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- Co-Ops Are The Rural Broadband Answer
Scott H sent in a piece about rural broadband, which is being used as an example by people like Ezra Klein of how government over-regulates and keeps us from getting good things:
In late 2021, Klein explained, Congress passed and Joe Biden signed a major infrastructure law that contained $42 billion to subsidize the construction of broadband networks in rural areas that lack access to high-speed internet service. But more than three years later, not a single home had been connected by the so-called Broadband Equity, Access, and Deployment (BEAD) program.Indeed, he noted, not a dime of that $42 billion had even been spent.
The reason, Klein went on, has to do with a “baroque” 14-stage implementation process for how BEAD funds can be distributed from the federal government to state governments, and ultimately to internet providers. To give Stewart a full appreciation for the bureaucratic nightmare this entails, he listed the steps one by one. States submit a “Letter of Intent,” a request for planning grants, a “5-year Action Plan,” an “Initial Proposal,” and a “Final Proposal,” with long federal review and approval periods in between. […] The federal government publishes a map of where broadband needs to be built, states challenge the map for accuracy, the feds review and approve the challenge results. […] Notice and comment periods are sprinkled in throughout. No state, Klein explained, had made it past the “Final Proposal” stage. Stewart sat in apparently stunned silence, later quipping that BEAD is not a broadband program at all, but rather an “overcomplicated Rube Goldberg machine that keeps people from getting broadband.” To Stewart’s pleas for an explanation of how this defective process came about, Klein responded simply, “This is the Biden administration’s process for its own bill—they wanted this to happen.”
The accuracy of the story, however, has come under question. In April, Bharat Ramamurti, a former member of the Biden administration’s National Economic Council who worked on telecommunications policy, alleged that the BEAD implementation process was not a Biden or even a Democratic prerogative, but the result of a compromise with Senate Republicans during negotiations over the infrastructure law. According to Ramamurti, these Republicans had “insisted” on a cautious implementation design in part to monitor spending for waste, and in part “at the behest of large incumbent internet providers,” who wanted more opportunities to shape the program to protect their interests.
Klein corrected some of the story later, acknowledging the point that Ramamurti made about the slowness of the process being in part because all of the incumbent telco providers wanted to get their beaks wet. I don’t want to turn this into an Ezra-bashing fest, because he usually gets the facts right, but he should have done better on this one.
That all said, if the abundance folks, or Democrats, want a way to get more rural broadband out, quickly, they should look at telephone cooperatives. In my hometown, we have fiber internet that’s blazing fast and very reliable. It’s provided by a telco co-op. Here’s the really interesting part: both my dad and my mother-in-law pay roughly $90/month for 100/100 internet and a land line with unlimited long distance, which is an OK price. But, at the end of the year, the co-op sends them a dividend check of around $800-900. So their effective cost is between $20-30/month. Presumably if there was a disaster or a huge capital project, dividends would be less, but the dividend amount has been pretty consistent for years.
The reality is that telcos are incredibly profitable, and they drag their feet and fuck around providing rural broadband because it isn’t quite incredibly profitable enough. Co-ops don’t need to make a profit, so they can provide better service at a lower cost for what should be a public utility. My hometown also has a cable TV company that can provide Internet via cable, but everyone I know uses the co-op.
Co-ops were the way that rural areas were electrified, starting in 1936, because the Rural Electrification Act specified that money to bring power to rural areas had to be channeled through member-owned co-ops. There are dozens of them around here, still active, still providing power to their members. They’re a time-proven way for government to kick-start the process of providing a utility to rural Americans.
The notion that we have to effectively bribe businesses to provide a utility is a degenerate one that’s straight out of the Republican playbook, though plenty of Democrats have adopted it. The freak out over Mamdani suggesting that NYC have a few city-owned grocery stores is an example of how broken our brains are about this. If private enterprise can’t or won’t do something, government should step in and do it in a way that’s sustainable and affordable. Co-ops have an almost 100 year history of doing this. Time to use what works, instead of some Rube Goldberg mechanism that everyone hates. Abundant power and internet are supplied via co-ops across rural America. A true Abundance program would focus on co-ops, not wetting every incumbent providers’ beak.
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