Morning Wire - $42 Billion Spent & No Internet Yet | Saturday Extra

Episode Date: November 2, 2024

FCC Commissioner Brendan Carr explains why the Biden-Harris administration’s $42 billion broadband initiative has yet to connect any rural Americans to high-speed internet. Get the facts first on Morning Wire. Birch Gold: Text "WIRE" to 989898 for your no-cost, no-obligation information kit. Learn more about your ad choices. Visit podcastchoices.com/adchoices

In 2021, President Biden signed into law a $42 billion program to provide internet access to rural Americans. However, not a single American has been provided access through the program yet. In this episode, Daily Wire reporter Tim Pierce speaks with Republican FCC Commissioner Brendan Carr to learn what happened. I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's Saturday, November 2nd, and this is an extra edition of Morning Wire. It's stressful knowing you can't control the election's outcome, but you can take control of protecting your savings by diversifying into gold with Birch Gold Group. Birch Gold will help you convert an IRA or 401k into a physical gold IRA, safeguarding your hard-earned wealth. Text wire to 989898 to get your free comprehensive info kit on gold investing.

Trust Birch Gold, as I do, to protect your savings and secure your financial future. Again, text wire to 989898 today. The following is an interview between Daily Wire reporter Tim Pierce and current FCC Commissioner Brendan Carr. Hey, Commissioner Carr, thanks for joining us. To start us off, do you mind explaining for listeners what the BID program is and where it came from? Yeah, back in 2021, Congress passed the Infrastructure Act. And embedded within that was a $42 billion plan to expand Internet infrastructure to millions of Americans. And right when that law was passing, President Biden specifically asked Vice President Harris to lead this $42 billion plan. And flash forward to today, it's been more than 1,000 days since that plan was enacted into law. And not one home or business has been connected to the Internet through that

effort, not one person. And in fact, the administration has now come out and said that they won't even start a single project until sometime next year at the earliest, and in most cases, not until 2026. And so in my view, this makes the infrastructure plan being run by Vice President Harris, the slowest moving federal broadband buildout initiative in modern history. So what's wrong with this plan? Why has so much time passed with so little work actually done? Yeah, there's no question that this plan being run by Vice President Harris has gone off the rails. And the causes are a couplefold. One, the administration in implementing the law passed by Congress has decided to layer in a whole

progressive wish list of liberal policy ideas that have absolutely nothing to do with just connecting people. So, for instance, they've taken time over these past 1,000-plus days to adopt DEI requirements. They've inserted a climate change agenda. they've added in price controls. They have preferences for government-run networks over private sector one. So in other words, they've been using this $42 billion initiative rather than just connecting people to hand out wins to their favored constituencies. And it's rural America that's paying the price because instead of building, again, we're just out here looking out for these particular liberal

constituencies. There's more to it than just that, though. If you go beyond the fact they've layered in all of these excessive regulatory requirements, there's just dysfunction throughout the program. So, for instance, there was reporting recently from Politico that talked to several insiders working on this program, either at the federal level or the state level, and they just talk about dysfunction, finger-pointing, a blame game, other state officials that have had to deal with this program, say they're either getting conflicting advice, no advice, advice that changes midstream. So just purely from an actual competency of government in implementing this initiative with Vice President Harris at the helm, there's been just a lot of dysfunction. So the delay is a

couple of things. Again, it's sort of pursuing these excessive political goals, but also a failure to just competently administer this program. You know, look, at the end of the day, federal subsidy programs are very complicated, very difficult in and of their own right, but they've gone and made it basically impossible by layering on these additional requirements. What do you think the administration is trying to accomplish by administering the program this way? Yeah, there's a lot there. Again, on the one hand, there's layering in all these DEI requirements and hiring preferences, but there's also preference for union labor. And like, we're going to have a real problem if and when these builds actually start getting

underway with a workforce shortage as a general matter. But when you start putting preferences for union labor and others, you're only sort of further constricting the pool of available workers. And so I think there's just been made a decision from the top to run this program in a way that's going to benefit these constituencies. And it's only, you know, slowing down and delaying the day that we can actually connect rural America to high-speed internet. We, you know, we should have just stayed narrowly focused on delivering on that goal. What is the primary reason for the delay up to this point? Are the preferences for union labor creating a bottleneck for getting the actual work done. They will create a bottleneck. We haven't even reached the point yet where the

bottomneck is going to happen. The delay up to now, though, has been taking the time to adopt all of those requirements that have union labors, that have the climate change agenda, that have the DEI preferences. That's part of what's been slowing us down. If you look back as late as last year, the Biden-Harris administration was saying that they were going to turn dirt this year, that they were going to start construction this year. And now that's slipped. Again, that's not going to start until sometime next year at the earliest. I was just in Pennsylvania, a couple weeks ago at this point holding a roundtable meeting directly with some of the stakeholders that were supposed to benefit from this $42 billion program.

Pennsylvania alone was supposed to get over a billion dollars of it. I was meeting with educators, with health care workers, with just people involved in economic development. They want these dollars to flow. They want the shovels to start turning. They want their communities connected, but they're being left behind because the administration has prioritized things other than connecting them. So for Pennsylvania in particular, for instance, they have a state plan that's been approved now by the Biden-Hittress administration, and it weighs equitable workforce considerations 10 times more heavily than speed of deployment.

You know, so these state plans are supposed to lay out. We'll give 10 points if it's a diverse workforce. We'll give one point if they can move quickly in building it. It just shows that the priorities are very skewed right now. Now, back in 2020, the FCC awarded an $885 million. grant to Elon Musk and Starlink to connect a bunch of rural homes and businesses. What was that and what happened to it? Yeah. Back in 2020 during the Trump era, the FCC conducted a award to incentivize providers

to serve rural America. Starlink was one of those winners. They got over $800 million to serve over $640,000 rural homes and businesses and all was going according to plan. And then abruptly, in a party-line vote, last year, the FCC, the commission itself, voted to revoke that award. And I dissented because, as I explained at the time, that wasn't a decision that could be explained by any sort of objective application of the facts, the law or sound policy. It looked to me to be just purely regulatory lawfare against Elon Musk. Now, flash forward to today, the basis that the FC articulated last year for revoking was we don't think Starlink can actually provide reliable, high-speed internet to these communities. Well, Western North Carolina was one of the very communities that Starlink won based in 2020. And right now, private sector, to some extent the government, have been rushing Starlink kits into Western North Carolina because a lot of the terrestrial networks were taken out and we still have a lot of unserved areas.

is there. So again, the very same parts of the country where the FCC said last year could not be reliably served with Starlink or the exact same parts of the country that are being reliably served today by Starlink when nothing else works. And I think that's just further confirmation of the political nature of the FCC's decision to revoke. So it seems like between Starlink and fiber, you think Starlink would be a better option for rural communities. Why? Yeah, there's two reasons for it. One is speed to deployment, and the other is cost to the taxpayer. So whether you're using Starlink or Soon Kuiper, a competing technology, or fixed wireless, you can bring high-speed internet to rural communities in a matter of days in some cases. If you wait for the approach the Biden-Harris

administration has been taking, which is almost exclusively a technology called fiber, which involves, you know, trenching and pulling lines. You're talking years. So speed to deployment matters. In a lot of cases, I think fiber is the right choice, but for certain communities, particularly in rural areas, you're going to want to go with Starlink or fixed wireless. The second issue is price. So the award that we provided a Starlink back in 2020 would have ensured that they served all of those areas for just $1,300 total in federal subsidies. Right now, the Biden-Harris administration, where they are building, again, they're not building through the $42 billion program, but other programs that,

Vice President Harris isn't running, the federal government right now is spending in excess of $100,000 per location to connect. So again, we had to deal with Starlink to do it for $1,300 per location that was revoked. And now the government where they are building is doing it with dollars on the penny. And so I do think we need to return to a technology neutral approach and a politically neutral approach and make sure that the best technology wins out rather than using these processes to score political points. Wow, that's a massive difference in cost. Why is Starlink so much cheaper? There's no question that there are a certain amount of excessive costs that are being imposed from regulations, but I think the main driver is just the differences in the technology. Again,

when you have fiber, it can cost you anywhere between $50,000 to $60,000 to run a mile of fiber. Again, you've got to get all these machinery out there. You've got to dig trenches. You've got to pull the fiber through it. Maybe if you're lucky, there's utility poles and you can cash the utility pole so it's slightly less expensive. You're talking about parts of the country that have, you know, less than one person per square mile, you can see how you can get to $100,000 per location without necessarily even gold plating. It's just that's the cost of building fiber. And so we should be looking for more cost-effective solutions for the American public if we're being good stewards of their money. And it's those types of places where it's excess of $100,000

where we should be looking at Starlink or other technologies instead. But if you go back to the specific program that Vice President Harris is running, the $42 billion one, there's two things going on. One, we are artificially increasing the costs of broadband builders to participate in this program through all of these excessive regulatory requirements. At the same time, they're imposing price controls to drive down the ability of the providers to recoup these excessive costs. The outcome is obvious. We are seeing right now associations that represent hundreds of broad Builders across the country, sending in letters to the Biden-Harris administration sounding the alarm saying, if we stay on this course, excessive costs and price controls, we're simply not going to participate in the program

because it's not going to make economic sense for us to do. So this program that Vice President Harris is running is really on life support at this point. So to shift back to the Biden-Harris broadband program, they've now pushed back their timelines again past the election. Do you think this program will ever be feasible? On the current track, this is not a program that is going to succeed. You already have a handful of states that are saying, even though we're getting billions of dollars, it's not enough because of the policy choices that the administration has said, they're saying they're not going to be able to connect all the unserved communities in their states based on this amount of money.

And remember, the total pot is $42 billion. That is enough money to fully and finally end the digital divide in this. country if the implementation is right. But there's already states themselves that are saying it's not going to be enough. So it's not purely a matter of timing anymore. It doesn't matter how much time they take. They're just not going to have the funding. Now, the program itself was set up as a backstop to have all of these projects completed by 2030. And one of the things, it's sort of funny, the administration is doing is saying, well, we haven't missed any deadlines yet because we haven't passed 2030. But 2030 was the deadline to get it all done. And right now, again, they're talking about,

not starting until 25 or 26, and we're talking four to five year build cycles. And I'm not a mathematician, but four to five years plus 2025, 2025, 2026 puts you past 2030. So at this point, you know, the odds of success on the current track are single-digit percentages at best. What are the economic cost to these delays? Oh, it's tremendous. There's a real significant cost that comes from delays, and you can put it probably in two buckets. One is just the direct cost of we've got broadband builders that are ready to go and trying to hire up, but the funds aren't flowing to them.

And so those small businesses, and a lot of these are small businesses that do the actual construction, are not getting the money that they thought they would because the program is delayed. But the second bucket, and probably the bigger bucket, is the economic and opportunity cost for rural America. You know, so much of a lot of our lives have shifted onto the internet, whether it's for telehealth, whether it's for educating our kids, whether it is for remote work, and all those opportunities that we promised in 2021 that people in rural America would have on equal footing with everyone else, regardless of zip code, isn't being done. These are communities that are remaining stuck needlessly

on the wrong side of the digital divide. Again, the consequences are real. Just look at Western North Carolina. If we had not revoked the Starlink authorization, if we had allowed them to go forward and serve those communities, we would have been in a materially better position in terms of connectivity when those storms hit than we ended up being. So there's a real cost here to these delays. Commissioner, thanks for coming on.

All right, appreciate it. Good to connect. That was Daily Wire reporter Tim Pierce speaking to FCC Commissioner Brendan Carr. And this has been an extra edition of Morning Wire.