Tech Refactored

Understanding Broadband Subsidies Under the NTIA's BEAD Program

August 05, 2022 Nebraska Governance and Technology Center Season 2 Episode 49
Tech Refactored
Understanding Broadband Subsidies Under the NTIA's BEAD Program
Show Notes Transcript

Gus is joined by Kristian Stout, the Director of Innovation Policy at the International Center for Law & Economics. An expert in telecommunications and Internet governance, Kristian provides insight into the Broadband Equity, Access, and Deployment (BEAD) Program, as he and Gus discuss the challenges of connectivity, how the program is being implemented, and weigh in on the good, bad, and the ugly. 

For a deeper dive into the Broadband Map Project discussed in this episode, check out our previously released episode with Sarah Oh Lam, “Mapping Broadband Connections Across America.” 

As mentioned in this episode, you can find Kristian’s “Guiding Principles & Legislative Checklist for Broadband Subsidies” here.

Kristian Stout is the ICLE’s Director of Innovation Policy. Kristian has been a Fellow at the Internet Law & Policy Foundry, as well as the Eagleton Institute of Politics. Prior to practicing law, Kristian was a technology entrepreneur and a lecturer in the Computer Science Department at Rutgers University. Kristian has also served on the Broadband Deployment Advisory Committee for the Federal Communications Commission.

Follow Kristian on Twitter: @kristianstout

Links 
Nebraska Governance and Technology Center

00:02 This is Tech Refactored. I'm your host, Gus Hurwitz, the Menard director of the Nebraska Governance and Technology Center at the University of Nebraska.

00:13 Everyone cares about broadband internet, and that is our topic today, broadband internet and the efforts that the federal government is undertaking to make sure that everyone has access to it. In particular, we're going to be talking about a new universal service program called the bead program. That's B E A D for broadband equity access and deployment.

00:34 Our guest today is Kristian Stout. Kristian is the director of innovation policy at the International Center for Economics. And I should share that he and I both work with the International Center for Law and Economics. It's a Portland based think tank, uh, that I have an affiliation with as well. Kristian, welcome to Tech Refactored.

00:52 It's great to be here. Thanks Gus. So Kristian, let let's, uh, just start before we even jump into what the bead program is. Can you tell us a little bit about broadband internet and, uh, what, what it is and why we care about it. Uh, broadband internet is a, um, sort of a large umbrella term that covers a lot of different potential technologies for connecting individuals, households, and businesses to the internet.

01:17 Um, it encompasses everything from cable internet, which lots people have in their homes, Fiber like Verizon's FIOS product. Uh, and then in some places there's, uh, even older technologies like DSL that are all basically intended to create one large network for connectivity to the interenet. So thi- this is how, uh, as you say, businesses and consumers, everyone, uh, gets connected to the internet for a, a range of purposes.

01:43 That's right. So the, the bead program, this is a new program. Can you tell us, uh, what the program is? As part of the, uh, infrastructure investment in jobs act of 2021. Also, I might refer to as the, IIJA,  um, there was a piece of that called the broadband equity access and deployment program, uh, which the acronym is bead the idea behind the bead program.

2:06 As part of the IIJA was to put money, um, into broadband deployment, which is the project of connecting households and firms to the internet in places where it has traditionally been more difficult to get those people online for a variety of reasons. So just to, uh, uh, not bury the lead here about bead, when you say put some money behind this, we're not talking about a small amount of money.

02:30 No. How, how much money are we talking about here? Tens of billions. I- I uh, I believe it was around 44 billion right around there. Yeah. I think depend depending on how you count, and there are several different programs, it's somewhere in that 42 to 44 billion range. So, uh, not, not a small amount of money, no.

02:50 Before really getting into any of the details about this program, let's talk a bit about why we need government funding and other, uh, government funding that is, or has been available, um, over the years. Why can't I just move anywhere in the country and call up a telephone company or an internet service provider and expect that they're going to happily, uh, install internet service to my house?

03:15 So to be perfectly clear, theoretically, you could do that, it just might be so exorbitantly expensive for you to get them to come out and you would be expected to share some substantial part of that cost that, uh, you probably would not be able to accomplish that goal if you move literally anywhere in the United States.

03:31 Now, if you're in an area that is, uh, more densely populated, so I'm in New Jersey, very populated state. I can move pretty much anywhere in my state and expect that someone will be able to deploy internet to me pretty quickly. And they won't charge me for it. If you live in a place that's a little bit more remote, or if you're in a, a strange little part of your own state where there hasn't traditionally been a lot of telecommunication service deployed and you call

03:55 up, uh, the local provider and say you want connection, they might tell you sure that'll be $30,000. So it can be very expensive to get houses that have not been connected to the internet yet connected, just because the logistics of, um, running cables, installing equipment and getting you connected to local network nodes.

04:13 I assume that that 30,000 number, uh, uh, one that you, uh, picked advisedly– that's about what I've been hearing, um, over the last year or so–  the cost of running fiber optic cable over a mile, right? So if you live a, a mile away from the, the nearest, uh, ISP or network connection, it will literally cost them $30,000

04:35 to get fiber to your house in order to start offering you any service. Right, and- and 30,000 sometimes you'll hear stories about places that, uh, houses that don't have connection and someone gets shocked because, uh, they wanna get connection, they call up and they get they're told it'll be something like $30,000.

04:50 When you actually look at the cost, it's usually like a hundred thousand dollars in true costs. And then they're trying to cut a deal with the potential customer. So it's very expensive in some situations to deploy the stuff. So this isn't a new problem though. Um, back in the, the good old days of mob bell, if I wanted a, a telephone line, I could usually just call up the telephone company and say, Hey, give me telephone service.

05:13 In fact, uh, in telecommunications law, we have a, a concept called the carrier of last resort, which has a statutory obligation. If there isn't another telephone company that will offer a customer, a service, the carrier of last resort is required by law to provide this. How did that work? Isn't it expensive to run a, a telephone line, uh, a couple miles to a, a ranch house somewhere?

05:37 Yeah. It, it's still expensive to do that as well when it comes down to, and this is when you're gonna starting get into the public policy of how broadband deployment works. There was a decision made in the 20th century that we wanna make sure everybody gets connected to the, um, the phone network, no matter what.

05:53 There's going to be excessive cost generated. In some cases, we're gonna require the telephone companies to do this, but then the United States government is gonna factor that into decisions about how to subsidize that deployment and help remunerate those, um, those telephone companies somehow on the back end.

06:09 And there's lots of complicated formulas that they played with in different ways to try to make that something so that you wouldn't make the telephone company go broke, but that's essentially the public policy decisions are mid 20th  century. Yeah. So basically, uh, what you're saying is let's call it 1970. You call up, uh, your local bell telephone company and say, I want telephone service and they spend, uh, $3,000,

06:31 that- this is 1970 bucks, um, they spend $3,000 installing a telephone line to your house, and then they charge you, uh, $3 a month for phone service. Um, and the- the way that they're able to get away with that and still make some money is they pass that $3,000 along to everyone else in the network. So as he said, this is a, a policy decision, a social commitment to everyone having phone service,

06:56 um, which raises the question, why, why don't we just do that for the internet? You certainly could, it, it is a policy decision that you could make. Um, I think that the, the decisions that were made for telephone networks were rooted in an era where there wasn't as much pervasive access to technology and the ability to do these kind of deployments.

07:17 And it was sort of- it was viewed in a way where, well, if we don't force them to do this and we have this one large provider, we've gotta make them do it. Right. That was the background assumption. Nowadays, there are many different options for connecting the internet. There's many different technologies that theoretically could be used.

07:32 There isn't a single mandate where you could say there's first off there, isn't a single company that you can go to AT&T  had essentially a monopoly status for most of the 20th century over most of the telephone network. So the government could go to that one provider and say, "you need to do this," there isn't

07:47 a firm like that operating in the United States, even relatively large companies like, say Comcast, a lot of people think of. They don't deploy to most Americans. They have a lot of customers, but you would need to create, um, a mandate that would span all different kinds of providers, fiber cable, um, different kinds of wireless products.

08:06 It would be much more difficult to manage that sort of mandate in today's technology, and there are more cost efficient and social welfare, efficient ways to get to better deployment. Yeah. And you're, you're hitting on such a, a puzzle here over the course of the 20th century. It used to just be a telephone line was a telephone line.

08:24 All it had to be able to do was carry a voice, but today you've already listed a bunch of the technologies. We've got fiber, we've got cable, we've got DSL, we have wireless, we've got satellite wireless, all these different technologies which cost different amounts, but also have different performance characteristics.

08:43 So it's a lot harder to say, "well, which technology are we going to deploy," that's right. If we decide we're going to make this social commitment. Do we do it on the budget basis where the- the lowest cost technology that arguably can get an internet signal, that's the one we use? Well, that's kind of given folks who are relying on these subsidies, the short shift, right?

09:05 Well, okay. We're going to give them the best out there. You, you get the highest performance fiber. Well, now that's a pretty nice subsidy to folks living in hard to reach places. Right? So how you balance that is a lot more difficult. That's right. So starting to turn to the bead program who who's administering, who's running the bead program?

09:23 So it's being administered at the federal level, by the National Telecommunications and Information administration also known as NTIA. But it's actually a little bit more complicated than that. The NTIA is responsible for sort of administering this program, but the actual deployments happen at the state level

09:39 so individual state broadband regulators and- and related offices, what they do is they come up with a plan that describes where their deployment is lacking or where they need access to these funds in order to help people get on the internet for other reasons as well. Um, then they describe, uh, roughly what they believe is the right path to, to solving those problems.

09:59 And then they submit the proposal to NTIA and then NTIA will decide whether to, um, fund that project or not. So basically state governments or state organizations working with state governments are, uh, submitting grant applications. And essentially, yes, NTIA has a proposal or a process for awarding them. Mm-hmm , I'm going to put on my confused professor hat here for a moment and say, but- but Kristian, I'm confused.

10:24 You're saying the NTIA which is, uh, this federal agency that's part of the Department of Commerce is doing this, don't we have a Federal Communications Commission? And, and I, I look at my phone bill every month– okay. I don't actually, I pay my phone bill every month– and I, I know that on my phone bill, there's this universal service fee.

10:42 That's supposed to go towards making sure people have connectivity. Mm-hmm  what, huh? I'm just going to, that's my question. I'm confused, huh? Right. Even without being a confused professor, it's completely valid to be confused in this issue because frankly it's a confusing area. It's also sort of related to what we were speaking about a few moments ago.

11:02 It's a, a kind of an artifact of a bunch of different programs that emerged in the 20th century to try to make that connection to telephone networks work in hard to reach areas or for people who were low income. So there's, there's a lot of, um, Older programs that are running in place. So you mentioned USF Universal Service Fund– which is an, an umbrella of programs managed by the federal communications commission, the FCC– uh, it had different pieces.

11:25 There was Connect America fund. It originally started for phone, but it, it now applies for internet as well, trying to get deployment to high cost areas, uh, Lifeline has subsidies to low income households, there was originally, uh, during the pandemic, there was a program that FCC administered called the Emergency Broadband Benefit, which is now

11:43 I believe the Affordable Connectivity Program, it was made permanent, which also gives subsidies to help consumers pay for- for broadband and other services. So the problem with the USF, which the reason why the federal government went with bead and why there's problems with USF is that as you noted, you notice it on your plain old telephone service

12:01 bills. Uh, if you have a telecommunication service, the providers of those services are responsible for giving, um, a certain share of the, the revenues that they take in toward this universal service fund, which then gets sold out into these like smaller sub programs. There's a lot of contention in that program because increasingly more services and more consumer demand is shifting into broadband.

12:23 And a lot of broadband providers don't have to pay into the Universal Service Fund at all, as it currently is funded, which sort of creates, um, either shortfalls or creates greater demands on older technology providers in order to fund something, um, in a relatively inefficient way. So in the debate over USF, one of the things that, um, advocates talk about

12:44 is maybe we need to shift towards something like funding, these, uh, subsidies out of general revenue, so just general tax collections. That's essentially the concept behind bead on, in the, IIJA I don't, I don't recall reading Congress people actually explicitly saying it, but that- that's the model that this is running on.

13:01 It's trying to sidestep the problems the FCC has had, uh, with administering these USF programs, giving the money directly to the agencies that will be able to use it. So you you're, you're making a, a really subtle, but I think important to highlight, uh, a point here. Uh, we, we said that over the 20th century, the, the way that we made sure everyone could get phone service was if it was really expensive to provide one person phone service, you just made everyone else pay for that.

13:30 Um, and as we've transitioned from phone to internet service, we've kind of had this question. Who pays, who needs to pay into this pot of money, uh, that makes sure people can get service? And well, it's still phone users basically. Um, so you have a lot of these legacy, telephone systems, cell phone users, business users, who are putting all this money into the universal service program.

13:54 Um, and then it's being used to subsidize internet service, but internet service providers don't need to pay into this, so it's a, a big fight, um, uh, over who pays into this and the, the bead program is just kind of bypassing it. Yep. Sidesteps that problem. So what, what, what else, uh, the funding mechanism is different for the bead program,

14:15 uh, what, what else is different about the bead program than traditional approaches to getting people connected to the internet? I think one of the largest differences is the- the sort of two tier distribution method. I mean, it, it certainly, it's not unprecedented, but a lot of times the, the way the funding programs would've worked would be that like providers would, for instance, become eligible directly with working with the FCC for some sort of subsidization or, um, getting, uh, awards under different deployment programs to, to go out and connect people.

14:45 By putting it in the NTIA and then treating it as a bid granting program through the states, and then the states select their providers, that's a different dynamic which could have positives or negatives to it, which we're gonna find out about pretty shortly. I think the other, I mean, the breadth of what's going on is probably significantly different.

15:04 A lot of times I think the programs tended to be a little bit more narrow in scope, um, in trying to locate where these hard to connect people were and get them on. This program is going to every state, every state gets, uh, I think it was like a billion or 2 billion right off the top. Not maybe not that much, a hundred million.

15:20 It was like a hundred million right off the top to help them with problems, whether they have problems or not. Um, I- I guess the presumption being that there's enough problems in every state and then every state gets to dip into this to ask the NTIA saying, "Hey, you know, I need money for doing X, Y, or Z," again, that could have positives or negatives to it, but it is different than the way we've worked before.

15:38 Does does every state have these resources? Do states have, I guess we're talking about many FCCS in order to know what grants to put in? I mean, that's a great question. Certainly it's not uncommon for there to be some regulator responsible at the state level too, for some sort of explicit telecommunications function or internet function.

16:00 I don't know that every state has an actual office, but a lot of times there'll be, uh, like utilities commissions for every state. Um, so where you don't have anybody who's explicitly responsible for telecommunications or broadband, any state agency that has jurisdiction over this kind of topic can apply to NTIA   so it would be like a utilities commission. That- that's a really interesting point, 

16:18 I think worth highlighting. A lot of states have these, as you say, public utility or public service commissions. And they tend to be responsible for a bunch of things. They tend to be responsible for sometimes telecommunications, uh, uh, but also things like electricity service and sewer service and a lot of these

16:38 utilities, we call them public utility commissions for a reason. And they sometimes have expertise in areas like telecommunications and internet. Sometimes they might not have, uh, that much authority and they tend to be really good at and have a lot of responsibility for things like rights of way. What permission do you need to get from the state

17:00 if you want to dig under state owned property or under roads or connect to state buildings or state owned infrastructure like utility towers? And that's a very different sort of thing though it's also a similarities to building out a telecommunications network. So it's a bit of a square peg round hole problem in some cases.

17:21 Right. And I think I looked at it a few months. I believe that when the emergency broadband benefit funds were coming out during the pandemic, there were a lot of state agencies that were, uh, involved in helping coordinate access to those funds. So I think maybe over the last two years, there's been some crash course for some of these, these regulators to, to have some facility with

17:42 figuring this out, hopefully enough. If you are a regulator, uh, who would like to know more about this, uh, sort of stuff. Uh, I'll just say there are a lot of resources, uh, out there and I'll offer. I, I know a lot of people who are working to, uh, put together a lot of those resources, so you should feel free to reach out.

17:59 We're always happy to serve as a resource to you when you're looking for resources, um, and happy to connect you. I'll plug- I put together in the spring with, um, with my colleague, Ben, a uh, checklist for- for broadband regulators at the state level to think about these bead funds and how to just conceptualize what you do with this money.

18:17 So we have access, we can, we can send that to if anybody needs it. Mm-hmm  so we're, we're going to turn to the good, the bad and the ugly of bead in a moment. But, uh, I want to just round out this, uh, uh, first bit of discussion Kristian by asking: post bead, I'm gonna be able to move anywhere in the United States and get, uh, a gigabit fiber optic based internet service?

18:38 Well, are we being optimistic, realistic or cynical? Let's do all three. What, what, what do you think's going to happen? All right. So I'll put on the optimistic side. The money does exactly everybody wants it to do. I don't know that even under that case, you'd be able to move literally anywhere and there would be access to broadband already.

18:53 Because as you mentioned before, this doesn't function the way, um, the carrier last resort type of obligations worked. So if you happen to move somewhere that this money hadn't reached yet, you might be out of luck in that case, but let's assume that maybe there'll be money to help you. To connect in the future, but under an optimistic case, every place that currently is either u- what's called unserved.

19:13 It's a technical term that's used in this area or underserved meaning that they either don't have access to the internet or their internet is so slow that it's functionally not that useful. Theoretically, all those places will be connected on the optimistic outcome, a cynical outcome because of the way this is structured.

19:29 With the states being responsible for giving out this money and using the local resources to help them figure that out. So like for instance, like local providers will come through and, and tell these state regulators who don't really think about deployment maybe all the time, "hey, this is how you should do it,"

19:42 And if they get bad advice, what you could end up with is either connecting to already easy to connect places, which means that people who already have decent, but maybe not the best internet are gonna get more of this money so that, um, that people who are truly unserved who truly have really slow or no connections, they end up getting left out.

20:00 And then maybe you make a little bit of progress on the actual problem. The realistic case in, I think rural areas of the country, when I look at their regulators, they are aware of the problems that their citizens face. I think they're gonna be fairly responsible with using this money and they're gonna try to make it go as far as they can.

20:16 There are other places that are gonna get some of this money. Um, Like my state of New Jersey, we have something like 99% connectivity or more. And the 1% that's left are just people who don't want the internet. We're gonna get money too. Uh, I have a feeling that money is not going to be used in a way that actually furthers the goal of bead.

20:33 So I think the realistic case is gonna be mixed. I think in rural areas, there's a good chance it's  gonna do a good job. I think there's a lot of areas where it's just gonna be- have been money spent, maybe didn't really do much. So I, I don't mean to put words in your mouth, but are you suggesting that when the, the government puts a big 40 some billion dollar pot of money out there and says, "hey, this is free money for anyone who applies for it?"

20:55 Uh, and we grant the application that- that creates a bit of a, a gold rush environment where a lot of good actors try and get that money, but also a lot of charlatans might also try and throw their hats in the ring. I think it's fair to put those words in my mouth, that is probably the realistic outcome.

21:10 Yeah. Um, I it's worth noting a little more charitably, perhaps. I thi- this is a, a hard question of expertise, uh, and equitable, uh, considerations here, uh, with the federal communications commissions universal service program. What they've tried to do over the last decade or so is switch to an auction based system in order to be, uh, good stewards of limited resources, figure out, right?

21:36 How can we get the most people connected for the least amount of money? And one of the things that we've seen and that the FCC is struggling with, uh, today is a lot of good companies got that money and have successfully been beginning to use it to deploy service, but also a lot of companies with unproven or overly ambitious technologies stepped in and said, yeah, everyone else is saying, it's going to cost $3,000 to connect a household.

22:02 We can do it for $1,200. And the FCC said, great. "That lets us connect 2 and a half as many times households, um, here's a hundred million dollars." And now we're finding that those technologies don't work. So the FCC is trying to get the money back and reallocate it and re-award it. And the net effect is you have millions of consumers who are going to be without connectivity for another couple of years.

22:26 So with the FCC, you've got a bunch of experts who are trying to figure this out. And you've got opportunistic companies trying to go after this money and with the bead program, it's a different group of experts. Uh, folks who are probably closer to the ground have a better understanding of the challenges and needs of their communities.

22:44 Maybe a better understanding of the technologies that will or won't work, but they don't have as many resources as the FCC necessarily, and there are more of them. So there are more opportunities, Right. For, uh, this sort of gamesmanship. Right. And that, and that's why I think it's probably gonna be a mixed uh, view.

23:00 I'm optimistic it's gonna help a lot of people, I don't know that it's gonna solve all the problems that we, we need to solve, though. I want to follow up on one more thing that you said there, you said there's a difference between unserved and underserved areas. Mm-hmm  which do we, or should we care about getting more service to and how, how does the bead program itself think about unserved versus underserved areas?

23:26 And what's the scale of the problem that we're trying to solve? Great question Gus, what- what everybody's focused on with the bead program is, as I said before, connecting these unserved and underserved household, um, the unserved is defined as people who have 25 megabits per second download speeds or less. So either no con- internet connection or something, that's slow enough where they can't do nearly enough to be part of the modern economy, the estimates-

23:51 so the estimates. How many households there are, comes from the FCC. And I want to preface this by saying it's a notoriously argued over statistic because the data collected is not perfect, but we're close to saying it's something like about 5% of households in the United States would be counted as unserved.

24:10 Um, it could be 8%. Could be 2%, but it's gonna be somewhere in that range. 5% seems to be the most reliable number. So, uh, underserved in the bead program counts as households that receive, uh, a hundred megabits per second or less. So at a hundred mega megabits per second, on all of the different pieces of research that I have seen that's about where you need to be to have a pretty good, reliable household that supports say like a family of four, doing all of the normal streaming,

24:39 gaming, business, email, all the different activities that they do. Obviously you wanna get more than that, but that's, that's your sort of minimum goal that you want to hit. That, according to FCC data, about 93% of households are already connected at about a hundred megabits per second. So what we're really looking at is a slice of, of the us that's somewhere between say 5 and 7% is what we're trying to fix.

25:01 So what is the good, the bad and the ugly of this program? The good would be, um, if this program is run right, I think it's gonna prioritize those hard to reach households, those definitely the unserved 5%. And, uh, hopefully it does a lot of good for the underserved. Say 7%. The bad could be that I think it's gonna be muddied by certain requirements that the NTIA has added in um, in its, uh, what's called the notice of funding opportunity.

25:28 NOFO some people refer to it as I think some of the requirements that they're putting in there for these states to actually get access to this money could make it very difficult to keep everything straight and actually keep targeting the unserved. Um, the ugly? I think that in at least some cases, this could end up creating a regime where, um, de facto price controls over the cost of broadband through various means become sort of intertwined into the requirements of these programs.

25:57 And I think that that would end up being a net harm for broadband plumbing, United States. What about the deployment timeline? When do we expect to start seeing, uh, these funds rolling out and from there, uh, translating the funds into actual service on the ground. There's an obstacle initially in that the FCS to complete broadband mapping,

26:19 um, broadband maps to help figure out where these unserved underserved locations are. They're still in that process. I haven't heard a timeline when they definitely expect that to come out. I think it's supposed to be this fall. I'll- I'll just put in a pitch for, uh, Tech Refactored listeners. We had an episode, uh, a couple months ago with, uh, Sarah O talking about the challenges of broadband mappings and that whole process.

26:40 Um, and as we learned there, it's a big challenge. It's a big problem, actually figuring out what service is available there.  Right. Um, which goes back to what we were, what I was saying earlier about knowing exactly how many people are unconnected is, is can be a, a disputed number, because it's hard to understand this, this problem, but anyway, so we're expecting the FCC to release some of those numbers

27:01 this fall. We expect to see the first trench of money that I believe was like about a hundred million dollars per state that should be released within say the next six months is the expectation that I broadly hear when the rest of the money comes out, then is gonna be dependent on both when these maps are available.

27:17 And when the states have their own pitches to the NTIA, their own proposals for their particular problems and how they're gonna solve that, that's gonna be dependent on state by state level. We had a conversation with Rick Shockey about a year ago, talking about broadband supply chain issues. And at, at the time I think it, there was a, uh, uh, something 

27:38 like a multi month- uh, I think it was pushing up to like a year long, wait to get fiber optics cable, just if you're an ISP, an internet service provider, and you want to install service and you order a big spool of fiber optic cable that will run a couple miles, it's gonna take it a year, Right. To get to, uh, uh, your door so that you can start, uh, installing it.

28:03 Um, h- do you think that that's going to be a factor at all with this program? Yeah, and I, I think that's gonna be a big factor. Uh, so everyone's aware of the, the ongoing supply chain issues for the last couple of years, it affects broadband, um, deployment no less than, than people shopping at home, but then there's other issues as well

28:21 that probably factor into this one in the, um, in the bead program, there was a preference put for, uh, like a by American preference so that a certain amount of components in the deployment has to be sourced. Uh, I forget exactly what the requirements are, but ha a certain amount has to be sourced from America, which-

28:38 we don't produce as much of this material as it's produced abroad. So that makes that complicated. It could slow down deployment. I have a feeling at some point firms are gonna have to be asking for waivers on that requirement somehow, because I, I just don't see how they're gonna be able to do that.

28:51 Then the other side is, uh, there have been hetero actions, not in this program that try to restrict Chinese telecommunications components from being included in broadband networks in the United States related to espionage concerns, which only makes it even more difficult to get the kinds of components that we need to deploy this in the timelines that we're expecting.

29:11 Yeah, that- that, uh, brings us to, uh, one last, uh, issue that we have to touch on nowadays, um, that this program was adopted, um, in 2021 pre-modern inflation. Um, so I was, uh, 40, some billion dollars approved, uh, we now, uh, are seven, eight months into, uh, higher inflation levels, uh, since then. And that will probably continue for some time.

29:34 And if you add in these supply chain issues and by America, um, requirements that limits the number of suppliers and this program you expect is going to dramatically increase the demand for a lot of these products, the inputs that you need to build these networks, right. Do, do you think the 40 some billion dollars

29:51 is going to be enough over the next couple of years or, uh, is it too much too little? Well, it's hard to assess because it it's, it's impossible to know, um, where we're gonna be targeting with this money until we actually start to see the state plans that said. It should theoretically be possible in 20- in $20 to take 40 billion and connect

30:13 most of that 5% that are hard to, to connect. That money is worth less now, two years later. So that means you're buying less and government spending., And especially as it is filtered through multiple levels of different kinds of governments, that's always gonna add some sort of inefficiency into how that money spends.

30:28 Just the nature of that sort of process. I have a feeling that in the end. We'll see that the deployment does happen. I think we're gonna start seeing a bunch of people complaining that it didn't happen the way everybody expected it to. And why aren't we doing better? But you know, there's a lot of headwinds, uh, any last thoughts or things that you'd like us to touch on?

30:47 Uh, yeah. So I guess, so for final thoughts, I guess what I would. Think about is the state regulators are gonna be the biggest players here. NTIA has put requirements in that I think are potentially damaging, so there, I- I won't go into all the details of those cuz they can be complicated, but they create preferences.

31:04 For instance, for particular kinds of technology, for particular kinds of deployment patterns, they don't require them. But they have preferences as a state official. What I would do is look at what is expected for my application. Look at where my knee really is, and actually try to make the case of the NTIA that this is who my truly unserved population is.

31:27 This sort of technology, whether it's, uh, some form of wireless, or it might be, um, fiber. It- it could be a lot of different things. It could be, this is how I need to connect my people. And this is what the money should go for. Try to avoid the lore of, um, contemporary politics that put in some of the requirements in the NOFO funding process, um, in order to make sure that money really does get used the way it needs to get used.

31:49 Yep. Um, it can be really expensive to try and cater to a lot of the, sometimes legitimately important, uh, special interests, but- absolutely, but treat this as a nuts and bolts approach to getting people on the internet, keep your eye on the bead. The goal is to get people connected. Um, and once we've achieved that goal, we can focus on doing bigger, better things.

32:10 Exactly.

32:15 Well, uh, Kristian, uh, thank you for taking the time to, uh, talk. Today, uh, our guest has been, uh, Kristian Stout, the director of innovation policy at the International Center for Law and Economics, and I've been your host Gus Herwitz. Thank you for joining us for this episode of Tech Refactored. If you want to learn more about what we're doing here at the Governance and Technology center, or like to submit an idea for a future episode, you can go to our website at NGTC.unl.edu or you can follow us on Twitter at UNL underscore NGTC.

32:43 If you enjoyed this show, please don't forget to leave us a rating or a positive review wherever you listen to your podcasts. If you wanna leave us a negative review, well, maybe you don't have internet access that's working today. Our show is produced by Elsbeth Magilton and James Fleege. Paul McCarthy created and recorded our theme music.

33:00 This podcast is part of the Menard Governance and Technology programming series. Until next time, get connected.