Broadband networks and services drive the national and global economies. Ubiquitous deployment of next-generation broadband networks will raise standards of living and bring major advances in education, healthcare, teleworking, e-commerce, public safety and security. Policymakers must ensure that service providers are incentivized to deploy and upgrade broadband networks, that networks can be promptly and efficiently deployed, and that the digital divide is closed by supporting universal access to high-quality broadband for all Americans.
Funding and Incentives
Any broadband funding or incentive policy must be targeted to address three independent challenges that the United States is facing today:
- Reaching unserved areas: The FCC has established 25 Mbps download / 3 Mbps upload as a national minimum definition for broadband service. In 2015 nearly half of fixed connections did not meet this standard of service, even as wireless and satellite offerings are emerging that can play a role in addressing these needs in the most remote areas.
- Increasing service to underserved areas: Service of at least 100 Mbps / 10 Mbps is now widely offered in many urban and suburban areas, and is essential to meet modern needs for businesses and consumers alike – whether a family with multiple users in a home or businesses seeking to collaborate. Many cable providers now regularly offer broadband service meeting these levels, but only 15% of fixed connections met this level in 2015.
- Preparing for the future: Gigabit service offerings (at least 1000 Mbps download / 50 Mbps upload) have rapidly emerged in urban areas as fiber deployments have increased either to the home or node. Gigabit service is rapidly becoming the new standard of excellence to meet today’s needs, while promoting innovation and national preparedness for the emerging needs of the future.
In order to meet these challenges, policymakers should implement a combination of the following options:
- Tax incentives: Congress should adopt a three-tiered system of tax incentives, including the option of expensing or a tax credit, to address each of the three core needs described above.
- Grants: Direct spending is an essential component of broadband deployment. Moreover, grants are preferred over loans because in general, programs offering loan guarantees or subsidies will have a less significant impact than direct grants, particularly in a low-interest-rate environment. However, any grant programs should adopt a technology-neutral approach.
- Targeted spending programs: Broadband access can be achieved in conjunction with other specific policy goals, such as ensuring that community anchor institutions have robust broadband access, providing wireless internet access in all federal buildings, or providing displaced workers with one-time subsidies for obtaining broadband internet access or for remote job training.
- Bonds: The Build America Bonds program in the 2009 Recovery Act provided a new tool for municipal financing, and Congress should also authorize network operators to issue private tax credit bonds to fund broadband infrastructure deployment.
Removing Regulatory Obstacles
Small cell and 5G deployments are expected to form a critical part of next-generation wireless infrastructure, providing benefits to consumers and businesses, boosting the Internet of Things, and creating jobs. Such networks require greater network densification and a need for much greater levels of backhaul infrastructure vs. previous technologies. Yet the path for deployment is very uneven across the country depending upon state and local rules, including moratoria, delays, differential treatment for new entrants, arbitrary zoning rules and exorbitantly high fees.
To address these challenges and promote infrastructure deployment, policymakers should implement the following:
- Streamlined federal processes: Congress should act to improve siting on federal lands, accelerate the environmental review process, require GSA to adopt a common form for siting applications, and take further actions to promote broadband deployment at the federal level.
- Streamlined state & local processes: Congress and the FCC can help streamline state & local facility siting processes. This includes development of best practices for state and local governments to follow, clarifying the FCC’s legal authority, limiting cost recovery to reasonable amounts, and addressing delays through imposition of shot clocks and “deemed-granted” remedies.
- Dig-once: Lack of coordination between broadband and other infrastructure projects wastes time and resources, particularly when roads are being built or maintained. Ninety percent of the cost of deploying broadband in certain projects occurs when the work requires significant excavation of the roadway, while a “dig-once” policy can reduce the cost of deploying fiber under highways in urban areas up to 33 percent and up to 16 percent in rural areas. Policymakers should fully embrace a dig-once rule requiring installation of conduits for broadband equipment whenever roads are being dug up.