Sanders Wants Congress to Invest Billions Annually in New Broadband Stimulus Grants

The Obama administration initially slated billions for such programs through the American Recovery and Reinvestment Act of 2009, following a deep recession affecting the U.S. economy. The administration had allocated more than $4 billion for the BTOP grant projects, three-year grants devoted to broadband infrastructure and adoption. More than $3 billion went to BIP grants.

Sanders invoked both programs in his new bill text. “Out of funds of the Treasury not otherwise appropriated, there is appropriated $2,500,000,000 for each of fiscal years 2015 through 2019 to the Assistant Secretary of Commerce for Communications and Information to make grants for purposes of the Broadband Technology Opportunities Program established under section 6001(a) of the American Recovery and Reinvestment Act of 2009 (47 U.S.C. 1305(a)), including providing access and improving broadband service to underserved areas of the United States,” said the text of the much broader infrastructure bill that Sanders introduced.

The bill also includes a section called “Broadband Initiatives Program,” calling for additional money for broadband access: “Out of funds of the Treasury not otherwise appropriated, there is appropriated $2,500,000,000 for each of fiscal years 2015 through 2019 for the broadband initiatives program established under title VI of the Rural Electrification Act of 1936 (7 U.S.C. 950bb et seq.) to expand the access and quality of broadband service across the rural United States.”

“I think Sanders’ proposal will appeal to Democrats in Congress because of the prior success of BTOP and BIP,” Guggenheim Partners analyst Paul Gallant told us. “But any new spending even on something everyone may think is sensible is bound to get an awfully hard look from fiscal hawks. So at this point we’re probably not close to this being likely yet.”

One threshold question is whether Sanders intends to “promote competition with incumbents through infrastructure funding,” said John Horrigan, an expert now at the Pew Research Center who helped put together the FCC National Broadband Plan. Horrigan suspects that is the case due to the approach's popularity these days. Or might Sanders be considering the alternative to do that in addition to broadband adoption promotion, which receives “a lot less attention but arguably merits more,” Horrigan asked. The price tag undoubtedly means there’s a network buildout component, he said.

“Further investment of that sort would be very welcome, and there would be vast numbers of companies, universities, non-profits, and public entities that would be enthusiastic about the opportunity to further address broadband deficits,” said CTC Technology & Energy President Joanne Hovis, a former NATOA president. CTC’s clients have included the American Civil Liberties Union and various municipalities. The BTOP and BIP programs were “wildly successful, not only in creating jobs for construction and operations of the new networks, but also in encouraging public and private entities to work together, inspiring cities and states to address local broadband challenges, and incenting new private capital into the broadband market to build off the new infrastructure,” Hovis said. She believes Congress had structured the original programs well, she said.

Information Technology & Innovation Foundation telecom policy analyst Doug Brake won't “hold my breath” on the legislation, he said. “On broadband, as long as this funding is focused on unserved areas, instead of artificial competition, and is designed to not dissuade participation by any provider, it would be welcomed.” There’s “political air” among those on the left for such proposals following President Barack Obama’s State of the Union address, which cited the need for faster broadband service, Brake said. “Unfortunately, many of these proposals are unduly focused on a particular, narrow form of competition without regard for the economics of high fixed-cost industries. Instead we should focus on subsidizing unserved areas.”

In a Tuesday news release, Sanders frames the bill as making investments in “municipal broadband.” A Sanders fact sheet laments the state of U.S. broadband: “The Organization for Economic Co-operation and Development ranks the U.S. 16th in the world for high-speed internet access, which is necessary for 21st century commerce, telemedicine, education and public safety.”

“For too many years, we’ve underfunded our nation’s physical infrastructure,” Sanders said in a statement. “We have to change that and that’s what the Rebuild America Act is all about.” The economy has “improved significantly” since “the worst days of the recession” but the “real unemployment rate” is still “completely unacceptable,” Sanders said in a Monday op-ed for The Hill, pressing for stimulus spending. He talked about how a $1 trillion investment would create jobs for 13 million people, create tax revenue and that “each project would require equipment, supplies and services, and the hard-earned salaries from the jobs created would be spent in countless restaurants, shops and other local businesses.” Sanders criticized the low government spending on infrastructure: 2.4 percent of the gross domestic product. He didn't detail any precise way to offset this investment spending but suggested costs would be greater without making the investment.

Sanders "is actively working with his colleagues on building support for these investments, which enjoy broad, bipartisan support,” a committee spokesman for Sanders told us Wednesday. Senate Appropriations Committee ranking member Barbara Mikulski, D-Md., is the bill’s one co-sponsor currently. The American Society of Civil Engineers and the AFL-CIO also back the legislation, Sanders’ office said.

The legislation was referred to the Banking Committee. A spokesman for committee Chairman Richard Shelby, R-Ala., didn’t comment on next steps for the legislation.