The definition of “Bidenomics” was expanded to include universal internet access.
Over the summer, President Joe Biden announced a new program that aims to deploy $42 billion to get “every person in America” online by 2030. The Broadband Equity Access and Deployment (BEAD) Program was designed to bridge the digital divide, and states are currently working on plans to distribute these funds.
How big is the problem? About 1 in 4 Americans don't have broadband, or high-speed internet, service in their households, according to a 2021 Consumer Reports survey.
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In his remarks at a White House briefing announcing the program, Biden called access to the internet “just as important as electricity or water.”
The program was authorized by the Biden administration’s $1 trillion 2021 infrastructure package. Funding is going to all 50 states, with the two most populous states, California and Texas, receiving the largest sums. States with large rural areas that lack connectivity (such as Virginia, Alabama and Louisiana) are also among those receiving top-level funding.
"It's the biggest investment in high-speed internet ever,” Biden said.
With this new push for universal internet access, certain industries are sure to benefit. Here are three top stocks that could see growth in the coming years.
With 32.3 million subscribers, Comcast (CMCSA) is already the largest cable broadband provider in the U.S. That puts it in a strong position to benefit from the Biden administration's recent push for universal internet access.
Comcast has already benefited from the 2021 Affordable Connectivity Program, a $14-billion federal fund that has provided over 19 million households with a monthly subsidy of $30 or more to help cover broadband bills. Comcast, whose Xfinity cable and internet service is dominant nationwide, was one of the main beneficiaries.
Comcast stock is up about 17% year to date.
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AT&T (T) is another company that could benefit from the Biden administration's push for internet access.
The company already operates the nation’s largest network of fiber-optic cables. These cables have the ability to serve 19.7 million consumer addresses, 750,000 corporate buildings and more than 3 million business customer locations across 100 U.S. metro areas.
Maintaining this network is expensive — let alone expanding it — and government subsidies could ease the burden. During the White House press conference, Secretary of Commerce Gina Raimondo specifically mentioned that part of the newly announced BEAD grant would be earmarked for “manufacturing fiber-optic cable in America.”
AT&T stock is down 11.5% year to date, giving contrarian investors something to think about.
With 30.6 million wired broadband customers, Charter Communications (CHTR) is the second-largest wired internet provider in America.
Like Comcast, the company saw a windfall of government-backed income thanks to the Affordable Connectivity Program, and it remains in a strong position to capitalize on the new BEAD program. Meanwhile, the company is already investing over $5.5 billion to supercharge speeds across its network over the next few years.
"We are targeting that over 85% of our footprint will be capable of an up to 5 gigabits per second service by end of year 2025," said Charter President of Product and Technology Richard DiGeronimo during an investor presentation in late 2022.
Charter stock trades at a price-to-earnings ratio of 13.25 and the stock price is up nearly 17% year to date.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.