As the Biden administration begins to spend $550 billion from a massive new infrastructure bill, different Cabinet members have assumed responsibility for putting that money to work.
Transportation Secretary Pete Buttigieg is sending money to repair crumbling road and bridges; Energy Secretary Jennifer Granholm is revamping the electric grid; and Commerce Secretary Gina Raimondo is deploying $65 billion to make sure every American gets broadband internet access.
In some ways, Raimondo might have the trickiest job. In an interview for Influencers with Andy Serwer last week, she gave an update on the work by noting, “It's so heartbreaking to spend time, as I’ve done, in rural America [when] there's no broadband for miles, hundreds of miles."
The industry group USTelecom has called the money to bridge the digital divide “a generational and hopefully transformational investment." Raimondo adds that it could be her legacy at the department. “This, done properly, will be comparable to any of the biggest infrastructure implementations in our nation's history,” she says.
A difficult problem to solve
The new money is split between $42.4 billion for grants to states for broadband projects and $14.2 billion for a program to provide a break on internet bills. Billions more is set aside for things like digital inclusion projects and rural broadband programs.
The bill directs money to the least-connected states. Every state gets $100 million automatically for broadband projects with the remainder being divvied up based on need.
The $14.2 billion for vouchers is creating a permanent $30-a-month-subsidy to give low-income Americans a break on their internet bill. The program, run by the Federal Communications Commission, replaces a temporary program instituted during the pandemic that enrolled over 6 million households last year.
A key challenge for fixing broadband is understanding the problem itself. The FCC and USTelecom have both mapped the areas of the country that aren’t connected, but experts still don't have a full picture of every area that lacks broadband.
An added issue is Americans whose internet is too slow to be useful. Recent data from Microsoft has found roughly 120 million Americans don’t use the internet at broadband speeds, defined as download speeds of 25 mbps and upload speeds of 3 mbps.
In rural and tribal areas, Raimondo says, the problem is that often connections simply don’t exist. She relayed a story from leaders of the Navajo Nation where school buses were still being used during virtual schooling — just to move paper assignments to students who lacked internet.
Raimondo is quick to add that a different problem exists in urban areas. “There's no rural Rhode Island,” she says referencing her small and densely populated home state. Everybody can get internet if they want it, but she said “it's not affordable”
‘It better be affordable’
While some local governments have vowed to institute more government-run internet services, most of the $65 billion will end up in the hands of private telecom companies large and small.
Raimondo — who cultivated a business friendly reputation in Rhode Island leading to her current role — also alluded to possible partnerships with businesses on new technologies down the road. That could mean Tesla and SpaceX CEO Elon Musk’s push to offer internet access from space as a means to connect hard to reach places.
“It may not be economical to lay fiber all the way through Alaska, for example,” she notes.
The Commerce Secretary does say her agency will hold businesses accountable by noting, "They will receive money from the government to do the right thing, but it better be affordable.”
Research has found that Americans pay on average $64 per month for their internet connection, but the price can vary by region. “Affordable isn't $100 a month,” Raimondo says.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.