Competition could fill broadband gaps

The rapid technological advancement our state has seen in just my grandparents' lifetimes is astounding. My great grandfather used a horse and plow before eventually purchasing an electric tractor. Neither of my grandparents had indoor plumbing or electricity until they went to Cresco High School. Today, I can look up information on anything I can think of, train myself in new skills and functionally change my life just through the knowledge and communities available on my cellphone.

With this enhanced quality of life comes natural expectation inflation. When I consistently lose cellphone reception on Highway 20 between Manchester and Dubuque, it genuinely drives me crazy. When visiting a friend on a farm and my Google maps stops working or their internet is wildly slow it doesn’t compute in my brain that today's “slow loading” is lightning speed compared to 1990s internet capabilities.

According to a recent report from the Mercatus Center, where I work, over 90 percent of U.S. households have high-speed broadband. Still there is a very expensive, small cluster of rural households in Iowa falling behind in broadband access. They are “expensive,” because since 1996 millions in federal funding has only made marginal impacts on Iowa’s rural internet access.

Looking further into those numbers, in 2018, 98 percent of urban households had access to fixed, high-speed broadband but only 89.7 percent of rural households had access to such services.

Federal funding for rural broadband finds its modern source in the Telecommunications Act of 1996, which added a statutory “universal service” objective that the Federal Communications Commission (FCC) ensure that telecom services in rural areas, one, “are reasonably comparable to those services provided in urban areas” and two, “are available at rates that are reasonably comparable to rates charged for similar services in urban areas.”

Congress also requires telecommunications providers to use part of their revenue to subsidize telecommunications in rural areas, similar to how a portion of the cost of gas supports the highway trust fund. However, these subsidy programs called “high cost” funds initially established to bring rural households up to speed, haven’t quite done their job considering the return on investment. Iowa has 454,813 rural households with an average of $442.57 in rural universal service funds invested in 2019.

Billions of dollars have been spent nationally since the creation of the universal service fund and while there have been marked successes, it’s worth considering whether a more competitive model that emphasizes service and speed would work better instead of funding the broadband facilities themselves.

Similar to certain models for school choice that allowed parents to use a fixed amount of money to fund whatever education style suits their child best, rural households could be empowered to decide what broadband provider to purchase from. If any institution, whether it be a school or internet provider, has to compete for customers, they are incentivized to improve their customer service and overall quality.

Rural vouchers would also solve the difficult problem of funding disparity between states. For example, households in Vermont receive over 60 percent more total High-Cost Support funding than their neighbor New Hampshire. This is particularly strange when considering that New Hampshire has about 30 percent more rural households.

This increase in funding doesn’t necessarily mean households in a higher funded state have higher quality internet or service. In fact, there is a lack of pattern and consistent results from these program investments.

All of this is to highlight how throwing money at an imperfect system will not fix the system itself. We need to fix the cracks before filling the vase and remember to be grateful for the rapid internet innovation we’ve seen in 25 years.

Patricia Patnode is a Gazette editorial fellow. Comments: patricia.patnode@thegazette.com