On September 27, AEI hosted an event on federal broadband policies, featuring a conversation between AEI’s Mark Jamison and the Federal Communications Commission’s Brendan Carr and a panel featuring INCOMPAS’s Angie Kronenberg, AEI’s Daniel Lyons, Bonfire Infrastructure Group’s Jade Piros de Carvalho, and Technology Policy Institute’s Scott J. Wallsten.

The group set out to discuss the Broadband Equity, Access, and Deployment (BEAD) Program, which was established in November 2021 as part of the Infrastructure Investment and Jobs Act with $42.45 billion allocated to expand high-speed internet access across the United States. The program’s primary mission is to support states and territories in bringing reliable, affordable broadband service to unserved and underserved communities, particularly focusing on rural and tribal areas. NTIA began accepting state applications for BEAD funding in 2022, however, the arduous process and other obstacles led to significant delays. Most communities will not see benefits until 2025 at the earliest.

Below is an edited and abridged version of key highlights from the discussions. You can watch the full event on AEI.org and read the full transcript here. 

Mark Jamison: There are 133 federal broadband programs run by 15 agencies and costing billions of dollars. When you include state broadband offices, the number of agencies approaches 70. The most significant program as of late is BEAD, launched in the 2021 by the Infrastructure Investment and Jobs Act. The NTIA oversees this $42.5 billion effort, which states are implementing.

With so much money at stake, so many programs and so many government agencies involved, one would be right to assume that there are some problems. Commissioner Carr, you have spoken numerous times about problems created by the fragmentation and sometimes dysfunction in America’s broadband efforts. I’d like to get your views on this, starting with the $42.5 billion BEAD program. What’s going on there and why?

Brendan Carr: In my perspective, it’s a program that has gone off the rails. And I think that’s a shame, because every single one of us that are in this space, certainly every single one of us on the commission, are here for a pretty simple reason: We believe in getting high-speed internet access to every single American. Everybody on the agency I think has been committed to that. Congress actually put the resources that would be necessary to complete the job to bear.

Here we are at day 1,047, and we have connected exactly zero people. Not one home has been connected through that program, not one business. And in fact, there are no construction projects that are even underway. The administration is now saying that the first ones won’t start until sometime next year, at the earliest.

I think we need to streamline this program. In my view, we’ve got to get rid of the diversity, equity, and inclusion requirements that have been added in, get rid of the climate change provisions that have been added, and frankly, get rid of some of the technology bias.

Mark Jamison: Let me turn now to some of the FCC’s [Federal Communications Commission] programs. Some of them are facing challenges as well. I’m thinking of the constitutional challenge to the funding of the Universal Service Fund and the lack of congressional funding for the Affordable Connectivity Program (ACP).

Brendan Carr: ACP was a program where, you know, we spent somewhere in the neighborhood of $20 billion to address the affordability portion of the digital divide. The FCC’s own survey data showed that about 15 percent of people, of households that were on ACP, said that they would lack internet access were it not for ACP. And so that data that the FCC was pulling showed that we didn’t quite have it tailored exactly right to the problem.

Let’s focus in on that 15 percent and let’s have a conversation about how we can tailor an appropriate program to the needs of those communities. I’m not here to say that any particular program, whether it was the American Rescue Plan (ARPA) before, BEAD, or the Rural Digital Opportunity Fund (RDOF), is perfect, but some of the criticisms of RDOF are a bit puzzling to me.

Someone recently was saying that RDOF was funding things like Fisherman’s Wharf in San Francisco and Apple’s HQ. But the reality is that RDOF had a mechanism on the back end where, in fact, we haven’t ended up funding those areas that were cited at all. It’s interesting because BEAD, the $42 billion program, is expressly set up to overbuild existing networks. In 100 percent of the cases where you have unlicensed fixed wireless, you can be overbuilt.

Mark Jamison: The FCC has a lot of other issues that relate to broadband. Would you mind talking about some of those that are affecting broadband? And what are your hopes for some of those programs or some of those efforts?

Brendan Carr: Our main program is run out of the Universal Service Fund. That’s a $9 billion-a-year program. We fund it through what we call it an assessment. Some people are arguing that it’s a tax. I’ll leave that to the courts to decide. But effectively, we put a percentage assessment on your traditional telephone bill. That’s how we get the $9 billion. And that program, at least the funding mechanism is really stuck in a death spiral. My view is that if we are going to have it, we should rationalize how that’s paid in.

Mark Jamison: There are targeting challenges with the funding of infrastructure providers to build in different places. RDOF, USF has had that problem. BEAD, once the money starts rolling, will probably have that problem as well. How is it that we can better target?

Brendan Carr: The FCC’s maps probably give us the best shot yet of doing this in a coordinated way. And there are some issues there. We stood up this National Broadband Map, which took a while since we were waiting for funding from Congress that didn’t come in until December of 2020. And that map was used to make the allocation of funding across the different states. But the states are not required to use that map when they do their bills. And that doesn’t make a lot of sense: We spent all this money to make sure we have this National Broadband Map. It shows you where there’s connectivity, where there’s not. There’s issues around the edges, sure, but the agency is working on that. But now we don’t have people being required to use that map.

Congress also passed a pretty good bill, I think Senator Fisher was on this bill, where there was a specific funding map that was stood up so you could see all the different funding programs funneled into a single map to help avoid overbuilding. But my understanding is not every agency is actually feeding their infrastructure data into that map. So, if we really stood that map up in a robust way, effectively compel these other agencies to do it, that would be a good thing.

Mark Jamison: What should people expect from the FCC or from FCC commissioners to find common ground?

Brendan Carr: The FCC has been able to show independence over the years. I mean, if you go back to when Chairman Pai was leading the agency, he got at least one, if not more, message from the President at the time on Twitter that disagreed with some of the decisions that Chairman Pai was making. But he made the best decisions that he could.

The American people made a decision, rightly or wrongly, to have a divided Congress with a Republican House and a Democratic Senate. The result of that is, they have decided there shouldn’t be a lot of new laws that pass. And yet, at the agency level, there are thousands and thousands and thousands of regulations that are churning out, whether it’s bipartisan votes or partisan three-two votes.

Mark Jamison: Angie, You’ve seen the FCC’s work on broadband development from both the inside and the outside. How would you assess the agency’s programs and the directions they are going?

Angie Kronenberg: In 2010, at the direction of Congress, the National Broadband Plan was released by the FCC. A significant part of the recommendations that the FCC made was that the Universal Service Fund that was supporting universal telephone service needed to be modified and modernized, so that it could support universal broadband service.

And then 10 years later, 2020, what happens? We have a pandemic. And it’s as though it awakened policymakers from their slumber. They knew that they needed to do something, and on a bipartisan basis, Congress sprang into action,

All these efforts, Congress recognized, were needed. And I should say, “Yay, finally!” Right? Because the FCC had told Congress back in 2010 that the USF wasn’t going to be able to accomplish it alone. But it really took the pandemic to waken people, for them to realize that that was the case.

When we were in negotiations, we saw that BEAD was going to take a long time to implement. I personally pointed out to the staffers. I was like, “Guys, this is going to take a really long time, you realize this?” And they’re like, “Yes, we do.” It was a very deliberative process, directly in response to lessons learned, which also included that we had not been spending enough to really meet the needs here in the US.

Mark Jamison: Jade, BEAD has taken a lot of heat for a lot of different reasons, from many different quarters, including from me, but you have a unique perspective on this. You’ve run a state effort with and without BEAD, and now you’re working for a company that builds broadband. What do you see as BEAD’s strengths and weaknesses?

Jade Piros de Carvalho: I think BEAD gets a lot right. It represents this extraordinary opportunity to completely bridge the digital divide. It’s an ambitious program, with the noble goal of universal service. So I think the universal service goal is one thing it gets right. Former plans have allowed cherry picking of easier-to-serve areas, which inadvertently exacerbated these digital gaps in the most rural areas. States were required to do a planning process, and they conducted on-the-ground input sessions to gather public feedback and factor the needs of the end consumer into the plans they produced. And lastly, I see the fiber-forward approach of the program as a strength, because BEAD does offer states sufficient flexibility to toggle their technology mix as needed to get to that universal service goal.

There are some weaknesses of the program. While congressional intent was to make this a state-driven process, it has turned into a very prescriptive checklist that doesn’t allow states to execute the plans they designed with their residents in mind. There are layers and layers of hurdles added to the approval of state plans that constantly move the goalpost of getting the money out the door. So while I appreciate the intentionality of it, I think the pendulum may have swung a bit far. If the states were empowered a little bit . . . empowered with a little bit more flexibility, I do think we’d have greater success just getting this off the ground and getting homes connected.

Mark Jamison: Daniel, give us your understanding as a legal scholar of the funding challenges we have with the Universal Service Fund and what should be done with ACP?

Daniel Lyons: On the Universal Service Fund side, as Commissioner Carr explained, the program is funded by a surcharge on interstate telecommunications revenue. But almost since its inception, the cost of the program has grown, while the base that’s assessed for funding the program has been shrinking.

You grow the numerator, you shrink the denominator, and the surcharge grows over time, from three percent in 1998 to a whopping 35.8 percent today. So everyone agrees that the funding mechanism is broken. And as you mentioned earlier, the Fifth Circuit suggested it may also be illegal.

The debate now is over how to solve it. Commissioner Carr referenced the idea of expanding the base of contributors to include big internet-based companies that benefit from providing connectivity to their consumers. I think that’s one good idea. My preference is to make the Universal Service Fund a line item in the federal budget.

On the affordability side, I think there’s a pretty strong bipartisan coalition that supports the idea that we should be providing a subsidy for low-income families that are not online to get online. And the challenge there is, how do you target that subsidy correctly? If ACP’s goal is to identify families that are not online and get them online, somewhere between 80 and 85 percent of that money was not going to close the digital divide. It was instead going to subsidize families that were not really at risk of dropping off the network without the subsidy.

We need to do more study on what are the drivers of low-income non-adoption. Who are the families that aren’t online? Why are they not online? And to target only that segment of the population as much as possible for the right amount of relief that we get them online and actually close the digital divide.

Mark Jamison: Scott, we keep repeating mistakes of the past. How should we go about evaluating programs and let what we learn become something that directs us for the future? How do we learn about successes, failures, and problems, so we can do a better job next time?

Scott J. Wallsten: The first point is that, evaluation is not the same thing as compliance. And I think policy and policymakers confuse those two things all the time. Compliance is to make sure that there’s no fraud, make sure that a company does what it promises that it’ll do. Evaluation is whether the program itself made a difference. And making difference doesn’t mean that if the company promised to connect 1000 locations, that 1000 locations were connected. That’s the company doing what it said it would do, and that’s good. But if those 1000 locations would have been connected anyway, then the program did nothing. If a different 1000 locations were not connected that would have been, and instead, these 1000 are, you’ve just sort of shifted resources around, and you’ve done nothing. And we never, ever focus on that, or very rarely.

One thing that matters is not just the quality of the connection, but how long it takes to get out there. If something is so valuable that some people say it’s a human right, why is it okay to make them wait five years when they can have connections much sooner, with not the fastest technology. Especially when that technology is sufficient to provide everything that they need to do.

Learn more: Broadband Providers Should Not Be Liable for User Copyright Infringement | The Broadband Dilemma | How to Get the Broadband Equity, Access, and Deployment Program Back on Track | Maine Shows the Way: Low Earth Orbit Satellites Can Rescue the Broadband Equity, Access, and Deployment Program