My testimony to the Pennsylvania Senate about rural broadband

by on November 15, 2019 · 0 comments

A few weeks ago I was invited to provide testimony about rural broadband policy to the Communications and Technology Committee in the Pennsylvania Senate (video recording of the hearing). My co-panelists were Kathyrn de Wit from Pew and Prof. Sasha Meinrath from Penn State University.

In preparing for the testimony I was surprised to learn how much money leaves Pennsylvania annually to fund the federal Universal Service Fund programs. In recent years, a net $200 million leaves the state annually and is disbursed at USAC and in other states. That’s a lot of money considering Pennsylvania, like many geographically large states, has its own broadband deployment problems.

From the Intro:

The federal government has spent more than $100 billion on rural telecommunications in the past 20 years. Most of that total comes from the federal Universal Service Fund (USF), which disburses about $4.5 billion annually to rural providers across the country. In addition, the Pennsylvania Universal Service Fund redistributes about $32 million annually from Pennsylvania phone customers to Pennsylvania phone companies serving rural areas.

Are rural residents seeing commensurate benefits trickle down to them? That seems doubtful. These programs are complex and disburse subsidies in puzzling and uneven ways. Reform of rural telecommunications programs is urgently needed. FCC data suggest that the current USF structure disproportionately penalizes Pennsylvanians—a net $800 million left the state from 2013 to 2017.

I made a few recommendations, which mostly apply for state legislators in other states looking at rural broadband issues.

I also came across an interesting program in Pennsylvania spearheaded in 2018 by Gov. Wolf. It’s a $35 million grant program to rural providers. From the Governor’s website:

The program was a partnership between the Office of Broadband Initiatives and PennDOT. The $35 million of incentive funding was provided through PennDOT to fulfill its strategic goal of supporting intelligent transportation systems, connected vehicle infrastructure, and improving access to PennDOT’s facilities. In exchange for incentive funding, program participants were required to supply PennDOT with the use of current and future network facilities or services.

It’s too early to judge the results of that program but I’ve long thought state DOTs should collaborate more with state telecom officials. There’s a lot of federal and state transportation money that can do double duty in supporting broadband deployment efforts, a subject Prof. Korok Ray and I take up in our recently-released Mercatus Paper, “Smart Cities, Dumb Infrastructure.”

For more, you can find my full testimony at the Mercatus website.

The Ray-Skorup paper, “Smart Cities, Dumb Infrastructure,” about transportation funds and their use in telecom networks is on SSRN.

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