Memo to Biden administration on telecom infra component of infrastructure initiative

As the Biden administration negotiates with Congress on the advanced telecommunications infrastructure component of its American Jobs Plan infrastructure initiative, here are some points it should bear in mind. Some should alleviate concerns of fiscal conservatives who are leery of the amount of the funding proposed and how it will be financed.

• Don’t cut the funding below the $100 billion originally proposed. Consider that a partial amount for what will ultimately be required to provide a public option of fiber connections reaching every American doorstep. It’s likely at least twice that amount will be necessary.
• Allocate 90 percent of the funding to long term, low interest loans and 10 percent to technical assistance grants targeted to public sector and nonprofit entities as prioritized in the initiative.
• Factor in future income tax revenues from enhanced economic activity ubiquitous fiber will enable.
• Avoid framing this infrastructure component as promoting market competition. It’s a nonstarter as telecom infrastructure like other utilities is a natural monopoly where no meaningful market competition (many sellers and buyers) can exist. The goal should be to provide public option open access fiber infrastructure, not to compete with legacy telephone and cable companies.
• Similarly, avoid framing this infrastructure element as addressing “unserved” or “underserved” or “rural” households and falling into the speed trap of debating what constitutes “broadband” and where it’s offered. An estimated two thirds of U.S. homes are not passed by fiber and can be found in urban, suburban and exurban as well as rural areas. Public option open access fiber infrastructure will not only help them gain access to modern telecommunications service, but also boost affordability for those households that are passed by fiber.