Letter for the Record: House SBC Hearing on “Supporting Small Entities through Investments in the National Infrastructure: Broadband”

By SBE Council at 16 June, 2021, 2:36 pm

The Honorable Jared Golden

Chairman

Subcommittee on Underserved, Agricultural and Rural Business Development

Committee on Small Business

U.S. House of Representatives

The Honorable Jim Hagedorn

Ranking Member

Subcommittee on Underserved, Agricultural and Rural Business Development

Committee on Small Business

U.S. House of Representatives

Dear Chairman Golden and Ranking Member Hagedorn:

On behalf of the Small Business & Entrepreneurship Council (SBE Council) and our nationwide membership of small business owners and entrepreneurs, I am writing to thank you for your focus on broadband infrastructure in today’s hearing. Access to broadband is essential to small business growth and success in the digital economy and for entrepreneurial opportunity for every American wishing to pursue their dream of business ownership. SBE Council has long supported efforts by Congress and the Federal Communications Commission (FCC) to close the digital divide and ensure every American is digitally connected.

As committee members well know, small businesses were hit very, very hard by COVID-19. Most continue to dig out of their revenue holes from the past year, and ramping up has been more difficult due to labor and supply chain shortages and disruptions, and the higher cost of doing business in general. With broadband’s help, many small businesses pivoted to online tools and models to adapt, communicate and survive during the COVID-19 crisis, and these same tools are helping them better weather the recovery. But small businesses lacking broadband access, lack this key option for survival and recovery.

Many small businesses in rural and underserved areas do not have the broadband connectivity necessary to conduct e-commerce, engage online with customers or clients, use collaborative platforms to communicate with peers and/or employees, or provide virtual services – all of which serve as a lifeline and can potentially drive needed revenues and new opportunities.

While there are efforts are underway to help close the digital divide through programs such as the Rural Digital Opportunity Fund and previous steps to accelerate 5G deployment and incentivize private investment, Congress and the Biden Administration must review key facts as a starting point for appropriating tax dollars into a big infrastructure package. As documented by various studies, private sector investment has led to lower costs and higher speeds.

In fact, the cost of broadband is 20.2% less than in 2015, and speeds are 15.7% faster. And Americans are paying less for broadband in 2021 than they did in 2020.

So it is clear that the vast sums of investment made by private sector providers continue to yield lower prices, faster speeds and have brought Americans the strong and innovative networks that withstood the demands of the pandemic and continue to carry our economy forward. A flexible regulatory framework moving forward, and strong collaboration between the federal government and the private sector, can continue to drive billions more in private-sector investment, which will lead to steady deployment, higher speeds, lower prices, more choices and innovative technologies for small businesses and all consumers.

Directing tax dollars to government-owned and managed networks for redundant infrastructure, as the Biden Administration proposes, would be a waste of tax dollars and do little to lower cost and increase broadband access or adoption. In fact, consumers pay higher prices for broadband in cities with a municipal provider than those without one. But most importantly, efforts need to focus on deploying broadband to communities that have no broadband. Again, it would be a waste of tax dollars to shovel vast sums of tax dollars to poorly performing local government networks where broadband is available rather than to communities that lack connectivity.

In terms of improving access through greater affordability to low-income households, SBE Council has long urged Congress to restructure the Universal Service Fund (USF) program, as I outlined in my comments to the Federal Communications Commission (FCC) on the Emergency Broadband Benefit program.

Furthermore, I would like to point out that the majority of businesses within the telecommunication sector are small businesses. In fact, among employer firms in this sector, 83.8 percent have fewer than 20 employees, and 95.0 percent fewer than 100 employees. These small businesses should have the opportunity to participate in deploying broadband through a federal infrastructure package, but measures such as project labor agreements or the inclusion of the PRO Act, would disqualify many of these competent firms.

Government initiatives must focus on what’s working, such as incentivizing private sector investment and innovation, and fix what needs modernizing, such as restructuring the USF – to close the digital divide and improve digital adoption and literacy. There is an opportunity to close the digital divide in America and bring economic development and entrepreneurial opportunity to every corner of the nation. A smart infrastructure package that targets those without broadband access could finally accomplish this goal.

Thank you for the opportunity to submit our thoughts, and please do not hesitate to contact SBE Council for questions.

Sincerely,

Karen Kerrigan, President & CEO

cc:        The Honorable Nydia Velazquez, Chairwoman

The Honorable Blaine Luetkemeyer