PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

ACCESS DENIED? NTIA’s Plan for Broadband Deployment May Barely Close the Digital Divide

By at 10 June, 2022, 8:52 am

By Karen Kerrigan –

Access to broadband is essential to modern entrepreneurship and small business creation. The tools of, and participation in, the digital economy is essential to business growth and operations, productivity and competitiveness. And that is why SBE Council has remained a lead advocate for policies that encourage and strengthen investment in broadband deployment, and private sector initiatives that foster connectivity and innovation.

As I noted in our February 2022 comments to the National Telecommunications and Information Administration (NTIA) about the implementation of the Infrastructure Investment and Jobs Act (IIJA) as it relates to broadband buildout and access:

“The broadband piece of the infrastructure package is extraordinarily important to businesses lacking access, and for economic development in areas of the nation that are not digitally connected. Access to digital tools and the digital economy will open new markets for inclusive entrepreneurial opportunities and small business growth.”

In order for the $65 billion in taxpayer resources dedicated to broadband infrastructure within the IIJA (of which $48.2 billion will be administered by NTIA’s newly established Office of Internet Connectivity and Growth via the Broadband, Equity, Access and Deployment (BEAD) program) to make a difference for small businesses, households and communities that lack broadband access, those funds must be allocated effectively and utilized efficiently.

Thankfully, several U.S. Senators made this point clear in a Senate Commerce Committee oversight hearing on June 9 with NTIA chief Alan Davidson regarding the framework his agency recently established for how billions in funds will be distributed. Unfortunately, NTIA’s Notice of Funding Opportunity (NOFO) appears to ignore important bipartisan terms negotiated in the IIJA and includes conditions and restrictions that will lead to waste, higher costs, and the ineffectual use of the funds dedicated toward this important national effort. These conditions include labor union favoritism for projects, a preference for government-owned and operated networks, possible rate regulation, the preference for specific technology, and “net neutrality” language.

As noted by Senator Deb Fischer (R-Neb.) at the hearing, “With each of these added objectives you’re making margins thinner and you’re increasing costs which means less money for deployment.”

With regard to NTIA’s requirement that broadband providers offer a low-income option, Senator Roger Wicker (R-Miss.) expressed the concern that this “could lead to rate regulation, something we have specifically prohibited in the [IIJA].” Senator John Thune (R-S.D.) added that this requirement is a type of “price control [and] de facto rate regulation.” Davidson responded that NTIA’s requirements do not set prices.

Perhaps not explicitly – that is, an exact price. But the language certainly can be taken to mean that and implemented in that way by the states or localities.

Moreover, Senator Thune pointed out that NTIA is “Prioritizing government-run networks and non-traditional providers with no proven track record.”

These valid concerns are all points various groups, including SBE Council, counseled against during the NTIA’s comment period as they were crafting the NOFO rules. Again, as I noted in my comments, it was important for NTIA to follow the letter and bipartisan spirit of the IIJA and “adopt simple, transparent rules and common-sense principles to ensure the effectiveness of these programs, and to avoid waste and abuse of funds.”

These rules should promote:

● Uniformity across states to ensure consistency,

● Transparency and strong accountability in the use and deployment of funds,

● Partnerships with reliable providers,

● Adherence to the guardrails included in IIJA, including no mandates and creative restrictions – the focus must be on access and adoption,

● USF reform driven by user-friendly features for consumers that are uniform, simple, provide choice, and allow for low-cost offerings as a qualifying plan,

● And simplicity and clarity in the rules in general to ensure deployment and access occur with reasonable speed.

Many small businesses across America are counting on this program to deliver. Given the quality and reliability of our nation’s broadband providers – both large and small – backed by an efficient NOFO process and transparent framework, along with uniformity and sticking to what Congress advanced and intended through IIJA, SBE Council believes this promise can be met. But the current NOFO plan barely resembles the bipartisan package passed by Congress. We agree with FCC Commissioner Brendan Carr in his assessment of the NOFO rules, specifically that they will waste taxpayer dollars and leave families “on the wrong side of the digital divide.” He stated:

“The Commerce Department rules [also] pursue a mélange of extraneous political objectives that are unrelated to connecting Americans today. They include undue preferences for labor unions, government-run networks, and a Byzantine application process that will invite the imposition of additional conditions unrelated to quickly delivering high-speed service. In the end, the Administration’s decision to pursue those political goals – rather than focusing on connecting the largest number of people as quickly as possible -will exacerbate the supply chain challenges and workforce shortages that already pose a hurdle to getting the job done.”

This outcome is certainly not what our economy, small businesses, and those lacking digital connectivity need during this challenging period of time. It’s unfortunate that the NTIA has taken an extraordinary opportunity to connect the unconnected to the digital world, and turned it into a messy policy and political framework that benefits certain groups and activists at the expense of taxpayers and the digitally unserved. Congress must continue to press NTIA to implement and follow the bipartisan spirit and text of the IIJA, not the activists and special interests who appear to have taken over broadband infrastructure implementation.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.  

 

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