House Democrats want to spend $100 billion to expand broadband internet to poor rural and inner-city communities and make permanent a COVID-19 program that pays $50 a month of the internet bill for low-income families while setting maximum prices that providers can charge in some cases.
The pandemic highlighted the importance of being able to afford online access for everyday activities such as going to school or seeing a doctor, President Biden and top Democrats on Capitol Hill say.
The issue fits into the Democrats’ priority of reducing racial inequity in the U.S. Studies show that Black and Hispanic families are less likely than White families to have broadband service at home.
Republicans say the proposed price controls and subsidies are more examples of the Democrats’ push for the biggest expansion of government since the New Deal.
“We all want to close the digital divide, but the only way to truly achieve this is to lead with solutions that drive results — not more government centralized power,” said Rep. Cathy McMorris Rodgers of Washington, the top Republican on the House Energy and Commerce Committee, which has jurisdiction over broadband expansion.
“The policies proposed by our Democratic colleagues and the Biden administration include federally regulating the rates that private companies can charge for broadband service,” she said.
Although 90% of Americans have access to internet connections that are fast enough to do homework, have video visits with doctors or stream movies, Democrats say rural school districts had to rig school buses with Wi-Fi so their students could do homework during the pandemic shutdowns.
“These are not luxuries. They’re necessities to participate in society,” Rep. Michael F. Doyle, a Pennsylvania Democrat on a key subcommittee examining the issue, said at a recent hearing.
The Democrats’ $100 billion Accessible, Affordable Internet for All Act, sponsored by House Majority Whip James E. Clyburn of South Carolina and Sen. Amy Klobuchar of Minnesota, includes $80 billion to subsidize the construction of high-speed internet in areas of the country that do not have it.
Mr. Biden also has proposed spending $100 billion in his $2.25 trillion American Jobs Plan to extend high-speed internet to all areas of the country.
Vice President Kamala Harris described high-speed internet as a basic necessity.
“We have a legacy of saying, ‘We are going to have a commitment, a national commitment, to making sure everyone has access to the basic things they need.’ Now in this year of our Lord 2021, that is broadband,” she said last month during a visit to Plymouth, New Hampshire, to tout the infrastructure plan.
Rural areas frequently lack the broadband service that’s prevalent in urban areas, but liberal groups promoting greater internet access argue that broadband providers don’t build high-speed internet in poorer urban neighborhoods because residents can’t afford it.
Critics call it “digital redlining.”
The term refers to a past practice by banks to not lend Blacks money to buy homes in certain areas, a practice that contributed to racial segregation.
Democrats and Republicans teamed up to include a $50 monthly subsidy to help low-income people pay for broadband service during the pandemic. The temporary benefit was in the $900 billion coronavirus relief package signed by President Trump in December.
The subsidy was not included in the $1.9 trillion COVID-19 relief package that Mr. Biden signed in March. Congressional Democrats now want to make the subsidy permanent at an estimated cost of $6 billion over the next five years.
Mr. Biden’s plan and the congressional Democrats’ bill also would try to push companies to lower their rates by increasing competition. They would subsidize efforts by local governments to start their own internet service for residents. That, however, would involve the federal government overriding laws in 22 states that bar or discourage the creation of municipal broadband service.
Particularly alarming to Republicans and broadband companies is that congressional Democrats would take steps toward federal limits on internet service prices.
Under the House and Senate bills, the federal subsidies to expand internet service would come with strings attached. Broadband companies using the money would have to offer an “affordable option” for people making up to 136% of the federal poverty rate, which is about $26,500 for a family of four.
The Federal Communications Commission would set the price companies would have to charge.
New York Gov. Andrew Cuomo would go further.
Mr. Cuomo, a Democrat, in April signed into law a requirement that all broadband companies doing business in the state offer $15 high-speed internet service to 7 million low-income residents.
The cable industry fears that Mr. Biden hinted in his American Jobs Plan that he is open to government-regulated rates.
Mr. Biden floated the idea for internet price controls in a fact sheet outlining his infrastructure plan.
“Continually providing subsidies to cover the cost of overpriced internet service is not the right long-term solution for consumers or taxpayers,” it said. “Americans pay too much for the internet — much more than people in many other countries — and the president is committed to working with Congress to find a solution to reduce internet prices for all Americans.”
Michael Powell, head of the NCTA-The Internet and Television Association, an industry group representing cable companies offering broadband service, called price control proposals “misguided.”
The idea would be tied up in the courts for years, he said, leading to a “thorny, lengthy morass of complexity that would drag on for years.”
Meanwhile, he said, low-income people wouldn’t get any help during that time.
The industry is more supportive of continued federal subsidies for low-income customers, said Mr. Powell, a former chairman of the FCC.
Still, broadband access is a particularly attractive issue for Democrats and fits neatly into their agenda of addressing racial disparities.
According to the Pew Research Center, 80% of White adults in February had broadband service at home, compared with 71% of Black adults and 65% of Hispanic adults.
A memo prepared by the House Energy and Commerce Committee’s Democratic staff said a disproportionate percentage of the roughly 15 million students who do not have the internet at home are Black, Hispanic or American Indian.
“As Congress works on President Biden’s American Jobs Plan, it is critical that we consider solutions to our nation’s infrastructure challenges that not only close the digital divide, but address historic inequities that have for far too long left behind Black, Hispanic, tribal and low-income communities,” Mr. Doyle said at the hearing. “These proposals represent the once-in-a-generation investment we need to address these deep-seated digital inequities in our society.”
George S. Ford, an economist at the FCC during the Clinton administration, told lawmakers that rate regulation could backfire.
Forcing companies to charge a lower price for low-income people would reduce how much they have to expand broadband service, said Mr. Ford, chief economist at the Phoenix Center for Advanced Legal & Economic Public Policy Studies, a Washington think tank that employs many former career staff with federal agencies.
Mrs. Rodgers said Republicans understand the importance of making it easier to get broadband service, whether “to work from home, educate their children, access health care, connect with loved ones and maintain their communities of worship.”
She said a better course than regulating rates or making the low-income subsidies permanent would be to leave the companies alone. She cited a study by the United States Telecom Association that broadband companies invested $1.78 trillion from 1996 through 2019 to build internet access. Mrs. Rodgers also questioned whether focusing on prices — either by regulating rates or continuing the subsidies — is the most effective way to allow more people to get online.
Mr. Ford agreed. He said that when the Census Bureau asked those without internet access at home in 2019 why they weren’t online, 60% said they weren’t interested and 18% said they couldn’t afford it or that it wasn’t worth the price.
“If you’re going to look at this as a price issue, you’re going to be disappointed in five years when it didn’t solve the problem,” he said.