President Trump's Infrastructure Plan Unveiled, And It's Light on Broadband

You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday.

Round-Up for the Week of February 12-16, 2018

President Donald Trump’s long-awaited infrastructure proposal was finally unveiled on February 12, 2018. The 10-year plan for "rebuilding infrastructure in America" calls for $200 billion of federal seed money that the Administration projects will generate $1.5 trillion by incentivizing states, localities, and private investors. “We will build gleaming new roads, bridges, highways, railways and waterways all across our land,” the fact sheet begins, quoting President Trump’s State of the Union address. “And we will do it with American heart and American hands and American grit.”

Broadband, and closing our country’s digital divide, is one area many were hoping would get specific federal  spending. Just a couple of weeks ago, we reported how big a problem (in billions) it is to close the digital divide. Democrats on the House Communications subcommittee cited a 2017 Federal Communications Commission report that estimates a $40 billion investment is necessary to deploy fixed broadband service to 98 percent of the United States. Projected costs rise to $80 billion to reach 100 percent of the population. [Of note: the the Schools, Health & Libraries Broadband Coalition released research this week finding that it will cost $13 billion to $19 billion just to connect all unserved community anchor institutions in the continental U.S. and Hawaii.]

So where does broadband deployment fit into President Trump’s infrastructure plan? It gets squeezed in. Sorta. The proposal does not contain any funding specifically earmarked for improving high-speed internet access. Instead, the plan sets aside a pool of funding for numerous types of infrastructure projects, and broadband is one of the eligible categories. Broadband is peripherally included in two proposals: 1) The Transformative Projects Program and 2) The Rural Infrastructure Program. 

Transformative Projects Program

The $20 billion Transformative Projects Program will:

• Provide Federal aid for bold and innovative projects that have the potential to dramatically improve America’s infrastructure.

• Focus on projects that could have a significant positive impact on States, cities, and localities but may not attract private sector investment because of the project’s unique characteristics.

Infrastructure sectors covered by this program could include, but would not be limited to, transportation, clean water, drinking water, energy, commercial space, and broadband.

Rural Infrastructure Program

The Rural Infrastructure Program would send $50 billion to states’ governors to use for rural infrastructure, of which broadband is just one of many potential uses. This would “enable rural America to address its unique infrastructure challenges, rebuilding and modernizing bridges, roads, water and wastewater assets, water resources, waterways, power generation assets, and broadband,” the proposal reads.  Eighty percent of that $50 billion would be provided to the governor of each state, who would take the lead in deciding how the money would be spent in their state. The other 20 percent would pay for grants that could be used for certain project categories, “distributed as rural performance grants based on performance criteria, including increased investment in broadband,” according to the proposal. This program also will provide a needed boost to tribal and territorial infrastructure.

The plan would also add rural broadband facilities to the list of eligible categories for Private Activity Bonds, which allow private projects to "benefit from the lower financing costs of tax-exempt municipal bonds." These bonds, which accounted for 27 percent of issuance in 2015, are sold for an array of projects including airports and affordable housing, as well as for nonprofit hospitals, nursing homes, and colleges.

At a meeting with state and local officials, President Trump said:

[T]he rural folks have been left out, including broadband internet access, which they don't have. And they want it, and the farmers want it.  It will create thousands and thousands of jobs, and increase training for our great American workers, and it returns power to the state and local governments who know best what their people need…

[I]t's been very unfair what's happened with broadband in terms of the Midwest and in terms, really, of rural areas...But now it's going to be taken care of. We're spending a great deal of money on that. It's only fair. And they want it. They want it. They know how to use it. They want it. And we're going to get it.

Rural Rewards? Criticism over Public vs. Private Benefits

The New York Times noted that President Trump’s plan “upends the criteria that have long been used to pick ambitious federal projects, putting little emphasis on how much an infrastructure proposal benefits the public and more on finding private investors and other outside sources of money.” Adie Tomer, writing for Brookings, said, "The administration essentially created a system that could leave many metropolitan areas and entire states without federal infrastructure support.... Considering that state and local governments already do the bulk of public investing in infrastructure, this proposal must feel like the potential loss of a once trusted partner." The Rural Infrastructure Program would presumably benefit Trump-voting rural areas at the expense of more urban communities. Of the program, Tomer writes:

Functioning like a formula block grant to states based on their national share of rural population and lane miles, it would essentially give governors carte blanche to invest in their rural counties, or places of less than 50,000 people. Since Trump’s earlier infrastructure proposal during his campaign got hammered for its inability to recognize that private financing may not be attracted to rural infrastructure projects, this feels like an outsized political response to placate U.S. Senators from rural states.

Senate Broadband Caucus Co-Chairwoman Shelley Moore Capito (R-WV) recently noted that “governors would be more inclined to use cash for roads and bridges than broadband if infrastructure modes are lumped into one rural fund.”

Removing Regulatory Red Tape: A Helping Hand for Wireless Deployment

President  Trump’s infrastructure plan also aims to expedite the permitting process for wireless operators to install small cells and other related network equipment to deliver 5G wireless services. Under the current law, wireless operators that want to deploy small cells and Wi-Fi attachments must comply with both the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA) similar to how they obtain permits for large towers. The infrastructure plan reads:

Small cells and Wi-Fi attachments do not have an environmental footprint, nor do they disturb the environment or historic property. However, despite this lack of impact, small cells and Wi-Fi attachments typically go through the same level of analysis and review under NEPA and the NHPA, which needlessly adds both delays and costs to the process.

Wireless carriers would be allowed to install small cells and Wi-Fi attachments without going through environmental and historical preservation reviews. The Administration claims the proposed changes will eliminate unnecessary reviews without adversely affecting the environment. But that point is controversial. House Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) said the President “wants people to believe that environmental protections are preventing infrastructure projects from moving forward when in reality the obstacle is a serious lack of funding. The harmful environmental rollbacks included in the President’s proposal will endanger human health and the environment and threaten our communities.”

Reactions

Reaction to the proposal proposal generally has split along partisan lines. Republican leaders from the House Commerce Committee issued a joint statement saying, “Please permit us to say that President Trump hit the nail on the head when constructing this plan to rebuild America’s infrastructure.”

Many Democratic lawmakers disagreed and would have liked to have seen more dedicated funding for broadband expansion. “With a comparatively paltry investment from the federal government over ten years—less than one-tenth of 1 percent of GDP—and no dedicated funding for rural broadband, the Administration’s plan falls far short in resources, leaving many communities behind," said Rep Mark Pocan (D-WI).

As we noted earlier, Democrats had previously proposed a $40 billion broadband investment to ensure broadband coverage for 98 percent of the country. Ranking Member Pallone said:

President Trump’s infrastructure proposal is woefully inadequate for addressing the urgent needs of modernizing our nation’s infrastructure.  The proposal does not include any new funding, and it forces the majority of costs onto cash-strapped state and local governments.  President Trump spared no expense and required no offsets for his tax scam benefitting corporations and the wealthiest few, but he refuses to provide any new funding to repair our crumbling infrastructure.    

Senator Ed Markey (D-MA) called President Trump’s infrastructure plan “one big monetary mirage,” and said, “only robust federal investment will fix our bridges, repair our highways, rebuild Massachusetts’s schools, and address our nation’s water infrastructure, broadband, waterway, and public transportation needs.”

FCC Chairman Ajit Pai focused his praise on the plan’s deregulatory tone and specific actions on 5G.

Too often, regulatory barriers make it harder and more expensive to build out broadband than it needs to be—to the detriment of American consumers. That’s why this plan is a welcome and strong call to action. I stand ready to work with the Administration and Congress to turn this plan into a reality as we continue to bridge the digital divide and extend 5G digital opportunity to all Americans.

FCC Commissioner Brendan Carr echoed his superior saying, “To win the global race to 5G, we must fundamentally reform our infrastructure deployment rules. It is great to see the Administration’s infrastructure plan put a priority on efforts that would expedite deployment. We must ensure that our regulatory structures are 5G Ready.”

USTelecom, a trade group representing smaller broadband providers many of which serve rural areas, was also less than enthusiastic about the proposal. Jonathan Spalter, CEO of USTelecom, said:

Closing the digital divide, particularly in our nation’s most difficult to reach rural areas, requires dedicated and adequate capital – both financial and political. Broadband providers have invested more than $1.6 trillion over the past 20 years to connect our communities, but significant, direct support from the federal government is critical to bringing broadband’s benefits to all.

The Schools, Health & Libraries Broadband Coalition (SHLB Coalition) said:

We welcome President Trump’s commitment to improving America’s infrastructure and its recognition that rural broadband is a critical component of that investment. Twenty-four million Americans still lack access to adequate broadband infrastructure, and 19 million of these people are in rural markets.  Deploying broadband first to schools, libraries, health providers, and other anchor institutions and then to the surrounding community can be an effective strategy to fill this rural broadband gap. We look forward to working with  the Trump Administration and Congress to build the digital roads necessary to upgrade America’s education, health, and economy.

What’s Next?

According to Tomer, this week marks what is likely only the beginning of six or more months of infrastructure debate in Washington:

First, multiple committees in the House and Senate will need to come to consensus around infrastructure policy. Since members haven’t yet proposed any, that leaves significant work to even introduce and debate bills. Second, Congress will need to find the money to pay for any new programming, whether that’s making cuts to current programs, raising taxes, borrowing more, or (more likely) some combination of all three. Keep in mind, Congress already has ongoing, tense debates around issues like raising the gas tax. Finally, Senate rules necessitate bipartisan support to pass any bill. If the Democratic Party doesn’t like what’s being proposed—whether for conceptual or political reasons—the whole process could stall.

Consensus does not seem likely. Republican leaders of the House Commerce Committee are touting their own broadband infrastructure bills. But Democratic lawmakers aren't fans. Forty billion dollars "is the funding necessary to ensure that nearly every American has broadband access," said Ranking Member Pallone. "The Republican proposals are far less ambitious and do not actually solve any of our country's most pressing broadband infrastructure problems."

During the House Commerce Committee's February 14 markup hearing, multiple Democrats harped on the lack of dedicated broadband money in the White House infrastructure proposal. “Will this committee take the lead?” asked Rep Peter Welch (D-VT). Chairman Greg Walden (R-OR), who was among lawmakers meeting with President Donald Trump on infrastructure, reassured Re.p Welch that he has “got this one.” Chairman Walden added that he “made that very case” at the White House. "I was encouraged there is some money, at least allegedly put aside in the proposal,” Chairman Walden said. “The president's willing to work with us to build upon that."

You can be sure to follow the twists and turns of the proposal’s enactment each and every day with Headlines.

Quick Bits

• The nation’s top spies said Russia will attempt to undermine the 2018 midterm elections (Washington Post)
• President Trump proposes eliminating federal funding for PBS, NPR (The Hill)
• Rep Mike Coffman Outlines a Net Neutrality Compromise (Speech)
• FCC's Inspector General Looks Into Changes That Benefited Sinclair (New York Times)
• Rural Call Completion Legislation Heads to President's Desk (Sen Thune Press Release)

Weekend Reads (resist tl;dr)

• Inside the Two Years that Shook Facebook -- and the World (Wired)
• I Approved This Facebook Message — But You Don’t Know That (ProPublica)
• Sinclair says asking news directors for PAC contributions isn't a conflict of interest (Poynter)
• America’s Real Digital Divide (New York Times)
• Why Broadband Competition at Faster Speeds is Virtually Nonexistent (Vice)

ICYMI from Benton

• Setting the Bar for Public Funding: Aiming Higher with the Connect America Fund, Carol Mattey
• FCC Perpetrates Broadband Policy by Press Release, Kevin Taglang

Events Calendar for February 19-23, 2018

• Feb 21 -- Best Practices for Enhancing Deployment of a Public Wi-Fi Network, NTIA
• Feb 22 -- FCC Open Meeting
• Feb 22 -- County Broadband Initiatives (SHLB Coalition)