Federal Communications Commission.  The court affirmed the Federal Communications Commission’s Restoring Internet Freedom (RIF) Order, identifying some flaws in the agency’s reasoning but finding the agency could likely correct those errors on remand without vacatur. Though largely expected given the Supreme Court’s precedent in Brand X, the decision is nonetheless a sweeping victory for the FCC and judicial validation of Chairman Ajit Pai’s light-touch regulatory framework for the broadband industry.

In his address on April 26, Federal Communications Commission Chairman Ajit Pai cited Free State Foundation research estimating that the Open Internet Order "has already cost our country $5.1 billion in broadband capital investment."

Just two years after the FCC adopted the Open Internet Order, I estimate that broadband providers significantly slowed investment, despite the claims by the FCC that the opposite would occur. Taking into account the latest USTelecom investment data, I now estimate that foregone investment in 2015 and 2016 was about $5.6 billion, an amount providers likely would have invested in a business climate without Title II public utility regulation.