I’m not a big fan of federal spending programs, but COVID-19 revealed the need for all Americans to have access to broadband. Carefully investing taxpayer dollars to bring high-speed internet to unserved rural areas makes sense, but lighting taxpayer dollars on fire in a special-interest giveaway to build “networks to nowhere” does not. As always, the devil is in the details.
Only in Washington—where two years of budget-busting, inflation-fueling spending mania has left interest rates soaring and the economy teetering on the brink—would such an obvious distinction be lost on policy.
But sure enough, even after pouring $175 billion into broadband programs in the past five years, some big-spending Democrats now want to spend billions more on projects that won’t even connect a single unserved home or business.
Instead, they’re pushing to spend billions on taxpayer handouts to electric utilities to build what are known as “middle-mile” broadband networks—the segment of our internet infrastructure that carries traffic between the local, “last-mile” ISPs serving homes and businesses, and the backbone networks at the core of the global internet.
Supporters argue that an open-access, publicly funded middle-mile network nearby might entice small ISPs—or even local governments—to build out their own last-mile networks on their own dime. But experience shows this “hope and pray” approach to closing rural broadband gaps just doesn’t work.
Take the plight of Kentucky’s taxpayers as one example. Back in 2014, politicians promised a 3,000-mile statewide middle-mile network would connect every county and encourage local ISPs to then build out to each home. Instead, KentuckyWired—now years overdue and more than $100 million over budget—is struggling to convince any county government to sign on as a last-mile provider. Kentucky taxpayers are stuck paying for a vanity project that crisscrosses the state but connects almost none of its residents.
Texas offers a similar cautionary tale. The Taxpayers Protection Alliance documented how one consulting firm is trying to cash in on the middle-mile craze by convincing communities to give the firm lucrative network construction contracts—even though more than 95% of homes in those communities are already wired for broadband.
Progressives’ wild-eyed eagerness to scale this ash-heap model nationally becomes even more absurd considering that Congress is already handsomely funding a more logical approach: building out to connect unserved homes directly.
The bipartisan infrastructure bill, for example, committed $42 billion to build networks that directly reach unserved rural homes—the measuring stick both parties agree is the real end goal.
Sixteen months later, though, that funding is still sitting at the Commerce Department, waiting to be distributed to state broadband offices. An additional $1 billion in grants for middle mile projects just went out the door last week.
Instead of spending billions more just out of habit, lawmakers should hold bureaucrats’ feet to the fire to get the funding they’ve already allocated out the door and into the ground effectively. Give these historic investments a chance to work before declaring the infrastructure bill a failure and burning billions more on even less-promising strategies.
Unfortunately, these appeals to basic fiscal sanity are running up against the well-oiled lobbying machines of electric utilities, which see this moment of fiscal excess as an opportunity to leverage a taxpayer-funded leg up into the broadband market.
If utilities want to compete fairly to offer middle-mile services or help connect unserved rural homes, more power to them—more competition is a good thing. But instead of competing fairly, utilities are instead stalking Capitol Hill hallways with their hands out, asking taxpayers to pick up the tab for unproductive projects with little to no public benefits.
Common-sense conservatives in Congress must speak with a clear, united voice: Spend taxpayer dollars only where they’re truly needed to wire rural America, and shut down fiscally nonsensical corporate welfare boondoggles.