Last week, the House Energy and Commerce Committee held a hearing entitled Broadband Equity: Addressing Disparities in Access and Affordability. At the center of the discussion was the Democratic Party’s desire to spend hundreds of billions of taxpayer dollars to encourage broadband deployment and adoption. While a good deal of political rhetoric was thrown about, it became clear during the nearly three-and-a-half hour hearing that if Congress wants to increase broadband deployment and adoption then it is essential that any new broadband legislation be firmly rooted in the economics of the broadband market and be informed by what we know about the broadband marketplace—including an honest recognition of the successes and failures of past efforts. Informed policymaking can reap rewards, while policies that ignore market fundamentals are doomed to failure.
By way of an excellent example, we can look to the bipartisan cooperation that produced FirstNet—America’s nation-wide, dedicated interoperable public safety network.
This fall will mark the twentieth anniversary of the horrible events of September 11th. Among several of the tragic lessons we learned that day was that our brave First Responders had no interoperable communications network, which stymied their ability to coordinate rescue efforts and warn each other of the pending building collapse. Recognizing this problem, former Senator Jay Rockefeller (D-WV) made it his personal mission to make sure that First Responders’ inability to coordinate with each other never happened again. Now, after nearly two decades, Senator Rockefeller and public safety’s shared dream is bearing fruit: FirstNet is fully operational and is helping First Responders to save lives in everything from national disasters to COVID vaccinations across the country.
Looking back, FirstNet’s success can be tied back to two major policy choices.
First, FirstNet’s success would never have occurred but for the political courage exercised by both Democrats and Republican Congressional leadership to resist calls to re-auction the dormant D Block in the prime 700 MHz band in favor of allocating this spectrum to public safety as part of the Middle Class Tax Relief and Job Creation Act of 2012. In so doing, Congress added a key additional 10 MHz of spectrum to public safety’s original allocation of 10 MHz, thus providing public safety with sufficient spectrum to accommodate the then-burgeoning “LTE” wireless broadband technology.
Even better, Congress’s decision had sound economic support. As demonstrated in a 2011 Phoenix Center study that was instrumental in the debate, because public safety is not a private use but a public service, allocating scarce spectrum to public safety requires policymakers to make the difficult tradeoff between auctioning spectrum that can produce significant revenues or making that spectrum available for non-economic but socially valuable uses. Thus, if Congress takes spectrum away from public safety for the realization of current revenue today, then it is entirely possible that it will cost taxpayers much more money tomorrow if policymakers need to go out and find additional spectrum as public safety’s needs evolve. In this particular case, Congress recognized our logic and made the right call: Congress was both able to save taxpayers money and facilitate the roll-out of FirstNet with dedicated spectrum to meet the dynamic challenges faced by the public safety community.
The second correct policy call was Congress’s wise recognition that building a new, government-owned and -run stand-alone public safety network from the ground up would be cost prohibitive, would take years to build, and may never achieve coverage parity with commercial networks. For that reason, in 2016 the U.S. government issued a Request for Proposal (“RFP”) to see if a private carrier might be able to administer the FirstNet program more efficiently by leveraging and building upon its existing network assets. While the RFP process was competitive and contentious, in March 2017 AT&T ultimately won the contract by virtue of its nationwide network coverage, its extensive spectrum portfolio, and a commitment to invest an additional $40 billion over the life of the contract to build, deploy, operate and evolve the FirstNet network. Nine months later, FirstNet announced it was open for business with all 50 states, the District of Columbia, and the five U.S. territories opting into the plan.
Since FirstNet formally got off the ground three years ago, its growth has been prodigious. As of April 2021, FirstNet is providing service to more than 16,000 public service agencies and organizations, accounting for more than 2.2 million “always-on” encrypted connections with priority access—a specialized service that conventional commercial wireless offerings are ill-equipped to do.
The same logic Congress used in 2012 should again hold for current efforts to accelerate broadband expansion generally. FirstNet demonstrates that it is far more efficient to subsidize existing providers to expand their service than to promote greenfield municipal broadband networks that will crowd out the private sector and require years of far greater subsidies just to remain financially viable.
FirstNet is a shining example of how the American people benefit when Congress identifies a problem, properly applies the economics, embraces the private sector as a partner subject to strict accountability and oversight, and then works together in a bipartisan way. In these hyper-partisan times with billions of dollars on the line (not to mention potential massive tax hikes to pay for these expenditures), perhaps we could use a little more of that approach today.