Biden broadband agenda takes aim at Big Telecom
The White House wants to lower broadband prices and make the industry more competitive — a sign that President Biden's approach to the telecom sector will be much tougher than his predecessors'.
Why it matters: Tech giants and internet platforms have been in the brightest spotlight of regulatory scrutiny, but the new administration looks ready to cast a much wider net.
The big picture: The pandemic has made it clear that access to high-speed internet is now a necessity — even, some argue, a human right — and too many families were left disconnected when school and work suddenly went virtual.
- While Congress and the FCC have made some headway in providing temporary subsidies to help cover the cost of broadband, the administration's go-big-or-go-home infrastructure plan would shift the industry's competitive dynamics to favor alternatives to the biggest internet service providers.
Catch up quick: The White House infrastructure package included $100 billion for broadband deployment, with plans to channel funding to government-owned, non-profit or cooperative networks and a push to reduce prices.
- "A very positive signal that was sent — that should send chills up the spines of the incumbents — was recognizing that the market is not competitive and Americans generally are paying too much for broadband," Harold Feld, senior vice president of Public Knowledge, told Axios.
Behind the scenes: Key White House officials with progressive backgrounds have been meeting with telecom industry players to discuss Biden's plans for broadband.
- Bharat Ramamurti, a deputy director for the National Economic Council, has a broad portfolio of financial reform and consumer protection. He is a former aide to Sen. Elizabeth Warren (D-Mass.), who as a presidential candidate championed giving billions to non-profits and co-ops to build fiber networks that would offer service at an affordable price.
- Tim Wu, special assistant to the president for technology and competition policy, has a wide purview over tech issues. He rose to prominence by focusing on net neutrality and telecom market issues before turning to tech antitrust more recently.
- Hannah Garden-Monheit, senior policy advisor with the NEC, is a former aide to Ramamurti. Garden-Monheit's main focus is broadband and is relatively new to the space, sources told Axios.
Between the lines: The early moves on broadband signal a much more aggressive approach to the telecom industry than the Obama administration.
- "We've had a long run of the argument being that regulation is harmful to investment and innovation — and I think what this activity is saying is that argument has run its course," Tom Wheeler, the former chairman of the FCC in the Obama administration, told Axios. "This is a watershed where there is a recognition that investment is made based on the returns it will generate, not based on regulation."
The other side: Jonathan Spalter, president of USTelecom, which represents providers like AT&T and Verizon, said while the president's focus on closing the digital divide is important, raising the specter of regulating internet prices is wrong, and "it is not helpful to demonize the companies" doing the work.
- "What's really important here is to find a pathway to partnership and cooperation, not rehashing the old rhetoric and the old myth that somehow big is bad," Spalter told Axios. "Big companies, alongside a broad range of providers in our country, have brought networks that delivered during COVID, lowering prices, increasing speeds."
Meanwhile, smaller providers are worried they will be cut out of funding that's steered toward municipal or cooperative networks.
- "I don't think that corporate structure should matter if your blood, sweat and tears are already dedicated to building out broadband in rural America," said Claude Aiken, head of the Wireless Internet Service Providers Association, whose member companies often have 250 or fewer subscribers in rural areas. "Locking out thousands of rural small businesses from competing for these funds, we think should be a non starter."
Go deeper: Why cable hates Biden's $100B internet plan