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Broadband

FCC’s proposed rule on bulk billing takes options away from consumers

In a move that has sparked both debate and concern, the Federal Communications Commission (FCC) put forth a proposal this week to reshape how broadband services are billed in multi-tenant apartment buildings. 

At the heart of this proposal lies the intention to foster competition and drive down costs, yet its potential impact raises significant questions about consumer choice and affordability for people looking to save money and access high speed Internet.

The proposed rule seeks to abolish bulk billing arrangements, where tenants include the cost of broadband services in their rent or homeowner association fees. While the FCC contends that these arrangements hinder competition, evidence suggests they often result in substantial savings for residents – up to 50-60% in some cases.

Vulnerable communities, including seniors and low-income individuals, stand to bear the brunt of these changes. For many of them, bulk billing represents a lifeline to affordable broadband access. Disrupting this system could exacerbate existing disparities in internet connectivity, further marginalizing those who can least afford it and exacerbating the digital divide, which would stand against the FCC’s mission these last few years.

There’s also the broader issue of broadband deployment. By removing incentives for bulk billing, the FCC risks stifling investment in critical infrastructure, particularly in underserved rural areas. 

These arrangements provide Internet Service Providers (ISPs) with the predictability needed to expand their networks, aligning with broader initiatives such as President Biden’s historic push for universal internet access. Without these incentives, deployment could be drastically delayed in underserved areas leaving consumers without reliable and competitive broadband options. 

Additionally, putting a stop to bulk billing threatens to dampen competition by stripping residents and consumers of their ability to collectively achieve cost savings because of concentration of service. With such a large client base, these communities often secure better deals and guarantees, enhancing their overall broadband experience. This loss of bargaining power could undermine efforts to promote a more competitive broadband market, leading to increased prices for these consumers.

While the FCC’s proposal reflects a well-intentioned effort to promote competition and consumer choice, its potential consequences raise concerns about regulatory overreach. Rather than imposing a blanket ban, a more nuanced approach may be needed—one that targets anti-competitive behavior without jeopardizing beneficial agreements between tenants and ISPs.

As the FCC moves forward with its proposed rulemaking, it’s crucial to strike a balance between fostering competition and upholding consumer interests. Empowering consumers and promoting a diverse, competitive broadband market should remain central to the FCC’s regulatory agenda.

Elizabeth Hicks is the US Affairs Analyst at the Consumer Choice Center.

Biden’s Plan for ‘Digital Equity’ Will Soon Lead to Government  Micromanaging ‘Nearly Every Aspect’ of the Internet, FCC Commissioner Warns

‘In the guise of “digital equity,” President Biden has called for the FCC to exercise a degree of control over Internet services and infrastructure that we have never seen before,’ an FCC commissioner tells the Sun.

The Biden administration may soon implement sweeping regulations that would give it control of the internet, analysts are warning ahead of the Federal Communications Commission’s November 15 vote on the proposed rules. 

“In the guise of ‘digital equity,’ President Biden has called for the FCC to exercise a degree of control over Internet services and infrastructure that we have never seen before,” an FCC commissioner, Brendan Carr, tells the Sun in an email. 

“It will give the Administrative State the power to micromanage nearly every aspect of how the Internet works,” he adds. “These types of command and control regulations will only make it harder for Internet infrastructure and services to be built out and could make our networks look more like the sluggish networks that consumers in Europe have to deal with.”

The Democratic-controlled FCC says the new rules would “prevent discrimination in access to broadband services based on income level, race, ethnicity, color, religion, and national origin.”

“We recognize that the ultimate goal of this proceeding is to facilitate equal access to broadband just as the law says,” the FCC chairwoman, Jessica Rosenworcel, says. 

Read the full text here

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Spectrum Allocation Will Fuel America’s Digital Future

Consumers don’t tend to think of data as a finite resource. Instead, the focus of the average smartphone user or online gamer is on how much they’ve paid their wireless provider per month for 5G and “unlimited data.” 

But data is not actually unlimited. There is only so much available, a function of what is known as spectrum allocation. The economic model of supply and demand might as well not be applied here because the United States is doing very little to meet present or future demand.

The pandemic shift toward remote work, at-home learning and online retail shopping has on its own been a huge driver of strain on spectrum network capacity, with nothing to say of the coming needs of AI, self-driving cars, and low-Earth-orbit satellites providing internet. Wireless networks carried more data in 2021 than in the entire seven-year span from 2010 to 2017. 5G home broadband experienced a growth rate 140 times faster than all other home broadband options combined.

If we want greater capacity for our connected devices, 5G on the fly, or even just marginally faster cellular networks, the government will have to massively expand the availability bands for our devices to broadcast and receive.

Earlier this year, Commerce Secretary Gina Raimondo iterated that message, unveiling the beginning of a National Spectrum Strategy, which will aim to define the range of spectrum that becomes available for use, and how it will be doled out.

The National Telecommunications and Information Administration will need to identify 1,500 megahertz of spectrum within the next decade or sooner. It is expected this new radio wave real estate would service autonomous vehicles, smart home devices, and “always-on” internet products powering industry and households alike.

There have been surefire warnings that without additional licensed spectrum, U.S. operators will struggle to meet surging wireless demand, facing a spectrum deficit of 400 MHz within the next five years and 1,400 MHz by 2034.

The 4 GHz (4.4-4.94 GHz) band is pivotal in maximizing 5G potential as this band enables a multitude of advanced 5G use cases, from broadcasting to autonomous vehicles, requiring a mix of coverage and capacity. Moreover, auctioning this band aligns with international harmonization efforts, ensuring that the U.S. remains at the forefront of wireless infrastructure development while delivering lower prices to consumers.

Similarly, the 7/8 GHz band presents an opportunity for further deployment of 5G networks and services. Recent research by NTIA reveals it is nowhere near being fully used by federal incumbents, making it ripe for exploration and auction. In this vein, FCC Chairwoman Jessica Rosenworcel rightly calls for the evaluation of the 7-15 GHz spectrum range to deliver faster speeds and wider coverage. That’s even better.

The higher capacity of the 7 GHz band can enable 5G networks to serve densely populated areas, fostering smart cities and private 5G networks for campuses, manufacturing facilities and other crucial institutions.

Recognizing the early positive benefits of opening up the spectrum will be key to giving entrepreneurs and consumers alike a chance to prosper even further down the road. A National Spectrum Policy should keep all of this in mind while remaining steadfast in empowering consumers and bridging the digital divide.

By prioritizing spectrum allocation for licensed, full-power commercial use, we ensure that consumers have access to reliable, high-speed wireless networks that meet their growing demands. It’s a strategy that fuels economic growth, fosters innovation, and secures America’s position as a global telecommunications leader.

In the age of connectivity, consumers deserve nothing less.

Originally published here

Michigan law makes fight for municipal broadband an uphill battle

For more than a decade, municipalities around the United States have been starting their own government-run broadband networks to bring high-speed internet to their residents. 

They might do so for a variety of reasons: to provide residents faster service at a lower cost, to encourage economic development, to provide high-speed internet to areas that private Internet Service Providers aren’t interested in serving, or to bring more economical connections to urban areas where residents can’t afford the service provided by private ISPs.

But due to laws on the books in Michigan, cities can face significant obstacles in starting their own network.

Michigan is one of 18 states that put restrictions on municipal broadband programs. Under the Metropolitan Extension Telecommunications Rights-of-Way Oversight Act of 2002, public entities can provide telecommunications services only if they have first requested bids for the services and received fewer than three qualified bids. They also must subject themselves to the same terms as those specified in their Request for Proposal.

Read the full text here

Avoid government-run broadband when connecting Michigan residents

Soon, Michigan will be awash with cash to boost broadband coverage.

The Bipartisan Infrastructure Law, signed by President Joe Biden in November 2021, allocates at least $100 million to expand broadband and internet coverage in Michigan. In addition, Gov. Gretchen Whitmer’s office recently announced the state will spend $5.2 million from the federal CARES Act to conduct an audit identifying gaps in high-speed internet access throughout the state.

It is apparent that Michigan residents deserve access to reliable high-speed internet. However, as the state decides how and where to bolster broadband infrastructure, it is critical that they prioritize providing quality broadband service to consumers without wasting taxpayer money through municipal or government-run broadband.

The pandemic has showcased that access to high-speed internet is continuing to become increasingly important as many continue to rely on broadband to stay connected to work, school, telehealth or other crucial facets of daily life.

It’s estimated that 8.9% of Michigan residents live in an area that does not provide acceptable internet speed due to a lack of broadband infrastructure, leaving over $2.5 billion in projected potential economic benefit that is lost among those disconnected from the internet within the state.

To be fair, many small cities across the country are getting the same pitch from biased municipal broadband consultants: If you want faster or more reliable internet, then you should build and operate the network yourself. It might sound promising, but the reality is that these networks have been proven to be expensive and ineffective.

According to a report from the University of Pennsylvania, of the 20 municipal broadband projects in the U.S. they studied, only two earned enough to cover their project costs during the useful life of the networks, with the other 18 being absolute failures.

Existing municipal broadband networks within Michigan are suffering a similar fate. Marshall, for example, launched its own municipal fiber broadband network called FiberNet, which cost $3.1 million in loans from other city accounts. Concerns have been raised about Marshall’s municipal broadband network as the city continuously missed payments on their broadband loans, sparking fear that the network will not be financially viable enough to offset the operating costs, potentially leaving taxpayers on the hook.

For perspective, broadband services from private providers are also available in Marshall. Companies like WOW and AT&T both offer the same speeds as FiberNet, but at lower prices for consumers.

A better solution to close the digital divide in Michigan and help broadband consumers would be to bolster competition. Many private broadband service providers are able to expand or upgrade their services where there is demand, without burdening taxpayers like municipal broadband networks do.

According to a Phoenix Center study, prices in markets with a municipal provider are higher than those in markets without one; therefore having private broadband providers available in an area is even more beneficial for consumers as competition will help keep prices low.

In rural areas or places where demand for broadband services are limited, local regulators could consider issuing vouchers to subsidize service to those who qualify.

Additionally, innovative solutions like Starlink, which aims to provide low-cost satellite broadband internet access across the globe, should be encouraged. This would ensure that all Michigan residents could get connected to reliable internet, without the need for a costly or unreliable municipal broadband network.

As more funding is being allocated to broadband infrastructure, state and local regulators must recognize that municipal broadband networks are generally ineffective and financially irresponsible.

In order to close the digital divide in Michigan and help broadband consumers throughout all parts of the state, we must embrace private competition and only subsidize networks in unserved areas through competitive bidding.

Originally published here

Why Democratic Control of the FCC Won’t Bode Well for Internet Freedom

By Yaël Ossowski

Late Tuesday afternoon, President Joe Biden revealed his nominations to the Federal Communications Commission.

As one would expect, his two nominations — Jessica Rosenworcel and Gigi Sohn — come from Democratic circles and have upheld progressive priorities for telecom policies.

Rosenworcel has been a commissioner since 2012 and served as acting chair since Ajit Pai left at the beginning of Biden’s term. She would be the first female chair of the FCC.

Sohn has been active in left-leaning nonprofits, but also worked as a counselor to former FCC chair Tom Wheeler. She has made a career in advocacy, government, and academia championing “open, affordable, and democratic communications networks,” according to the White House release.

What both nominees represent, if confirmed by the Senate, would be a return to a Democratic-majority FCC intent on revitalizing 2015-era “net neutrality” proposals. Activists are already celebrating a return to progressive policymaking at the nation’s telecom regulator.

While Biden’s nominations are no surprise — every president generally nominates commissioners from their own party — consumer advocates should be worried about the policy goals they will seek to pass.

Net Neutrality

The most pressing would be a reform of Title II regulations through “net neutrality”, effectively labeling Internet Service Providers as public utilities, essentially as protected monopolies.

As I wrote in the Washington Examiner in 2017, the basic premise of net neutrality reforms is to regulate ISPs like water suppliers or telephone companies, subjecting them to more active enforcement, standards, and regulations set by the FCC, so that all online traffic be considered “neutral and free from prioritization”.

What’s more, a Title II classification would treat ISPs are monopolies, which even by the most strained definition, cannot be true. There are close to 3,000 ISPs in the United States, all serving different populations and regions, though some players have larger coverage than others.

Sweeping these companies into the regulatory lens of the FCC under the auspices of public utilities would mean more restrictions and regulations on content and delivery of content on the Internet — a far cry from Internet freedom.

As a general principle for an open net, net neutrality is an important one. When internet providers have been accused of unfairly blocking or throttling consumers, they have rightfully been challenged by lawsuits and enforcement actions from the Federal Trade Commission. And we should generally want a system that won’t discriminate against Internet users based on the content they host or provide (we can also thank Section 230 for liability protections for online platforms).

However, since these regulations were proposed in 2014 under the Obama administration, there has never been a clear rationale provided as to why Internet companies should be regulated under the FCC rather than the FTC, as is the status quo. And from what we can tell, that change would likely impact consumers more than anyone.

For one, a public utility classification would mean much far-reaching power of centralized Internet regulation than exists currently, putting the innovative nature of the Internet at risk.

Providers would be tasked with significant regulatory compliance that would necessitate more administrative costs and fees. This would also threaten the expansion of start-ups and independent companies in the digital space, souring the efforts at creative entrepreneurship. All would be harmful to consumers.

With every successive administration in Washington, we can only imagine that enforcement of the rules and changing of the rules would be enough to create regulatory uncertainty for thousands of online businesses and the users who depend on them.

Second, as our experience from the history of public utilities demonstrates, there would likely be intense consolidation that would empower large companies with the means to comply with regulations and stunt innovative new start-ups. It would also disincentivize increased private investment in broadband services, as we have written about at the Consumer Choice Center, and exacerbate the effects of Biden’s infrastructure proposal on public broadband if it passes this fall.

While consolidation of ISPs is a grave concern to progressive Internet activists, this would only be made worse once a giant bureaucracy such as the FCC is given regulatory authority over them. As my colleague Elizabeth Hicks noted in the Detroit Times, often it is state and local regulations that impede greater competition among ISPs, not because of lax authority at the federal level.

Online Privacy

Both Rosenworcel and Sohn have also indicated that they would support a proposal for greater Internet privacy enforced by the FCC. While that would be great on principle, we would hope that a federal plan would punish bad actors and establish clear guidelines to ensure transparency and protect innovation, as we proposed in our data and consumer privacy policy note.

However, Sohn’s previous public statements, including when she was a fellow at the Open Society Foundation, demonstrate she’d want a wholesale restriction on the sharing of data, even among willing consumers and providers. That would put many vital services at risk.

What’s more, such a proposal would likely aim to further empower government enforcement on data privacy rather than embrace market innovations that already do just that.

Prices

Another significant area where a Democratic-majority FCC could seek action would be on the pricing of Internet services. Sohn has been quite vocal about fixing ISP prices and regulating the bundling of various services. This would undermine the competitive environment of ISPs and likely lead to lower quality and rationed services for users, degrading everyone’s Internet experience.

Sohn’s history at various nonprofit groups that have targeted and lobbied the FCC for more enforcement was indeed impactful, and it is not difficult to see how much of the outrage about net neutrality was due to these efforts. Unfortunately, this also coincided with serious death threats and security concerns for commissioners opposed to these plans.

If both nominees to the FCC are confirmed, it is clear that the battle for the open Internet will once again be relitigated. And if the past proposal is any indication, it will face significant opposition.

At the time of the original net neutrality rules, even the Electronic Frontier Foundation, seen as one of the most powerful Internet freedom groups, was skeptical about how far-reaching the net neutrality provisions were.

We can only imagine that now, buoyed by progressive victories on Capitol Hill and louder voices for regulating content and platforms on the Internet, these proposals will prove harmful to the interests of online users and consumers.

Yaël Ossowski is the deputy director of the Consumer Choice Center.

Coalition Warns Against Broadband Proposals

The Consumer Choice Center joined a coalition of consumer and tax advocacy organizations flagging concerning developments in the infrastructure bill negotiations. Price controls and rate regulation; dramatic expansion of executive brand and agency authority; and government-controlled internet should never be on the table.

You can read the letter below or click HERE for a full version:

July 23, 2021

RE: Broadband Infrastructure Spending

Dear Senators:

We write to you today over some concerning developments in the bipartisan infrastructure negotiations on broadband. We are guided by the principles of limited government and believe that the flaws in the infrastructure framework go well beyond the issues discussed here. Nonetheless, our present aim is to advocate specifically against proposals that would enact price controls, dramatically expand agency authority, and prioritize government-controlled internet. 

The infrastructure plan should not include rate regulation of broadband services. Congress should not authorize any federal or governmental body to set the price of any broadband offering. Even steps that open the door to rate regulation of broadband services will prove harmful in the long run.  

Nor should Congress continue to abdicate its oversight responsibilities to executive branch agencies like the National Telecommunications and Information Administration. Giving NTIA unchecked authority to modify or waive requirements, renders all guardrails placed by Congress meaningless. There must be oversight of the programs to ensure that taxpayer dollars go toward connecting more Americans to broadband as opposed to wasteful pet projects. 

Historically, attempts by NTIA to close the digital divide through discretionary grants have failed, leading to wasteful overbuilds, corruption, and improper expenditures. The American Recovery and Reinvestment Act of 2009 created the $4 billion Broadband Technology Opportunities Program (BTOP) grant program administered by NTIA. From 2009, when BTOP was instituted, to 2017, at least one-third of all the reports made by the Inspector General for the Department of Commerce were related to the BTOP program, and census data showed that the BTOP program had no positive effect on broadband adoption. And this was with only $4 billion in taxpayer dollars. We cannot afford to make the same mistake with much greater sums.

Legislation must be clear and not create ambiguities that are left to the whims of regulators. While “digital redlining” is unacceptable, the FCC should not be allowed to define the term however it sees fit and promulgate any regulations it thinks will solve problems—real or imagined. Doing so would give the agency carte blanche to regulate and micromanage broadband in any way it desires. This would be an egregious expansion of FCC authority. Moreover, definitions and regulations could change whenever party control of the agency changes, leading to a back-and-forth that creates uncertainty for consumers and businesses. 

Legitimate desire to ensure that low-income Americans have access to broadband infrastructure should not be used as a smokescreen to codify aspects of the recent Executive Order on Competition, which should not be included in any bipartisan infrastructure agreement. Republicans fought hard to support the FCC’s Restoring Internet Freedom Order. Any legislating on the functions and deployment of Internet technologies must move as a standalone bill through regular order with committee review. These questions are far too important to shoehorn into a massive bill without rigorous debate.   

Any funding for broadband buildout must target locations without any broadband connection first, and this should be determined by the Congressionally mandated FCC broadband maps. Congress has oversight over the FCC and the FCC has already conducted several reverse auctions. Reverse auctions get the most out of each taxpayer dollar towards closing the digital divide. Areas where there is already a commitment from a carrier to build out a network, should not be considered for grants, and the NTIA should not be able to override the FCC’s map to redefine “unserved” and subsidize duplicative builds.  

Government-controlled Internet should not be prioritized in any grant program. With few exceptions, government-owned networks (GONs) have been abject failures. For example, KentuckyWired is a 3,000-mile GON that was sold to taxpayers as a $350 million project that would be complete by spring of 2016. Those projections could not have been more wrong.   More than five years past the supposed completion date, fiber construction for KentuckyWired is still “in progress” in some parts of the state and a report from the state auditor has concluded that taxpayers will end up wasting a whopping $1.5 billion on this redundant “government owned network” over its 30-year life. NTIA should certainly not encourage these failures to be replicated.

We appreciate your work to help close the digital divide and agree that access to reliable internet is a priority, however we should not use this need to serve as a cover for unnecessary government expansion. Please feel free to reach out to any of the undersigned organizations or individuals should you have questions or comments. 

Regards,

Grover G. Norquist
President
Americans for Tax Reform

Jennifer Huddleston*
Director of Technology & Innovation Policy
American Action Forum

Phil Kerpen
President
American Commitment

Krisztina Pusok, Ph. D.
Director
American Consumer Institute
Center for Citizen Research

Brent Wm. Gardner
Chief Government Affairs Officer
Americans for Prosperity

Jeffrey Mazzella
President
Center for Individual Freedom

Andrew F. Quinlan
President
Center for Freedom and Prosperity

Jessica Melugin
Director Center for Technology and Innovation
Competitive Enterprise Institute

Matthew Kandrach
President
Consumer Action for a Strong Economy

Yaël Ossowski
Deputy Director
Consumer Choice Center

Roslyn Layton, PhD
Founder
China Tech Threat

Ashley Baker
Director of Public Policy
The Committee for Justice

Tom Schatz
President
Council for Citizens Against Government Waste

Katie McAuliffe
Executive Director
Digital Liberty

Annette Thompson Meeks
CEO
Freedom Foundation of Minnesota

Adam Brandon
President
FreedomWorks

George Landrith
President
Frontiers of Freedom

Garrett Bess
Vice President
Heritage Action for America

Carrie Lukas
President
Independent Women’s Forum

Heather Higgins
CEO
Independent Women’s Voice

Tom Giovanetti
President
Institute for Policy Innovation

Ted Bolema
Executive Director
Institute for the Study of Economic Growth

Seton Motley
President
Less Government

Zach Graves
Head of Policy
Lincoln Network

Matthew Gagnon
Chief Executive Officer
Maine Policy Institute

Matthew Nicaud
Tech Policy Specialist
Mississippi Center for Public Policy

Brandon Arnold
Executive Vice President
National Taxpayers Union

Tom Hebert
Executive Director
Open Competition Center

Ellen Weaver
President & CEO
Palmetto Promise Institute

Eric Peterson
Director
Pelican Center for Technology and Innovation

Lorenzo Montanari
Executive Director
Property Rights Alliance

Jeffrey Westling
Resident Fellow, Technology & Innovation Policy
R Street Institute

James L. Martin
Founder/Chairman
60 Plus Association

Saulius “Saul” Anuzis
President
60 Plus Association

David Williams
President
Taxpayers Protection Alliance

Dann Mead Smith
President
Washington Policy enter

Mark Harmsworth
Small Business Director
Washington Policy Center

If president’s goal is high-speed internet for all, government regulations still stand in the way

The COVID-19 pandemic has, if nothing else, demonstrated the need for high-speed internet service.

It was shown in schools as teachers sought to instruct students via remote learning. It was shown in businesses as they sought to bolster their online presence. It was shown in everyone who learned about Zoom meetings for the first time back in March 2020 and now probably can’t imagine everyday life without them.

President Joe Biden and many members of Congress recognize that. That’s why, as part of the president’s American Jobs Plan, it’s been proposed to spend $100 billion to bring high-speed broadband service to every American.

But is throwing more tax dollars at the situation really the best solution?

Yael Ossowski, deputy director of the Consumer Choice Center in Washington, D.C., doesn’t think so. He argues that simply spending money won’t address the real challenges — the myriad of different rules between municipalities and states overseeing internet infrastructure that serve as a true barrier to getting more Americans connected.

Mr. Ossowski points to a recent study by the Federal Communications Commission that found more than 700 examples of laws and statutes that hamstring internet providers before they can connect one home. These include ambiguity on application processes, high permit fees for networks, slow approval processes and burdensome rules.

A different study, this one done by the University of Pennsylvania, found that local government internet utilities — which are prevalent in some parts of the nation as compared to private firms providing the service — are often too expensive to maintain.

Plus, there’s the assumption in the president’s plan that the solution centers on primarily focusing on broadband fiber connections. An argument can be made that investments in mobile and satellite networks are worthy of consideration, too. But those efforts also have been hampered by burdensome government regulations.

What is clear is that as mobile networks expand and speeds improve, and as fiber technology makes it way to more rural areas across the nation, more Americans will be connected to faster and better internet. However, in order to do that, what’s needed is a focus on the power of private investment, clear regulatory rules, and the removal of red tape. This is another case of where those in Washington, D.C., may have good intentions and the ability to do some good, they don’t have a stranglehold on the best ideas.

Originally published here.

Biden’s broadband plan may hurt providers, consumers

It is no secret that access to reliable, high-speed internet is more important now than ever before, especially given how we spent this past year. We now rely heavily on virtual connections for school, work and perhaps a few never-ending Netflix marathons in an attempt to stay sane throughout lockdowns.

With a more online life, it’s not surprising that broadband usage increased 40% over the last year. Many suspect this level of demand for broadband will continue, but there are millions of individuals across the country who do not yet have access, including 368,000 rural Michigan households.

It’s estimated that there is over $2.5 billion in potential economic benefit that is lost among Michigan residents disconnected from the internet, making it clear that we need to find a solution to end this digital divide.

President Joe Biden recently proposed $100 billion to expand broadband through the American Jobs Plan. While this may seem like a worthy infrastructural investment to some, the fine print of the plan proposes lackluster solutions that create a stormy future for Michigan consumers.

A glaring issue is the prioritization of government-run broadband networks with “less pressure to turn profits and with a commitment to serving entire communities.” It’s well documented that these networks are ineffective 𑁋 a Phoenix Center study found that prices in markets with a municipal provider are higher than those in markets without one.

Michigan allows municipal broadband networks only in unserved or underserved areas and if their benefits outweigh the costs. However, local governments have been giving municipal networks advantages over private providers by providing subsidies and privileged regulatory treatment to showcase the illusion of compliance.

This happened recently in Marshall, and the results were dreadful. According to a report released by the Taxpayers Protection Alliance highlighting failed government-run broadband networks, Marshall’s fiber broadband network, called FiberNet, cost $3.1 million and serves only a fraction of its population. It’s worth noting that private broadband services are also available in Marshall.

Another key issue with Biden’s plan is that it exclusively prioritizes building out fiber broadband. While fiber may be a great option for some, it’s not always practical for rural communities due to the high costs and installation process required. Rural households can be located miles apart, and with fiber installation costing as high as $27,000/per mile, the estimated demand from rural communities often does not offset the costs of building fiber networks in those areas.

Innovative solutions like Elon Musk’s Starlink project, which aims to provide low-cost satellite broadband internet access across the globe, should be encouraged. By the end of this year, there will be over 1,000 satellites providing internet to more than 10,000 customers worldwide through Starlink. This is an exciting development because satellite networks are often cheaper, more efficient and can provide faster speeds to rural households than fiber.

The final major issue with Biden’s plan is that it vows to get America to 100% broadband coverage, but this doesn’t take into account all consumer preferences. According to Pew Research, 15% of Americans rely on smartphones and don’t have broadband services. Although it’s not certain as to why, one potential reason is the frequency of free Wi-Fi available in many public spaces which may result in some households opting out of paying for broadband.

To help Michigan live up to its full economic potential, it’s crucial that we get the 368,000 rural households access to high speed internet quickly. The state should embrace private internet service providers, practice technology neutrality by not favoring one broadband type over another and encourage more innovations that benefit consumers.

Originally published here.

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