Dollar numbers associated with taxpayer-funded infrastructure projects reach into the trillions for everything Congress has under consideration, and settle into a $65 billion figure for broadband telecommunications infrastructure. Where the money goes has the effect of picking winners and losers in business, a normal outcome of federal spending.
Absent money that comes from taxpayers, businesses rely on money from investors, lenders and profits to spend on real estate, equipment and human resources. The way they spend the money makes the difference between success and failure, how well they compete for customers with others in the same line of business, and how much they can grow.
Focus for a moment on the tussle over taxpayer money for overcoming the digital divide, defined as the difference between having broadband internet access and not having it. From the perspective of educators, the digital divide has an adverse effect on students. Students without broadband internet access seem to number the most in low-income homes. Additionally, the digital divide is found in rural homes separated by long distances from the nearest internet access points.
For the first group, money from taxpayers or collected from telecommunications customers under government requirements becomes available to subsidize bill payments made by low-income consumers.
For the second group, taxpayer money would be spent with companies to build additional wireline or wireless infrastructure to extend internet connectivity to rural homes.
Therein lies a choice: Should the connectivity be provided by wireline, which mostly means optical fiber, or should it be provided wirelessly, which mostly means fixed wireless access? Should download and upload speeds be symmetrical and no less than 100 Mbps, which mostly favors fiber, or should it allow a lower upload speed of 20 Mbps, which gives more opportunity for wireless providers to meet the requirement?
Answers might become clearer later in September when Congress returns from recess. Shortly before it recessed on Aug. 11, the Senate passed a bill that included grants for service providers for 100/20 Mbps service. The bill raised the federal definition of broadband from the previous 25/3 Mbps service.
“We were pleased that Congress ultimately agreed to speeds that wireless can meet,” said Jonathan Adelstein, president and CEO of the Wireless Infrastructure Association.
Gary Bolton, CEO of the Fiber Broadband Association, had argued for 100/100 Mbps service. He said that, at least, the Senate bill acknowledged that the 25/3 Mbps definition of broadband was outdated.
Whom will Congress choose? Our prediction is an outcome that favors wireline, with a small concession to wireless. Many companies that provide wireless service also provide wireline service, so the outcome might not be as divided as it could seem.
Don Bishop is executive editor and associate publisher of AGL Magazine.