'What Do We Gain From Investing In This?': JD Vance Questions Witness About Broadband Affordability

7 months ago

At a Senate Commerce Committee hearing last week, Sen. JD Vance (R-OH) spoke about broadband affordability.

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Transcript

00:00 Senator Vance, you're recognized for five minutes for your questions.

00:03 Great, thank you Mr. Acting Chair, appreciate you and appreciate all of you for being here.

00:08 I wanted to sort of focus my questions on, you know, the sort of economic impacts from

00:14 the consumer's perspective but also from the government and also the sort of the businesses

00:19 that are investing in broadband infrastructure. And Mr. Levin, I'd like to direct my questions

00:24 to you. So, you know, in your written testimony you described the positive impact on employment

00:30 rates from discount internet plans and you sort of explained how greater labor force

00:34 participation and so forth comes from, you know, having access to high quality broadband. I know

00:40 that's an issue especially in our rural communities but of course it's an issue in a lot of different

00:44 communities as well. I'd like to sort of understand how do you think about the cost savings? One of

00:49 the biggest challenges that we have when it comes to refunding the ACP program and reauthorizing it

00:54 which I support is, you know, of course the pushback that we are in sort of tight budgetary

00:58 times. We have to think about how to save money in this town which is something we do far too

01:02 little of. Could you help me think about the economic upsides of the ACP program as you

01:06 understand it? What do we gain from investing in this program?

01:10 There are multiple different ways of thinking about it. I cited in my oral testimony a study

01:20 by a Google economist who talked about consumer surpluses in 2013 being $500 per user. That number

01:28 undoubtedly has gone up and if you look at the study there's just all kinds of different ways

01:32 in which savings of time, I think all of us have experienced the internet is able to do certain

01:37 things to speed up, able to shop, able to determine the most of the cheapest option for a product that

01:48 we want. There are those kinds of savings that accrue directly to an individual. But what we

01:55 also see is particularly in terms of the government which is in a way sharing in those costs.

02:00 In the case of telehealth there's very direct savings because if you save one emergency room

02:08 visit by having the person come on broadband and talk to someone and if they turn out not to go to

02:13 the emergency room because they don't really need to, I believe that's like a $3,000 savings

02:18 in terms of time. I mentioned earlier in terms of job training and placement there's direct

02:24 benefit to the government not just to the person but to the government. I think if we look at

02:29 education and my god what AI is going to do to education I'm very excited about it I think it's

02:35 going to be great but if the very people we most want to be able to use those tools to learn how

02:40 to read and reading scores in fourth grade are a great predictor of economic success later on in

02:45 life that's another version of those kind of savings. So Mr. Levin if you were done any sort of

02:50 analysis of the of the net benefits so if you take for example a dollar spent on the ACP

02:56 you know what is what is the the benefit in terms of government savings from things like

03:01 you know medicare diverting people into telehealth which saves a lot of money but also consumer

03:07 upside have you ever sort of tried to understand the net effect of you know the given amount that

03:12 we spend on the ACP? Yeah others are much better than that better better than me at that my my

03:17 friend in the probably the leading expert on that kind of data is a guy named John Horrigan

03:21 who estimated that for every dollar spent there's two dollars of gain to the individual. There was

03:27 a study that said for every dollar spent on ACP we get a $3.89 increase in GDP. I have not done

03:37 a comprehensive nor do I believe there is a comprehensive study on health care. I sure wish

03:41 there was. I think it's something which the government should do but it's really about a

03:47 kind of a larger trend in which we take advantage of this incredible opportunity to rethink how we

03:54 deliver services. Yeah and there's almost no doubt that way particularly when we come to health care

03:58 you'd see a benefit. Great yeah I of course be very interested in that too. So one just final

04:06 question is you know when I talk to you know obviously we talked about the consumer side of

04:10 this and the government side of this. When I've talked to a number of businesses who invest in

04:15 rural broadband and obviously it's you know very expensive to lay a mile of fiber in southeastern

04:21 Ohio compared to central Ohio where it's a lot more densely populated the terrain's a little bit

04:26 you know less tough and so forth. You know one of the things that sort of justifies the very large

04:31 capital expenditure of that infrastructure is knowing that they're going to be customers on

04:36 the other end. That's something the ACP program ensures. Could you speak to sort of that economic

04:41 benefit a little bit? Yeah BCG did a study which suggests that the B dollars go 25 percent further

04:47 if you have ACP for precisely the reason you just said. That if you have a guaranteed population

04:55 that you know is going to pay and they're going to pay on a regular basis and one of the mistakes

04:59 people make as they say only 22 percent didn't have broadband. Actually there were a lot of people

05:06 who were on broadband and off broadband that's the largest group. Sure. But if you know you're

05:10 going to have that population you need less of a government subsidy to build out that network.

05:16 Yeah and I'm mindful of my time here so I'll yield but just one observation you know

05:20 anecdotally which is not always data but I do think it's useful is I talked to a number of folks

05:24 who have invested a lot in rural broadband infrastructure in the state of Ohio who've

05:29 told me straightforwardly they would not have made that investment if not for the existence of the

05:33 ACP program. So I think something important for us to keep in mind as we think about how to build out

05:37 the 21st century digital infrastructure for our country. So thanks Mr. Chair. I appreciate it.

'What Do We Gain From Investing In This?': JD Vance Questions Witness About Broadband Affordability

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