By Ross Marchand
Consumers benefit when internet service providers (ISPs) compete for subscribers. For example, competition has produced innovative options such as zero rating (free data) plans that can be used to help lower income populations access important content on the internet.
But, concerns abound about the quality of and access to internet service where there’s little competition between providers. Attempts at all levels of government to provide robust broadband service have cost taxpayers billions of dollars without addressing rural broadband needs in the most cost-effective manner. To truly close the digital divide, we need low-cost partnerships between the government and the private sector.
Chief amongst current public-sector efforts is the Federal Communication Commission’s (FCC) Universal Service Fund (USF), which will funnel $2 billion through the Connect America Fund over the next decade to subsidize the activities of rural ISPs. The USF has already spent more than $80 billion over the past twenty years, but studies show that the subsidies drive administrative bloat (i.e. personnel and governmental relations costs).
The Department of Agriculture’s Rural Utility Service (RUS), which has spent $7 billion since 2009 on grants and subsidized loans to promote rural internet uptake, has also had disappointing results. Despite continuous criticism from the Government Accountability Office for having insufficient performance goals and little effect on economic growth in underserved areas, the RUS continues to funnel money into dubious cooperative ventures.
Of all of these governmental efforts, perhaps the most disappointing have been municipal efforts to build out broadband systems. These efforts have certainly not been cheap — according to a study released by the University of Pennsylvania last year, only two of the twenty municipal systems examined were able to recoup construction and operation expenses. Municipal and state authorities have little to show for going so deeply in the red for these efforts. As the Taxpayers Protection Alliance has repeatedly documented, public broadband projects regularly go belly up, or spend astronomical sums, to plug in and connect tiny populations to the internet.
Luckily, citizens do not need to rely on bank-breaking, “last-mile” projects to increase ISP competition and rural broadband access. For years, companies have been piloting the use of television white spaces, or the unlicensed spectrum in between television channels, to deliver internet to underserved areas. From web-strapped students in rural Virginia to electricity-starved villagers in Kenya, television white space has proven to be a promising avenue to deliver internet to areas where laying cables simply doesn’t make sense. Through their philanthropic initiative, Microsoft plans on using unlicensed spectrum to help bridge the digital divide and provide access to underserved rural communities across the country. And, since using spectrum doesn’t require laying down expensive infrastructure, the costs of television white spaces are less than a fifth of traditional broadband costs.
Unfortunately, though, it’ll take more than private funding promises to see this plan come to fruition. The FCC determines the licensure required to use different pieces of spectrum, and has not yet given the green light to allow television white spaces to be used for internet deployment. By reserving three unlicensed channels nationwide for internet access, the FCC can allow millions of citizens with few internet choices to finally take advantage of another way to connect.
Since television white spaces have a far larger effective radius than regular Wi-Fi, internet services would become far less location dependent, and competition would increase as a result. If spectrum space is reserved for internet usage, it will help develop vital markets for complementary products like chips and receivers, and allow for widespread deployment.
Competition among ISPs is poised to be more robust than ever before. By allowing the use of television white spaces to increase provider competition and rural access, providers can be held accountable to ensure fair data speed and pricing policies. Tweaking spectrum policy will prove to be a game-changer for millions, without forcing taxpayers to hand over billions of dollars.
Ross Marchand is the policy director of the Taxpayers Protection Alliance.