On January 28, 2022, eleven Republican Senators wrote to Department of the Treasury Secretary Janet L. Yellen to voice their "deep concern" that Treasury's Final Rule for a $350 billion government subsidy program encourages the use of taxpayer dollars to construct broadband networks in locations where robust service already exists – a concern that Free State Foundation President Randolph J. May and I similarly raised in a recent Perspectives from FSF Scholars.
In "Self-Defeating Treasury Subsidy Rule Wrongly Champions Broadband Overbuilds," Mr. May and I noted with alarm how the Final Rule adopted by Treasury for the State and Local Fiscal Recovery Funds (SLFRF) program rejects the sound policy that subsidies ought to target those areas that lack adequate levels of service – defined by Congress in the Infrastructure Investment and Jobs Act as 25 megabits per second (Mbps) downstream and 3 Mbps upstream – and instead declares eligible any "location where the recipient has identified need for additional broadband investment."
We also pointed out that the Final Rule encourages applicants to rely upon "any available data" – not just the revised broadband service availability maps that Congress directed (1) the FCC to generate, and (2) NTIA and the states to rely upon exclusively in disbursing over $42 billion in grants via the Broadband Equity, Access, and Deployment (BEAD) Program.
As we concluded, "[i]n championing government-subsidized overbuilds of existing, privately financed broadband networks, the Final Rule discourages continued private investment, interferes with the efficient operation of the competitive marketplace, ignores congressional intent, and undermines achievement of the very goal it seeks to advance: universal broadband access."
The letter to Secretary Yellen makes a number of similar points.
Led by Senator Moran (KS), the eleven GOP Senators wrote that the Final Rule "will allow SLFRF recipients to fund projects in areas where broadband service is already or will be available – while continuing to leave truly unserved areas in our states without access to broadband" and "allows states to choose whatever information they wish to determine the availability of broadband in a given area."
Instead, the Senators urged Secretary Yellen "to ensure that SLFRF funds are focused on truly unserved areas to maximize the benefit to those Americans currently without broadband service."
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