Washington State Requires That Broadband Infrastructure Subsidies Be Used For Competitive, Open Access Fiber Networks
Between COVID relief and the recently passed infrastructure bill, there's an historic influx of more than $60 billion being thrown at this country's substandard broadband networks. And, as you might expect, there's a lot of heavy lobbying and maneuvering by various parties to obtain that money, and/or ensure that it's actually utilized for the greater good.
Regional telecom monopolies like Charter and Comcast are busy trying to ensure the lion's share of that money ends up in their pockets, often by exploiting corrupt state legislatures, or gumming up the grant application process for smaller ISPs, cooperatives, municipalities, or city-owned utilities keen on getting into the broadband business.
Said monopolies have also spent years undermining more accurate broadband maps in a bid to downplay and obscure competitive problems, monopolization, market failure, and decades of federal and state regulatory incompetence and corruption.
Elsewhere, there's a concerted effort to try and ensure as much money as possible goes to the kind of open access fiber networks (see our recent Copia study on this subject) that actually encourage competition among numerous broadband providers. Many municipalities are keen on using the funds to build fiber networks with an eye on competition and affordability, the key obstacle to adoption.
Case in point: Washington is attempting to include language in their new state budget mandating that all broadband grants it obtains from the infrastructure bill (Broadband Equity Access and Deployment (BEAD) program) are used on open access fiber networks open to all competitors.
As defined by the Washington state budget, open access fiber networks are a network that offers nondiscriminatory access to and use of its network on a wholesale basis to other providers seeking to provide broadband service to end-user locations, at rates that include a discount from the provider's retail rates reflecting the costs that the subgrantee avoids by not providing retail service to the end user location."
Not too surprising, regional monopolies that have made their living for the last thirty years cordoning off broadband access into dominant regional monopolies aren't too keen about any of this. Coalitions that represent some of the biggest cable companies are already threatening to withhold broadband investments from underserved parts of the state if the state legislature doesn't back off the push:
Our member companies, even those with open access networks, don't support that mandate," said David Ducharme, director of the Broadband Communications Association of Washington (BCAW), in an interview with Telecompetitor.
BCAW members include some of the nation's largest cable companies, and according to Ducharme, those companies won't pursue funding for deployments in unserved areas of the state if the open access requirement remains in place.
It wouldn't be their policy to open up small slivers of their network," Ducharme said.
I can understand some reservations about this. There are instances where it's just not cost effective to deploy fiber, and it makes more sense to focus on something like 5G or fixed wireless, particularly in areas with difficult geography. Washington would be wise to embrace some flexibility when it comes to doling out the more than $1 billion in broadband grant money the state is expected to receive.
That said, at least Washington state is thinking about this and trying something to upend the status quo, which, in broadband policy, generally involves throwing untold billions in subsidies and regulatory favors at giants like AT&T and Comcast in exchange for job and network investment that always somehow arrives half-cooked, it if arrives at all.
NTIA language surrounding BEAD grants urges grant applicants to build open access networks, but falls well short of actually making that any kind of real priority. Both party's representatives at the FCC, meanwhile, can't even publicly acknowledge that telecom monopolies are harmful, much less propose any meaningful policy solutions that would upend their hegemony.
Without some tough guardrails designed to hamper monopoly dominance, the lion's share of funding will simply be dropped in the laps of the very monopolies responsible for the digital divide in the first place (by relentlessly lobbying to dismantle smaller competitors). Companies with long, rich histories of taking subsidies then under-delivering, usually with zero accountability.
We're already seeing that play out in states like Montana, where cable giants are happily hoovering up the lion's share of new funds to the detriment of smaller, more creative, affordable alternatives. Then, when those companies fail to fully follow through on their promises, everybody in the policy chain will stand around with a dumb look on their face pretending to wonder what went wrong.