Biden's Broadband Push Is Good, But Crappy Maps And Lobbying Can Still Screw Things Up

from the do-not-pass-go,-do-not-collect-$200 dept

So to be very clear: the Biden infrastructure bill has a lot of good things for broadband in it. More specifically, billions in grant money that can be used by states to shore up both "middle mile" and "last mile" broadband access across huge swaths of the country. It's the biggest lump sum ever doled out by the government for broadband, and it will have a huge positive impact on the nation's broadband gaps. Especially in perpetually marginalized areas. That can't be understated.

That said, this isn't the first time we've tried to throw a big chunk of cash at the U.S. broadband problem, and there are numerous ways this could still go south.

The plan relies on many states to build entirely new systems to distribute and spend that money. Given rampant state corruption in broadband policymaking, there's an unlimited number of ways that entrenched regional monopolies (Comcast, Charter, AT&T, Verizon, CenturyLink (Lumen), Frontier) could inject themselves into the process to ensure more money goes to them for dubious deployment promises, and less goes to smaller competitors or faster, better services.

ISP lobbyists already stripped a lot of language they didn't like out of the original proposal, including clear support for community broadband and tougher speed standards. Now their lobbying folks are busy lobbying the NTIA, which has been tasked with crafting additional standards and funding guidelines in six short months:

"Meanwhile, internet service providers (ISPs) are expected to aggressively lobby the National Telecommunications and Information Administration (NTIA) as it crafts new internet rules under the infrastructure bill’s $65 billion broadband expansion plan. The relatively tiny agency has six months to develop a proposal that will require recipients of federal broadband funding to provide a low-cost broadband option and encourage states to explore alternatives to dominant ISPs such as coops, nonprofits and municipalities."

U.S. broadband has a 30 year history of ISPs taking billions of dollars for networks they then half deploy, usually with little or no penalty. Whether that happens again here depends entirely on how tough the NTIA and FCC are going to be with regional monopolies, historically neither agencies' strong suit. And again, more than half the states in the country are literally little more than rubber stamps for the interests of giants like AT&T, so diligence will be required to ensure the money is going toward productive, pro-competitive solutions.

The other major obstacle is the country's broadband maps, which still don't accurately track broadband speed, pricing, and availability despite decades of complaints on this subject. While Congress, the FCC, and NTIA have all taken some helpful steps toward better mapping, actual implementation of those reforms are still several million dollars and several years away. That's too late for states, many of which are currently working on spending $10 billion to shore up access, with $42 billion from the infrastructure bill still on the way. In other words, we're trying to fix a problem we still haven't accurately measured the scope of:

"For now, though, many states don’t know where to put that first round of cash. They have only a murky picture of where their internet dead spots are, thanks to the federal government’s reliance on broadband mapping methods that dramatically overstate existing coverage."

Here too, telecom lobbyists, eager to obfuscate the obvious end result of monopolization, limited competition, and regulatory capture, have routinely blocked reform (and will continue to do so). So there's a lot of money being thrown at a system that historically doesn't measure the problem it's tasked with fixing very well, often can't even acknowledge why the problem exists in the first place (again: regional monopolization, corruption, regulatory capture), and doesn't like to challenge wealthy and politically powerful telecom corporations tethered to our intelligence and law enforcement apparatus.

That's not to say a change from the US telecom status quo is impossible; there's a lot of good folks working very hard to do this the right way. But it is to say that doing any of this correctly is going to require some uncharacteristic aggression, competence, and integrity we haven't seen in the last forty years of telecom policy.

Filed Under: broadband, competition, fcc, infrastructure, infrastructure bill, joe biden, lobbying

Biden's Infrastructure Bill Shouldn't Undermine Cryptocurrency Infrastructure In The Process

from the that-would-be-a-mistake dept

There was a reasonable uproar from the cryptocurrency community this weekend as it appeared that the long fought for Biden infrastructure bill would change some definitions to create a mess for the wider cryptocurrency space.

Language in the bill would require crypto brokers to report customer information to the Internal Revenue Service. More importantly, over the weekend it broadened the definition of what’s considered a “broker” to anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person” which doesn’t exclude miners, software developers, stakers and other individuals in the crypto economy who don’t have customers.

“The language gives a lot of power to define what should be included in the reporting requirement,” Oppenheimer analyst Owen Lau. “It says any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person – which can mean anything. If I transfer bitcoin for you, then it can mean I become a broker.”

The potential for mischief was certainly quite high:

The proposed legislation, if passed, would have a significant impact on both investors and exchanges. Exchanges will need to undertake significant efforts to comply with the reporting regime. Investors, on the other hand, won’t have to “do” anything. But under the new law, all of the information that the IRS would normally receive when an investor sells a share of Amazon stock will now be sent to the IRS when an investor sells one Bitcoin, one Ethereum, or the like. There’s a lot to be sorted out: what will happen with crypto stored in cold storage, wallets not on exchanges, so-called “self custody.” The proposed legislation does not address this “self-custody” cryptocurrency, because it is analogous to cash under a mattress. It is difficult to trace and even more difficult to devise an information reporting scheme that would encompass such an asset. Individual cryptocurrency owners and investors must still pay attention, however, because it is even more likely that the IRS will be made aware of their transactions and expect them to be reported on a tax return.

Lots of folks began to notice some problems with this, including Senator Wyden, who noted it was yet another example of politicians not understanding technology:

Others in the Senate spoke up about problems with the language as well, and it appears that some last minute changes are being made in response:

The final legislative text included some changes to alleviate concerns of the cryptocurrency industry, which expressed alarm last week about new requirements that would define most of the participants in the sector as brokers and force them to turn over information to the I.R.S. The provision was projected to raise $28 billion over a decade.

After receiving pushback from cryptocurrency lobbyists, lawmakers revised that section of the bill to “clarify” the definition of a broker rather than expand upon it.

The legislation also removed language that explicitly targeted “any decentralized exchange or peer-to-peer marketplace.” It replaced that with a broader definition that characterizes brokers as anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

There's an important balance here. Obviously, some aspects of cryptocurrency are used to hide money transfers, or to otherwise engage in scammy or illegal behavior. So you can understand the interest in better, more accurate reporting. But, treating cryptocurrency the same as other currencies also will have profound downstream effects, at a time when cryptocurrency still represents a key hope for bringing back the kind of internet we were once promised -- one that is more decentralized, and where more of the power is pushed out to the ends of the network, rather than controlled by a few large central players.

While I get that some people are hugely skeptical of the entirety of the cryptocurrency space, there's a real risk of destroying the vast potential to build a better internet if we focus just on the scams and the illegal uses. Thoughtful regulations around cryptocurrency have to recognize what it actually entails -- and the initial version of the infrastructure bill seemed to do the opposite. And that would be unfortunate, seeing as how getting cryptocurrency right can help reinvigorate the very important internet infrastructure.

Filed Under: cryptocurrency, infrastructure bill, joe biden