To ensure rural areas don’t miss out on long-awaited federal aid, the Alaska Senate on Monday increased state spending for rural school districts that buy legacy broadband service from companies like GCI. A bill to do so was quickly passed. Next stop is the Governor’s Desk.
The legislation increases reimbursement for purchasing 100 Mbps per second speeds from fiber-optic internet service providers, allowing school districts to qualify for high-speed internet through state-federal programs. The current program only covers 25 Mbps. The state’s share in the federal E-Rate program is approximately $40 million.
The FCC’s E-Rate program will make telecommunications and information services “more affordable for schools and libraries.” According to the FCC, with funding from the Universal Service Fund, E-Rate will make telecommunications and information services “more affordable for schools and libraries.” , offers discounts on internal connections to eligible schools and libraries. ”
House Bill 193 The original language of the failed Senate Bill 140 was scraped and repurposed into a standalone House bill. SB 140 was a vehicle for the National Education Association to budget large amounts of education spending, and the education industry tried to force spending by saying rural internet was in jeopardy. SB 140 ultimately fell into chaos and was vetoed by the governor due to the recklessness of the spending it contained.
The core legislation, SB 140, currently filed in the House of Representatives, is important to Sen. Lyman Hoffman (Bethel), a salaried director of the Bethel Native Corporation. Bethel Native Corporation has previously contracted with GCI for fiber optic work. Region; BNC is also the first company to be named to win a new contract, leaving Mr. Hoffman with an ethical compromise by voting for his family’s personal interests. He did not recuse himself from voting on the bill.
Hoffman is the sponsor of SB 140, which has been the focus of legislative drama for much of the month. He also passed House Bill 193 in the Senate.
During Monday’s vote, the only senator to vote against final passage was Sen. Mike Shower, D-Wasilla, who questioned why the state is investing so much in fiber technology, yet program technology He questioned whether the government had not confirmed that it was neutral.
“In the words of a former president, ‘let me be clear,’ I support this situation. There is no doubt that we need rural internet speeds to give rural Alaskans a chance. No. I’m 100 percent defeated,” Shower said.
He noted that the expansion of the subsidy program to 100 Mbps “supports one technology chosen before other options exist, such as faster and cheaper.” From a military perspective, you always need a backup for a backup. I’m not opposed to considering layered options with fiber optic cable and satellite internet redundancy.
“There may be geostationary satellites as well as LEO,” said Sen. Shower. “There’s more than one thing here that works.”
Shower’s amendment to ensure technological neutrality failed, with only him and Sen. Shelley Hughes voting in favor.
Why don’t legislators want to add a technology neutrality amendment? That’s a multimillion-dollar question.
In fact, many rural residents are now using Starlink satellite broadband to get the speeds they want, and at much lower rates than fiber optic providers charge.
But Hoffman ignored those alternatives, emphasizing how much federal funding would come from passing the bill. He said it was for the children. He also pointed out that the $40 million includes the match, and that “if all schools participate, that would be a little more than $350 million in benefits for those communities.”
So the state and federal governments end up paying for broadband costs that can reach up to $60,000 a month for some village schools.
The $350 million from HB 193 ($40 million from the state) already comes from other federal universal service funding programs: e-toll rates for schools, high-cost housing subsidies, and rural health subsidies. That would add to about $300 million. ), which creates an artificial price floor that ultimately hurts Alaskans’ pockets.
This often happens when the government gets involved to make things better, rather than letting the private sector compete.
It’s an economic allegory for the Cobra Effect: the unintended consequences of government. In India, when the government wanted to get rid of poisonous cobras, it paid them a bounty. This gave people an incentive to breed cobras and sell them for money. Some of the cobras escaped, which led to an increase in cobras. The Cobra Effect is an incentive that produces unintended and undesirable consequences, contrary to the designer’s intentions.
In the case of broadband subsidies, the Cobra effect gives companies an incentive to charge higher prices by funneling money into the system.
The battle of technology is evidenced by companies such as ASTAC, which serves Atqasuk, Nuiqsut, Point Hope, Utqiaġvik, Wainwright, Anaktuvuk Pass, Kaktovik, and Point Lay. ASTAC is advertising a promotion to buy back Starlink equipment if people switch to fiber optic service, which will cost significantly more than satellite in the long run. Check out the promotion at this link.
“In partnership with Quintillion, ASTAC is now offering to buy back your Starlink equipment when you switch to a great new plan. Bring in your old Starlink equipment and we’ll instantly apply a credit to your account. Sign up now and get $500 instantly added to your account to help you get rid of equipment you no longer need,” ASTAC says in the promotion.
According to Sen. Shelley Hughes, 23 schools are already using space internet. The cost difference is orders of magnitude.
Last year, a school in the Lower Yukon School District paid $44,000 a month for fiber broadband. This year, Microcom, which connects to the Starlink satellite service, submitted a bid. GCI lowered its bid from $44,000 to $25,000 in a bid to beat Microcom. However, Microcom bid him $2,500. This is 1/10th, 17th of the cost of the previous year’s school with GCI.
“We pay taxes now, but when we talk about federal funding, it’s good to remember that it also comes out of our pockets. If you’re paying $200 million, that’s $20,000 per child per year,” said Senator Hughes. He pointed to an FCC report released last week that showed rural schools in Alaska were paying an average of $203 per megabit per second for internet, compared to 29 cents per megabit per second in Utah. He pointed out that this indicates something.
