The administration’s plan to direct $200 billion in federal dollars to infrastructure projects includes broadband as a priority, but earmarks no money specifically toward expanding wireless or fixed broadband access. Transportation Secretary Elaine Chao, spent time discussing the administration’s reasoning during a sometimes contentious hearing before the Senate Environment and Public Works Committee on Thursday.
In a factsheet released by the White House last Friday, the administration states that $50 billion is dedicated to rural infrastructure and accounts for 25 percent of federal spending in the plan. “These funds will be awarded directly to the states, giving them the flexibility they need to address their individual rural infrastructure needs,” says the White House. States can spend as much as 100 percent of the funding they receive on improving rural broadband access.
Chao clarified that state governors will decide how to allocate the funds. She testified that the president’s Infrastructure Initiative “includes, but is not limited to, drinking and wastewater, energy, broadband and veterans’ hospitals as well. It is designed to change how infrastructure is designed, built, financed and maintained.” The goal is to stimulate at least $1.5 trillion in infrastructure investment from the private sector. Now, the proposal includes a minimum of $200 billion in federal funding.
Private investors, like pension funds for example, are barred by law, and by a lack of projects, from investing in public infrastructure, she said. “The private sector is very eager to finance these projects. They would be deterred by years of delays, which would increase their risk,” Chao said.
Streamlining permitting to speed project delivery is a big goal, as well as reducing unnecessary regulations, said Chao.
Committee Chairman John Barrasso (R-WY), agrees with the goal to reduce red tape, noting that: “It shouldn’t take a decade to permit a project that only takes a few months to build. We need to build projects faster, smarter, better and cheaper.” Rural communities “need to have an equal seat at the table. What works for Baltimore,” for example, “may not work for Cody or Casper, Wyoming. Any plan should have significant and sustained levels for rural areas,” he said.
Chao called the administration’s plan “a common-sense approach.” Half of the new infrastructure funds would go towards incentivizing new state and local investments in infrastructure. A quarter of the federal funds will prioritize rural infrastructure needs, Chao told lawmakers.
Democrats on the committee, led by Ranking Member Thomas Carper of Delaware, questioned the math behind the plan, doubting that the feds can take the $200 billion actually allocated, and turn it into $3 trillion in investments. Carper said the Heritage Foundation and the Wharton School of Economics question that, too.
“It takes someone with business experience to know how this works,” Chao replied. She stressed that streamlining the permitting process needs to be done on a multi-agency basis.
Sen. Ed Markey (D-MA) said the administration has flipped the infrastructure formula, from the former 80 percent paid by the federal government and the remaining 20 percent by states, to the reverse. “I’m concerned this won’t fly in terms of enabling the infrastructure we desperately need.”
Sen. Joni Ernst (R-IA), while glad to see “the administration recognizes the importance of rural broadband,” asked why the White House did not decide to directly fund established rural broadband programs from the FCC and USDA. “Not all states have the expertise,” in this regard, Ernst said.
Chao said she’d look into it, and added that while governors get to decide how to allocate the money, “broadband is one area we urge them to pay attention to.”
“We want to make sure expertise is involved in building out broadband networks,” and urge [lawmakers] to make sure those dollars are spent efficiently,” said Ernst, pledging to work with Chao and the FCC on the issue.
By Leslie Stimson, Washington Bureau Chief, Inside Towers
March 2, 2018
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