Biden-Harris Americans Jobs Plans have laudable goals for broadband, like 100% coverage, more affordability for economically disadvantaged people, and more competition. These goals are best achieved by technologies that compete on their merits, rather than by politicians who choose winners. It is unfortunate that the Biden-Harris plan reduces, if not rejects, the role of mobile broadband in achieving these goals. Americans have embraced mobile broadband because of its ease of use. Compared to other networks, mobile broadband has favorable economics and physics, which a simple comparison of 5G and Wi-Fi demonstrates. This article details the benefits of a good broadband policy and that it is not too late for the White House to update its plan with the facts.
The Biden-Harris Plan rightly recognizes the importance of bringing disadvantaged people and communities online. When it comes to deploying networks in rural and remote areas like tribal lands, it is much cheaper to transmit over the air than over vast, rugged terrain. A cellular signal can be sent in endless directions while a wired signal can only go in two. 5G, for example, can provide as much data, if not more, than a wired connection.
Historically, cellular networks have been held back due to the political challenge of allocating spectrum rights, but the innovation of the Federal Communications Commission (FCC) has allowed the United States to become a leader in radio frequency auctions, an achievement recognized by the 2020 Nobel Prize in Economics. While only a small portion of the entire spectrum is allocated to auctions in the United States today, market-based attribution offers enormous social benefits and should be extended.
An article I co-wrote with David Witkowski compares the economic projections of wireless technologies against the price and performance of spectrum allocation. For example, auctions of 50 wireless service providers in the recent C-band auction generated gross proceeds of $ 94 billion. After setting aside an amount to compensate incumbent rights holders, $ 81 billion was deposited in the treasury, a nice sum for social purposes. This slice of spectrum is expected to generate $ 192 billion in economic activity over seven years with the next generation of cellular networks.
Compared to the competitive process of allocating 280 MHz of C-band spectrum, the FCC distributed four times more spectrum of similar value in the 6 GHz band. The FCC still holds old-fashioned “beauty pageants” in which different parties explain to the agency why they should have access to spectrum without having to pay for it. In April 2020, the FCC ruled a whopping 1200 MHz in the 6 GHz band as “unlicensed.” While anyone can use this spectrum, it’s basically a giveaway to the Big Tech platforms that want to transmit their services over Wi-Fi without paying for it.
6 GHz unlicensed spectrum is expected to generate $ 154 billion in direct and indirect economic benefits over 6 years for various Wi-Fi applications. While the licensed and unlicensed revenue streams are compelling, 5G spectrum is on the way to becoming ” deliver 4.5 times more economic value per MHz than Wi-Fi in the 6 GHz band. This does not include the $ 81 billion in 5G auction products, which alone equates to 53% of the total economic value of Wi-Fi projected for 6 GHz.
This comparison is significant because the Biden-Harris plan does not talk about 5G, let alone mobile broadband, the de facto broadband access platform for most Internet users around the world. Instead, the Biden-Harris plan prefers that more expensive networks (fiber to the home) be provided by less efficient and less experienced providers (local government). This favoritism probably reflects political, not economic, reasons. Fiber-to-the-home networks have certain features suitable for online movies provided by Big Streamers (Netflix, YouTube, Disney +, Amazon Prime, Microsoft), key constituents of Biden-Harris. The broadband subsidies proposed in the plan would ostensibly reward the affluent neighborhoods of Biden-Harris.
The Biden-Harris Plan also observes the importance of financial support for bringing economically disadvantaged people online. However, its policies create potential conflicts with progressive solutions already in play. For example, it stands to reason that .gov domains at the federal and state levels could and should be freely accessible at no cost. The total amount of data for essential health, safety and government applications is minimal compared to entertainment. There is already a proof of concept in VA Video Connect that allows veterans to access telehealth with no data charges when using the AT&T, TracFone, T-Mobile and Verizon cellular networks. As Nicol Turner-Lee of the Brookings Institute details, the app has helped the US Veterans Administration (VA) regularly reach some 2.6 million veterans from remote locations with limited transportation during the pandemic. . This turned out to be important because VA hospitals were under high stress during the pandemic and could not maintain their previous level of routine care.
This VA plan is indicative of voluntary exchange, the founding principle of a market economy in which producers and consumers can exercise their free choice and decide how to contract. Such programs have existed for years in developing countries. This is because the marketplace can offer an unlimited number of free programs for welfare applications that ensure that anyone can access essential internet applications. However, such a successful telehealth program can be compromised by new California regulations and threaten to upend VA Connect for veterans across the United States.
Given their claims to “digital equity”, their desire to keep costs low for the underprivileged, and their preferences for fiber to home networks, the Biden-Harris plan is expected to incorporate the main beneficiaries from the top. debit: Big Tech. FCC Commissioner Brendan Carr said Big Tech had jumped billions of dollars needed to maintain and build America’s networks, and it was time to end freeriding. He’s calling on Big Tech Legislative Congress to pay its fair share. Such models have been in place for decades in other industries. It makes sense that the largest users and beneficiaries cover a significant portion of the cost of the network to ensure their use.
America is fortunate that the historically bipartisan broadband policy has supported investment in a variety of technologies. The success of this policy can be measured by the high level of investment in private networks, some $ 1.8 trillion since 1996. This represents about a quarter of total private investment in broadband worldwide each year, a staggering figure. Americans make up less than 5 percent of the world’s population, but enjoy an abundance of its broadband resources.
Lowering barriers to entry is a key element in increasing competition. That’s why the FCC has worked tirelessly to reduce regulatory hurdles on both wired and wireless infrastructure, and their efforts have been upheld in court. Part of the savings in deployment costs is passed on to the consumer, an important way to keep broadband affordable. Over 5,500 providers compete in the US broadband market. Several wireless operators cover the country with cellular, satellite and fixed wireless technologies. Cable and fiber providers, knowing the value of wireless, are investing heavily to improve their Wi-Fi solutions and even bring wireless offerings to market.
To bring about “transformative” change, Biden-Harris could consider reforms based on the federal spectrum market whose governance structure has not been altered for 98 years. A Clinton-era proposal suggested that the sale of federal spectrum possessions could generate up to $ 300 billion in 1996 (nearly half a trillion in today’s dollars) to pay down the national debt and make move the administrative allocation regime to privatization within a decade.
While the Biden-Harris broadband plan is supposed to look progressive, it relies on old-fashioned technology, ancient business models, and elite constituents. If the goal is to get everyone online, wireless networks are the cheapest and most user-friendly. Leaders should enable the diversity of business models, from integrating the wealthiest players into the payments landscape, to enabling consumers to use free data. Finally, it is smarter economically and politically to charge companies for their use of networks and spectrum rather than forcing taxpayers to foot the bill for providing Big Tech traffic.