NCTA: Broadband Subsidies Are Wasting Millions [Broadcasting and Cable]
The NCTA has released a comprehensive study examining investments made under the Broadband Initiatives Program (BIP) that was part of the 2009 economic stimulus. While the program's funds have now been exhausted, the U.S. Department of Agriculture's Rural Utilities Service (RUS) allocated over $3.5 billion over its two year lifespan.
NCTA's study found that the program has led to millions of dollars being used to build broadband in areas that already were already being served by other providers. The FCC originally estimated that it would take around $23.5 billion to ensure that broadband reached every household.
Now, because so much has been spent on building areas already served, it appears that it will take as much as $87.2 billion to achieve the FCC’s goal.
The goal of the broadband stimulus portion of the economic recovery act was to provide broadband access to areas that may not be financially feasible or beneficial for private providers to build.
Since the program began, the NCTA and many others have expressed concern over the funds being used as government competition in the form of overbuilding in areas where private companies already invested their own capital to provide broadband access.
This latest study shows that those concerns were legitimate. It examined three particular BIP projects, and a total of 85 percent of the households in the areas that received the funding were already being served by another provider. In fact, in one area, over 98 percent of the people in the awarded areas already were being served.
Using taxpayer dollars to build out high-cost areas that aren't already served by a private provider is a laudable goal. But when it results in government investment competing with private companies and wasting millions of dollars, while many Americans still don't have access to the promised broadband access, it's probably time for a serious review of the existing plan.