US government spends $ 42.5 billion to own the ‘new Internet’

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Under the pretext of bridging the “digital divide” between the poor and everyone else, the so-called two-party $ 1.2 trillion infrastructure bill would allocate $ 65 billion to expand and improve broadband across the country.

All the Democrats and some Republicans in the The Senate voted for. Currently, the measure is in the US House pending action.

The 2,700-page infrastructure invoice funds things like monthly $ 50 credits for low-income Americans pay for internet access, and provides grants for “the construction, improvement or acquisition of intermediate infrastructure”, among others.

However, the bulk of the funding – $ 42 billion – would create government-owned networks, or GONs.

Former Federal Communications Commission (FCC) Chairman and current Internet & Television Association (NCTA) CEO Michael Powell said Axes the proposal, is “surprisingly Soviet”.

The $ 42 billion will go directly to states and be used to create these GONs, which proponents argue are necessary because the private sector will not build them.

But private broadband providers have spent more than $ 1.6 trillion since 1996 to build and upgrade networks, a 71% growth in rural broadband, according to the Taxpayers Protection Alliance.

GONs are nothing new – over the past decade there have been many examples of these networks being offered in municipalities and states, some of which never got off the ground, while others have been bogged down in the corruption and scandal, according to Reason.

Many of the existing GONs are nearly obsolete as 5G wireless connections and other private sector innovations offer better prices and speeds.

So why spend tax dollars to create new GONs when the private sector seems to have the job covered?

The Biden administration is serious about the government that owns the new Internet. Earlier this year, Biden proposed $ 100 billion in government ownership of broadband.

In fact, of the 560 White House employees, the second highest paid is broadband czar Elizabeth Hone, the senior broadband policy adviser, who earns $ 183,164 a year.

Under the infrastructure provision passed by the Senate, states would get the funding, with priority going to projects run by state and local governments or non-profit organizations, which are making plans to “deploy broadband, bridge the digital divide and improve economic growth and employment creation. “

In other words, the federal government wants to take care of providing Internet services and wants to oust the private sector.

Saying, “High speed internet is the new electricity,” President Joe Biden’s White House fact sheet highlighted the Rural Electrification Law of 1936 which applied power lines to every house and farm in the country. This effort took place 85 years ago, still six years before President Biden was even born.

Since, according to the White House, “more than 30 million Americans live in areas where there is no broadband infrastructure offering minimally acceptable speeds”, the government must now, according to them, intervene. .

But this figure is incorrect. FCC says that by 2020, about 14 million Americans, living in 4.3 million homes, did not have high-speed internet access with acceptable speeds. And that number of 4.3 million households is down 20% from the previous year’s figures.

While the “digital divide” is still a problem, this divide is likely to continue to narrow without “help” from government.

The real difference in numbers seems to be related to the changed definition of “broadband”.

The bill passed by the Senate identifies a household as “underserved” if it does not have access to an Internet connection with download speeds of 100 megabits per second and download speeds of 20 megabits per second.

But the FCC defines broadband as having speeds of 25 megabits per second and download speeds of three megabits per second.

No wonder the White House and Congress are determined to use a different definition – without it, there is no crisis of the digital divide that requires the government to step in and correct.


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