Massive federal spending on internet construction will be delayed at least another year, Federal Communication Commissioner Brendan Carr recently announced.

“In 2021, the Biden Administration got $42.45 billion from Congress to deploy high-speed Internet to millions of Americans,” Carr tweeted in June. “Years later, it has not connected even 1 person with those funds.”

Michigan is seeking $1.5 billion of those federal funds for internet access. If Michigan’s application is successful, its share of funding will be sent to the state through the federal Broadband Equity, Access and Deployment (BEAD) program and will be administered by the Michigan High-Speed Internet Office (MIHI).

Michigan’s BEAD application includes provisions that stray far from the stated mission of providing internet access to those who don’t have it. The Michigan High-Speed Internet Office’s priorities skew heavily toward new internet construction initiatives, much of it directed to areas that already have excellent internet access.

Rather than building duplicative infrastructure, MIHI could get more people online by equipping community organizations with resources to help those who already have access get connected, and by expanding broadband subsidies to low-income families.

The High-Speed Internet Office is also manipulating the definition of Community Anchor Institutions eligible to receive broadband funds for construction projects. The effect of this manipulation will be to shift funds away from rural and remote areas where access tends to be scarce and toward politically connected organizations in populated areas that already have strong access. As the watchdog group Citizens Against Government Waste explains:

Volume I of Michigan’s proposal also deserves a special dishonorable mention for the overbroad definition of Community Anchor Institutions (CAIs), which qualify for support to achieve one Gbps symmetrical speeds. The NOFO guidance describes the types of institutions that should qualify as CAIs, including schools, hospitals, government buildings, senior centers, job training centers, etc. The proposal submitted by the Michigan High-Speed Internet Office (MIHI), however, expands eligibility well beyond the letter or intent of BEAD guidance by permitting 118 entities categorized as stadiums, zoos, aquariums, wildlife centers, and convention centers, including many privately owned, for-profit businesses, to qualify as CAIs.

The MIHI proposal is not technologically neutral. It uses the funding process to pick winners and losers among competing internet delivery technologies. Specifically, the High-Speed Internet Office intends to favor expensive wireline fiber over emerging wireless technologies that have the potential to make cable wire and other wireline technologies obsolete in the near future.

Finally, the Michigan High-Speed Internet Office is trying to use the funding program to create a price regulation structure that is unique among the states applying for federal broadband funding. Neither the federal government nor the state of Michigan currently regulates internet rates. MIHI proposes leveraging its control over the federal funding to create its own rate regulation system for internet service in the state.

Thus, Michigan was already adding a set of seemingly unrelated agenda items to its BEAD proposal, something that is also happening in other states. It is not surprising that the BEAD approval process is bogged down as state agencies and the federal government come up with new ways to advance their favored agendas through their control of the funding process.

Carr has an idea for speeding up the process. He proposes that the Broadband Equity, Access and Deployment program stop everything it is doing and simply “cut everybody a coupon for $600 – which is effectively the price of a Starlink dish – and mail that coupon to everybody and call it a day.”

Carr’s approach would be more cost effective and deliver faster results than the Michigan High-Speed Internet Office’s proposal. The MIHI proposal envisions spending $4,232 per unserved household at the unspecified future date when it starts distributing the funds. Even this figure greatly understates the cost per household that will gain internet access. That is because the plan would direct much of the infrastructure spending to areas where internet access is already excellent, but residents choose for whatever reason not to sign up.

Giving more people internet access funded by taxpayers does not have to be so expensive. Rather than letting the market work, government employees are substituting what they want for what the market wants. As long as administrators continue letting their favored agendas control the process, the delays in the $42 billion BEAD program will go on, with nothing to show for all that promised spending.

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