A Matter of Priorities

Sometimes, less really is more

To justify his repeal of net neutrality in 2017, then FCC Chairman Ajit Pai wrote that deregulation would "bring faster, better, and cheaper Internet access to all Americans". Yet, according to a study by the group Free Press, over the course of the next 3 years the average Internet subscribers bill actually rose over 14%, a rate of more than double the rate of inflation.

At the same time Chairman Pai was promising a new era of cheap Internet, broadband providers were slowing investment in their infrastructure. For example, AT&T dropped capital investment 52% from 2016 to 2020. Comcast's dropped 22% in the same period. The rising prices and slowing investment help the large providers to some of their most profitable years, even during a pandemic.

In short: Providers stopped investing in infrastructure but kept raising prices

Faced with the reality that many Americans, especially those in rural areas, were still struggling just to get connected in early 2020 Chairman Pai led the FCC to finalize rules for a new $20.4 billion program intended to expand rural internet access. Named the Rural Digital Opportunity Fund (RDOF), funds were to be granted in 2 phases starting with the first $9.2 billion late 2020.

Yet, like the similarly flawed CAF-II program, it relies on bad data. The FCC uses data from the providers themselves to determine eligibility by census block, a flawed method because even if only a single location is served then the entire census block is considered served.

Hold on though, because it gets worse. The data itself is horribly inaccurate, leading to funds being completed wasted. According to a report from the Competitive Carries Association (CCA), some funding ​“will subsidize broadband deployment in areas that obviously are served, including some of the nation’s wealthiest, most densely populated areas.” The CCA estimates that because of bad data, nearly 6% will be spent on already served areas at a cost of nearly $1 billion.

In short: FCC mismanagement costs taxpayers billions and hurts programs designed to expand Internet service

If any of this sounds familiar, it might be because of recent news coverage of bills from Senator Nesbitt and Representative Griffin intended to expand Internet service. Using a similarly flawed approach as the RDOF, it would allow internet providers to receive a potentially huge tax break in exchange for little to no service expansion. The bill was vetoed by Governor Whitmer.

Since then, Senator Nesbitt has continued to attack the Governor for her veto, but has thus far refused to change tack and correct the massive flaws in his bills. If you’re wondering why he might be so adamant to take this approach, his reaction to the resignation of FCC Chariman Ajit Pai says a lot.

Despite years of skyrocketing prices, limited expansion of service and potentially billions in wasted spending, Senator Nesbitt considers Chairman Pai's resignation a "big loss".  This is the vision that Senator Nesbitt has for Michigan, one guided by an industry-first and consumer-last mentality.

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