Law360 (June 11, 2021, 9:56 PM EDT) — Communications giant AT&T is pushing back on elements of the Biden administration’s infrastructure proposals, particularly a plan to partner with local governments, asserting support for municipalities could become politicized and broadband affordability hasn’t reached a crisis level.
In a Friday blog post, AT&T policy executive Joan Marsh wrote that major internet service providers’ low-income broadband offerings have been overlooked as the White House hammers out a plan to invest billions in getting more Americans online.
“Contrary to claims that U.S. broadband prices are too high, the data demonstrate that U.S. broadband prices are comparable with those charged abroad and by municipal networks,” Marsh wrote. “More significantly, the debate about broadband pricing has largely ignored the specific low-income products that the industry has made available in the marketplace.”
Although the Biden administration originally proposed to spend $100 billion on helping more Americans access and afford the internet, the White House has since agreed to Republicans’ request to cut broadband investments down to $65 billion. The key tenets of the broadband infrastructure plan would target support to municipally owned networks, tribal governments, nonprofit organizations and electric cooperatives, potentially pivoting away from the direct subsidy model that generally allocates funding to ISPs and lets them decide where to invest it.
The administration also said it plans to address broadband affordability and familiarity issues that particularly prevent rural and low-income communities from getting and using the internet when it is available.
However, Marsh wrote that major ISPs have already been offering connectivity options targeted to struggling households, such as AT&T’s plans that sell for $5 or $10 per month and are eligible for a coronavirus subsidy program. She also pointed to broadband pricing data released last month by USTelecom, a trade association of which AT&T is a member, which indicated that broadband plan rates are dropping while the quality of service is rising.
“Given these marketplace options, there is no credible rationale for the need for price regulation to achieve the same result,” she said.
Instead, Marsh asserted that the federal government should focus on developing a more sustainable way to fund communications subsidies, which are currently exacted from a shrinking base of telecom companies.
AT&T CEO John Stankey said Thursday that he has reservations about the Biden administration’s desire to work with local governments seeking to operate their own municipal broadband networks. Telecom networks require ongoing investment, he noted during a virtual speech hosted by the Economic Club of Washington, D.C., something he said that local governments may not be prepared to offer.
“I’m not sure [that] giving the local government the authority or the subsidy to run a network and then politicizing the appropriations for those types of things is necessarily really good policy for the long term of the United States,” he said. “Capital allocation decisions like that should be based on the structure and the rigor of the market.”
The White House’s goal of working with municipalities to expand broadband is “probably a bit misguided,” Stankey said, but he commended the administration “on the bipartisan approach they’re using” to salvage an infrastructure deal.
Stankey suggested the administration should target the remaining rural areas that do not have broadband access with the infrastructure package funds and then work on implementing other policy changes to address affordability concerns.