Public-private partnerships key to providing high-quality broadband to all

We are long past the argument about why, in the age of COVID-19, internet service is a key part of America’s new “essential infrastructure.” Connectivity is critical. That would suggest that anything President Biden and Congress legislate for improving the internet should be a plus for the nation. Think again.

As often happens, what may at first sound good, logical and appropriate doesn’t quite live up to its promise in the end. This is especially true when talking about enormous government spending programs with usually lofty-sounding names such as the “American Recovery Plan,” where intent and outcome are often wildly mismatched.  This is precisely what’s shaping up to be the case with the “billions for broadband” about to pour out of Washington. The funding sounds good, but it is not aligned with the reality faced by many individual states, counties and towns. 

Take Maine, where I live. Maine is #50 in the U.S. with respect to choice of internet service providers (ISPs). To put it another way, Maine is #1 in terms of monopoly control by private companies that provide internet service. 

Not coincidentally, Maine residents pay among the highest average rates for some of the worst service in the U.S., with huge areas of the state not covered by broadband or, in some cases, even old-fashioned internet DSL cable. A big explanation for this is that, as President Biden has reminded us, competition has long proven to be the underpinning for the “best in class” provision of goods and services. Where there is no competition, this outcome is unlikely to be achieved.

In rural – as well as some poor urban – areas, the “business model” for private ISPs “prevents” them from offering service. That is to say, they can’t make the minimum profit margins that they require. And they’re right. They can’t. For these areas (like mine in Maine, one of America’s most rural, least wealthy and oldest-in-average-age states), the result is no choice of ISP. If we accept the mantra of post-COVID America that fiber broadband is essential to 21st century living (education, remote work, telehealth, entertainment and the rest), then we have to find a solution to this problem that affects huge swaths of both urban and rural America. 

The Benton Institute for Broadband and Society has identified the solution: public-private partnerships where public entitles – mostly states, counties and towns – work with private ISPs to “top up” service in unserved or underserved areas.  

The “public” part of this new kind of collaboration would rely on towns, groups of towns and counties adopting the “municipal broadband” model and working with existing and prospective internet service providers. Municipal broadband has been demonstrated in dozens of counties, towns and zip code tracts in larger cities to be the best way to provide high-quality broadband to unserved and underserved areas.

Essentially, municipal broadband creates a public entity (or utility) to own the fiber infrastructure that is built and operated (“lit”), under agreement with the public utility, by private companies. The companies that build and operate are often, but not always, the same entity. If the public utility is the recipient of public money (from the federal, state, county or city/town governments) then it is able to commission and oversee the operation of broadband in areas that would not otherwise be “commercially viable” for private companies. 

On the other hand, if public money is not explicitly earmarked for public utilities, then private companies can – and will – reap the lion’s share of these public funds. For them, it will simply become another revenue stream and not find its way to the unserved areas that were, and still will be, left behind. 

The one thing that can drive this focus on public-private partnerships would be if the implementation rules directing the spending of the billions that the U.S. government is about to unleash gave preference to such arrangements. The upcoming effort to repair the embarrassing  world ranking of internet in the U.S. with respect to both penetration (U.S. #21, behind, for example, Malta, Greece and Portugal)  and speed (U.S. #11, behind for example, Hungary and Romania) will not succeed without these implementation directives.  

Both Congress and the relevant executive branch agencies that will be responsible for the management of allocating funds need to adopt clear, strict rules directing that these public-private partnerships be fully explored. Examples of ways to do this include giving preference to public-private partnership funding requests, requiring a certain percentage of all taxpayer monies to flow to public entities and requiring fully transparent, public processes in the decisions to allocate such taxpayer funds.  

The Rural Electrification Act of 1936 was the underpinning for turbocharging America’s next phase of growth: providing electricity to every home, business, farm and building in America. The internet is the electricity of the 21st century; indispensable for every aspect of society. We must be as focused as we were in 1930s on ensuring public money for this critical infrastructure finds its mark.

Steven Koltai is a member of the Lincolnville, Maine, and Midcoast, Maine, Broadband Committees, a research affiliate at MIT’s Center for International Studies and a non-resident senior fellow in the Governance Studies Program at the Brookings Institution. He lives in Lincolnville, Maine.