“Remove hidden fees”: a new development plan for American broadband networks is being prepared

At the end of March, it became known about new development initiatives from the US telecom market. They plan to provide high-speed Internet access to as many citizens as possible and relieve them of the complex system of tariffication for Internet communication services. It is clear that not all providers liked such offers.

Photo: Oscar Schnell.  Source: Unsplash.com
Photo: Oscar Schnell. Source: Unsplash.com

What’s happening

how informs Ars Technica, the new President of the United States, is going to not only “refresh” the existing network infrastructure, but also give priority to communication lines designed with an eye to the growth of audience needs, subsequent development and modernization. It is proposed to focus on regions and regions with a low level of coverage, which has resulted in rash bureaucratic procedures and statistical calculations at the level of specialized departments. Biden’s plan is to bring high-speed communications to every corner of the country, without exception, within a few years and make it accessible to citizens.

According to the president, for this it is necessary to invest about one hundred billion dollars in the telecom sector. The amount is decent, but against the background of two trillion that are going to be invested in the modernization of the rest of the country’s infrastructure, it looks adequate. To develop communication lines are collected together with other technological and social projects, therefore the proposals were included in the overall program “The American Jobs Plan”. However, it has yet to be detailed and presented to the US Congress.

Struggle for networks

A number of major players in the telecom industry and their Republican representatives had other plans for regulating the market and managing the network infrastructure, so they met Biden’s initiative not without fear and retaliatory measures. The President proposed to strengthen the competitive position of municipal providers – to align the “rules of the game” for them and private companies providing Internet services – for example, demand a transparent pricing policy from both the former and the latter. However, in the past, Republicans have tried to curb the growth of municipal networks and even had time to introduce certain restrictions for them at the level of twenty states. Presumably to promote the business interests of telecom companies. In light of Biden’s new proposals, Republican congressmen have come up with counter-bills to “raise the stakes.”

Photo: Nadine Shaabana.  Source: Unsplash.com
Photo: Nadine Shaabana. Source: Unsplash.com

One measure advocated by the Republicans is to spread the containment of municipal providers at the national level – for example, by imposing restrictions on the construction of communication lines outside the areas they serve. Democrats, in turn, are confident that “such an absurd bill” has no prospects, and are preparing for constructive criticism of this initiative. Fortunately, they have experience – confrontation between parties on such issues goes on more than five years.

Regulation of advertising

According to Biden’s plan, the government is not going to spend funds on direct subsidies to citizens or telecom companies in areas with relatively expensive Internet connections. Instead, it intends to regulate the operating principles of the entire telecom segment. The lifting of restrictions on the development of communication lines should be one of the ways to increase the level of competition and bring down the cost of services, but not the only one in the hands of the authorities.

It is very likely that the new bills implemented on the basis of “The American Jobs Plan”, which includes the modernization of the network infrastructure, will also affect the general approach to the formation of tariffs on the side of providers. Plus – will affect how they promote their services. The challenge here is to minimize the discrepancy between the “promises” and the deed, when advertising of an affordable connection turns out to be expenses for customers in excess of the expected costs: for renting additional devices, switching between tariffs and other actions, the financial consequences of which are difficult to assess for an unprepared consumer.

What’s next

While the proposals are at the stage of discussion and detailing, it is difficult to assess the consequences of their implementation. However, the desire to eliminate the so-called “digital divide” between the middle class and low-income citizens from the suburbs and remote corners of the country is obvious. The latter, one way or another, will try to provide new opportunities for work and education, and in the current situation, high-speed communication can be a key factor. The American Jobs Plan likens this plan to the electrification of the country in 1936.

How these proposals will fit in with the “tightening the screws” trend for overseas telecoms and IT vendors formed by the previous administration remains to be seen. As well as to understand the demand for open technologies from the state. All these nuances will largely determine the policy of other Western countries in relation to their own providers and work with international telecom companies. We will talk about it and the experience of colleagues of American regulators in the following materials.

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