Tech news blogs were abuzz over Senator Warren’s plan to spend $85 billion to create a “public option” for rural broadband yesterday, but the plan is much less consequential than they think. You wouldn’t know by reading the blogs, but the public option is a small part of a much larger plan for government investment in rural areas; Warren pitches it as her “Plan to Invest in Rural America.”
The overall plan calls for spending upwards of $3 trillion over an unspecified period of time in both rural and urban areas on a variety of initiatives:
- $2 trillion in green energy jobs
- $400 billion on green energy research
- $100 billion on opioid intervention and treatment
- $85 billion on broadband in both rural and urban areas with “minimal competition”
- $25 billion on rural healthcare facilities
- $20 billion on worker apprenticeships
- $16 billion on medical training programs
- Unspecified sums for repayment of student loans and free college going forward
- $15.5 billion on a variety of other programs such as startup capital for minority businesses, mortgage relief, and housing
So this is only marginally a broadband program and arguably not even one that is well-focused on rural issues; it’s the Green New Deal hiding its pink hair under a straw hat.
Exaggerating the Problem
$85B will go a long way towards upgrading rural broadband if it’s spent carefully. As of 2017, 26.4% of rural census blocks didn’t have any offers of 25 Mbps broadband, a figure bloggers and politicians like to cite.
Broadband Progress Toward 25 Mbps Goal
Given broadband buildout and upgrade trends since 2013, today’s figure is probably about half that, 13.4%. We’d like it to be lower, but it’s probably never going to fall below 5%.
Another set of figures is probably more meaningful for rural America, the percentage of regions with either 25 Mbps fixed broadband or mobile LTE at 10 Mbps or better. This metric was essentially 100% for urban America in 2017 and 90.8% for rural. This extrapolates to 93.4% in rural America today.
Offering a Token Solution
Warren’s plan calls for 100 Mbps (both up and down) over fiber to every home in the US. That’s a nice goal, one that the 2009 National Broadband Plan estimated to cost $350 billion for installation alone.
The greatest part of this expense falls on the homes that are hardest to reach, so the fact that 30% of the US has such service already doesn’t significantly reduce the price tag. So Warren is offering a token program that would run out of money long before reaching its goal.
And most of the money would go to urban areas, leaving rural America to get by with current subsidy levels. This isn’t a plan to improve life in rural America at all.
Poorly Targeted
Because the Warren’s program includes urban areas with “minimal competition” it’s unlikely that rural America would see more than 10% of the money. Advocates of government broadband regard anything less than four competitors as “minimal”; we’ve seen that rhetoric on display in their criticisms of the T-Mobile/Sprint merger.
Warren insists on fiber to the home despite of the fact that cable modem service is already providing low-cost service as well as high performance gigabit service. Comcast just doubled the number of homes eligible for its Internet Essentials program and cable companies offer 1000 Mbps service, 10 times faster than Warren’s goal.
5G trials show download speeds as high as 1.6 Gbps, 16 times higher. Fixed location 4G and 5G will make strong impacts in the parts of rural America that have pokey speeds today as they enable technical features such as carrier aggregation and higher efficiency that dramatically increase speeds in the mid- and low bands practical for rural use.
Wide of the Mark on Farming Issues
The Warren plan misses the mark on the quintessentially rural issue of farming. The final section of the plan, Building a New Farm Economy, reads like an afterthought.
It complains that the average farm size has increased from 155 acres in 1935 to an average of 444 acres today by blaming “giant agribusinesses” instead of displaying genuine insight. With a declining pool of farm labor and competition from low-cost, foreign suppliers, farmers have been forced to become more efficient.
The top-selling row crop tractor of the 1930s, the Farmall F-20, sold for $1000, $18,696 in today’s dollars. A used John Deere row crop tractor can easily set you back $300K today without even including all the pricey attachments for planting, precision farming, and harvesting.
Farming has Made Enormous Progress Since the 1930s
Modern farming protects the environment through efficient use of land and farm resources. The practices are largely enabled by high tech, precision farm equipment with high price tags. Comparisons of farms today to those of the 1930s are useless.
The tractors of the ’30s competed with horses, but today they’re marvels of engineering that do jobs once relegated to seasonal workers or not done at all. Of course farms are bigger, but 97 percent of them are still owned by families even if they’re legally LLCs. Warren promises to review all farm mergers, but that’s just going to cause rural headaches.
During the Obama Administration, Warren joined fellow Democrats in voting in favor of mandatory labeling of foods grown from biotech seeds. This move, despised by farmers, served no genuine public purpose and was seen by farmers as grandstanding by out-of-touch urban elites. So Warren brings baggage to farm country.
Disguised Urban Issues
While I expect rural America would appreciate easier access to health care, I don’t think Warren’s attempts to pass off clean energy, green jobs, and student loan repayment as rural issues are going to fly. Certainly, education matters in rural America where most farmers are college educated.
But you don’t learn how to farm in the Ivy League unless you go to Cornell, and most farmers study at state schools such as Florida, UC Davis, Texas A&M, and Kansas State. They don’t graduate with crushing debt that requires them to move to the cities to take non-existent jobs for non-farming farmers.
Energy research is fine, but most of what passes as “green” tends to be too ideological to be useful. We already know how to reduce greenhouse gas emissions:
- Rely on safe, reliable, non-GHG-emitting power sources such as nuclear, hydropower, and geothermal
- Develop low cost, low impact storage for intermittent power sources such as wind and solar
- Improve the efficiency of fossil fuels where we genuinely need them (in tractors, for example)
- Reduce waste
Government has a very poor track record when it comes to investing in clean power; both the Clinton and Obama Administrations shut down promising research on nuclear systems such as the Integral Fast Reactor. Climate change is too important to be left to elected officials who value pandering to popular sentiment over pursuing serious science.
A Rural Development Plan Only an Urban Hipster Can Love
The Trump trade war with China has created an opportunity for smart politicians to weave their way into the heart of rural America. China has stopped importing food from the US, creating a $6B disaster for Trump supporters in rural America.
But a rural development plan that consists of little more than urban issues isn’t going to get it done, any more than rooftop solar and windmill farms are going to supply base load power. The broadband plan is especially toxic because it makes an outdated technology choice in passing off a backhaul technology – fiber – as a last mile solution.
The most remarkable feature of Warren’s broadband subsidy program is its arrogant rejection of the only organizations with serious expertise – large and small commercial ISPs and WISPs – from the pool of eligible recipients. If ISPs are all so horrible and the program is designed to prevent fraud and abuse, any party large or small, non-profit or for-profit, public or private should be allowed to bid on projects.
Warren is simply signaling that she’s more interested in creating division than in solving real problems, and we’ve seen enough of that sort of thing already.
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