Keynote Speech for Broadband Nation Expo

(As Prepared for Delivery)

Are there any undecided voters in the room?

I thought not.

Here’s why I asked. I’m going to say some things that may sound partisan. They are not. They’re just Wall Street analysis. I am certain nothing I say will influence a single vote. Which is fine. But one cannot talk about the impact of the election without saying some things that to some ears, in this climate, sound partisan.

So, with that in mind, let’s discuss the current Broadband Policy State of Play and how the election may affect it.

There are four fundamental goals of broadband policy:

• One, networks everywhere.
• Two, everyone on.
• Three, use the networks to improve the delivery of essential public goods.
• Four, a market dynamic that is constantly driving faster, better, cheaper, easier broadband.

As to the first, we are well on the way to achieving the goal, though more slowly than we would wish. Federal Communications Commission data suggests we already reach the low 90s percent. Between the Capital Projects Fund and the Broadband Equity, Access, and Deployment (BEAD) Program, however, we are within a few years of getting to the high 90s, if not finishing that job.

As to the second goal, we are moving backwards. The end of Affordable Connectivity Program (ACP) was the largest step backwards any country has ever taken to widen the digital divide. Having said that, we won’t know how large a step backwards until later this year. I am guessing we will discover that most of those homes that lost ACP have stayed on, thanks to voluntary, private, low-income programs.

Many of those homes will still be broadband insecure but the bottom line is that the combination of the Emergency Broadband Benefit, the ACP, and voluntary programs have narrowed the affordability divide. That would make the affordability problem easier to solve though ironically it takes off some of the political pressure to solve it.

As to the access and affordability problems that remain when BEAD is finished and we know what happened to the 23 million homes receiving ACP, we need to reassess. More on that in a minute.

As to the third, we are making progress and AI will inevitably be an accelerant. But while we are using broadband for healthcare much better than we did pre-COVID, we still have not cracked the code for education, job training, and other public services.

As to the fourth, there is a big debate. For now, I will simply say that relative to what we had when we did the 2010 National Broadband Plan, it is a lot faster, better and easier. The average download speed when we did the plan was about 4 down. The latest Ookla speed test has us at about 250 down, over 60 times faster. We now have fiber in over half the homes in the U.S., usually competing against gigabit-capable cable; something non-existent back in 2010. And in some places, fixed-wireless competition is fueling another competitive dynamic.

As to price, between 2010-2023 overall inflation was 40 percent. The broadband price index, however, increase at only a quarter of the rate, by about 10 percent when adjusted for quality.

Still, we have a way to go to upgrade copper to fiber to millions of homes. While some, such as Memphis, are engaging in some interesting experiments, I think that discussion will not move to the front burner until the end of the decade.

How will the election change any of these? Let me break it down this way.

As to those things your industry fears if Democrats win, they will not happen. The courts are highly likely to overturn the FCC’s frameworks for Title II and Digital Discrimination and anything else I can think of that might arguably represent a speed bump to investment in new or upgraded networks.

As to one of, if not the top thing your industry needs—a sustainable, rational, and national universal service policy—that is more likely to happen under the Democrats, with the Democrats likely to be more generous when it comes to low income and institutional (that is, E-Rate) support, which supports markets all across the country while Republicans will be more focused on support for rural areas.

I could be wrong. Many Republicans are participating in bipartisan efforts to reform the FCC’s Universal Service Fund and could lead us to a comprehensive solution. Still, so far, those efforts have not borne fruit. I worry that the reason is that the disagreements are still too wide.

I worry that on the issue of USF contribution reform, there is a lot of rhetoric about taxing tech, but—just being an analyst here—tech has a strong record of stopping legislation it doesn’t like.

I worry that we are not focused on distribution reform. I’m astonished that so far—and if I missed it, my bad—there is no authoritative study that tells us, post-BEAD and the end of ACP, how much we are likely to need to fund individual and institutional access and affordability.

I know the FCC staff. They could produce that authoritative study. I don’t know how you have a thoughtful debate about the future of USF without some basic analysis of the financial needs.

In addition, I think that if Trump wins, we should assume that Elon Musk will be highly influential on all telecommunications issues. Ask yourself, what is the ideal USF program from Starlink’s point of view? Based on what he has said about BEAD, I don’t think he is on the same page as the bipartisan working groups.

But this is not about ideology. Starlink’s business model is different than most everyone else offering broadband. Starlink has built out its network covering the United States. Wired and Fixed Wireless ISPs build out locally. Many are in the process of upgrading. Any government money that goes to Wired or Fixed Wireless providers to upgrade their networks for consumers weakens Starlink’s relative competitive position. Further, Starlink relies on using government spectrum. Any additional spectrum it can use strengthens its ability to serve more customers and improves the quality of the service. In the same way, any spectrum that is allocated to other satellite providers or to mobile or fixed wireless services weakens Starlink’s relative competitive position.

Seeking to gain a business advantage through a policy process is not unusual. Having one player with a unique business model and unique political power is.

As to BEAD, if Harris wins, the roll-out will continue as currently planned. With Trump, there is some risk of delay as the Republicans rethink the priorities and potentially replace civil service employees with political appointments, two of the proposals recommended in Project 2025. There is even a risk of a significant cut back in fiber deployment as Musk and some Republican policymakers see the fiber spending as unnecessary considering satellite offerings.

There has been a lot of criticism of BEAD particularly related to how long it has taken. What the critics keep forgetting is that more than half of time was taken up with the FCC developing a map.

Congress required that map because the 2020 Rural Digital Opportunity Fund (RDOF) auction used maps that included as unserved locations where there was obviously already broadband coverage, such as in Fisherman’s Wharf in San Francisco, Apple headquarters, the Massachusetts Institute of Technology campus, and several large airports including international hubs in Dallas-Fort Worth and San Francisco.

Critics also forget Congress asked the BEAD program to finish the job of connecting all Americans to broadband. Other deployment programs allocate funding that everyone agrees is insufficient, and then makes incremental progress in connecting unserved areas. BEAD does the opposite. It puts a huge amount of money on the table but requires states to color in the entire map. It's a totally different, and much more difficult, policy problem.

If Congress wanted BEAD to prioritize speed, it would have been better off to give the funding to the FCC and ask it to run a national reverse auction rather than creating a state grant program, which required setting up state broadband offices in many states. Considering the failure of the RDOF program, it is understandable that Congress made the decision it did not to do so.

Policy also needs to deliver more spectrum. The parties have different approaches but neither appears to have a strategy for addressing the concerns of the Department of Defense—a significant user—in a timely manner. With spectrum, I think the outcome is less a matter of ideology and more a matter of leadership and diplomatic skills, something difficult to predict in the context of the election.

I will only note, as I did on the Wall Street Journal editorial page the other day, that we need a systemic approach to repurposing spectrum from fading uses to innovations that will drive consumer benefits and economic growth. We have done so successfully under both Democrats, with the broadcast incentive auction, and under Republicans with the C-Band auction. But I should add that the Democratic auction won a Nobel Prize as well as two Emmys. Ok, that was a gratuitous, partisan comment.

My serious point is that we need to do so on a systemic, not an ad hoc basis.

As to the third and fourth problems, utilization and the copper divide, those are more likely to be addressed through state and local initiatives. The federal government could do more to stimulate experimentation but that does not appear to be on the radars in this political season.

Let me mention two underappreciated elements post-election.

First, the recent hurricanes will elevate a back burner issue—resiliency and reliability—to the front burner. Similarly, the news about the Chinese hack of communications networks may do the same for security. There are not easy nor partisan answers. But the pressure to come up with pragmatic answers will increase.

Second, perhaps the most important and, so far, ignored economic policy at stake in the election involves the question of how Trump will, if elected, set individual tariffs. He has proposed imposing a “universal” baseline tariff on all imported goods, which, at his direction, can be waived or increased. Under our trade laws, through which Congress delegated broad authority to the President, he arguably has that power.

So, under Trump’s plan, huge sectors of the economy would be incented to beseech him to lower the costs of their imported inputs and increase those of their competitors. What will be the criteria Trump will use for determining whether a tariff is increased or decreased? A detailed economic study demonstrating the impact on jobs? On economic growth? On prices? On national security?

Not the way I would bet. Consider his flip-flops on TikTok, crypto, EVs, visas, and vaping. As Politico noted, “Trump keeps flip-flopping his policy positions after meeting with rich people.”

But it wasn’t just the meeting. It was the giving.

Tariff supplicants, including foreign countries, will understand that rather than investing in economists, perhaps they should invest in Jared Kushner’s fund, or Trump social media stock, or buy a supply of Trump $100,000 watches. Those efforts could all be hidden. But even if exposed, thanks to the Supreme Court, they are likely legal.

Conservatives have rightly decried rent-seeking—using political means to take wealth from someone else and to redistribute it to oneself—to warn against government interventions in the economy as diverting resources from more productive activities. But the limited conservative push back to Trump’s plans suggest he will have the freedom to act however he wishes.

Tariffs will then reflect the willingness of enterprises to bribe, I mean in the parlance of the Supreme Court, the willingness of enterprises to offer a gratuity, not a rational economic response to boost our economy. The price you will pay for importing foreign inputs will not reflect market forces of supply and demand but rather the market price for Trump’s affections.

What is that price? Good luck figuring it out.

Let me close with this thought. There is a fundamental Wall Street issue for your companies in terms of misaligned product cycle.

Wall Street values service providers business in part on its perception of how long a product cycle is: the longer the better in terms of amortizing a generation of equipment to capture revenues. That is, Wall Street would prefer that as to service providers, the time between 4G, 5G and 6G be as long as it can be.

On the other hand, Wall Street values equipment providers’ businesses on its perception of how short the clients’ product cycle is: the shorter the better. If the gap between the G’s goes down by a year, the stocks of the equipment side go up.

This is not a unique or even unusual situation. It does create a tension.

But there is a path for you and your clients and the country to win. While we can and should argue over details, there are ways to enable upgrades to address resiliency, reliability and security, to close the copper/fiber gap, to create a spectrum pipeline that addresses market demands and capital requirements, that produces a broadband ecosystem that is constantly becoming faster, better, cheaper and easier.

Some of those answers will be raised and discussed at this meeting. Some await the election returns. Some require better analysis before the real debate can commence.

But I know this for certain: none of the discussions that will lead us to where we want to go will take place on X.

Thank you.

Blair Levin is the Policy Advisor to New Street Research and a nonresident senior fellow at Brookings Metro​. Prior to joining New Street, Blair served as Chief of Staff to FCC Chairman Reed Hundt (1993-1997), directed the writing of the United States National Broadband Plan (2009-2010), and was a policy analyst for the equity research teams at Legg Mason and Stifel Nicolaus. Levin is a graduate of Yale College and Yale Law School.

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

© Benton Institute for Broadband & Society 2024. Redistribution of this email publication - both internally and externally - is encouraged if it includes this copyright statement.

For subscribe/unsubscribe info, please email headlinesATbentonDOTorg

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
1041 Ridge Rd, Unit 214
Wilmette, IL 60091
847-220-4531
headlines AT benton DOT org

Share this edition:

Broadband Delivers Opportunities and Strengthens Communities