Texas lawmakers look to use $5 billion in tax dollars to create redundant broadband fund

Even though Texas will likely receive the most taxpayer dollars through the federal Broadband Equity, Access and Deployment Program (BEAD), lawmakers in Austin are looking to create a $5 billion fund for broadband.

House Bill 9 would create the Texas Broadband Infrastructure Fund, giving state voters the opportunity to decide whether to create the program through a constitutional amendment. The fund, designed to bolster the efforts of the Texas Broadband Development office to expand internet availability in the state, would be administered by the Texas Comptroller’s Office. The Texas Tribune pointed out it would be the biggest state investment in broadband so far. Texas has already allocated $600 million in state and federal funds to develop better state broadband maps and provide grants to help assist areas found to be unserved or underserved.

The legislation comes on the heels of a report from Telecompetitor that Texas will be the state likely receive the most funding from the BEAD program, approximately $3.5 billion according to estimates from carrier organization ACA Connects and research firm Cartesian. 

The National Telecommunications and Information Administration (NTIA) will likely announce official allocations on June 30 for the $42.5 billion budget. The program’s rules dictate that funding be allocated based on each state’s percentage of unserved locations, with the goal of near-100 percent connectivity. NTIA will base those allocations on data the Federal Communications Commission (FCC) is now gathering from service providers through the end of March to show where service is available. 

The FCC and NTIA have received their share of criticism about the process – the former about the accuracy of its national broadband map, and the latter about the transparency of the challenge process, as well as the speed at which it desires to move forward. Even though many stakeholders have requested that NTIA delay the June 30 date for announcing the BEAD allocations to give them more time to make challenges to the map, that agency has declined to do so. 

Given the $3.5 billion that Texas will probably receive to close the digital divide, creating a new $5 billion broadband fund footed by state taxpayers seems excessive. And, a program that large will inevitably lead to overbuilding and the waste of taxpayer dollars. It will also lead to the construction of more government-owned networks (GONs).

Already, some local governments, such as Cooke County, are eyeing the Texas broadband fund for money to build their own networks. The Taxpayers Protection Alliance has pointed out in its extensive research on the topic, including its 2020 report “GON with the Wind: The Failed Promise of Government-Owned Networks,” that GONs lose money for taxpayers the vast majority of the time.

The last thing that Texas taxpayers need is another government fund to siphon their tax dollars away as the federal government is already supplying billions to accomplish the same goal.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance.