Ted Cruz: 'The Biden Administration Has Engaged In Anti-Competitive Technology Bias'

last year

At a Senate Commerce Committee hearing on Thursday, Sen. Ted Cruz (R-TX) spoke about broadband affordability.

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00:00Next, we're going to hear from the ranking member of the full committee, Senator Cruz.

00:04Thank you, Mr. Chairman. Dr. Winfrey, you note in your testimony that one proven way

00:09to promote broadband affordability is through competition. According to a recent study by Econ

00:15One, competition from 5G fixed wireless service and home broadband markets was shown to produce

00:22billions per year in consumer savings. These are precisely the competitive benefits that the

00:28Spectrum Pipeline Act, which I introduced in partnership with Senators Thune and Blackburn,

00:34would provide. Unfortunately, instead of expanding access to mid-band spectrum

00:41and promoting competition from wireless services, the Biden administration has engaged in

00:46anti-competitive technology bias while stalling out on spectrum. Dr. Winfrey, in your judgment,

00:54how would my spectrum pipeline legislation compare to the ACP in promoting long-term

01:00broadband affordability? Spectrum auctions would increase competition and bring more folks into

01:06the market. We would have more ISPs doing more cool things with them, which would ultimately

01:10reduce prices. And lower prices, in turn, benefits consumers. That's right. Benefits everybody.

01:18And higher prices, which the ACP has produced, that's hurting consumers. Is that right?

01:23That's right. I mean, one of the issues with ACP is that it's a one-size-fits-all

01:27policy. It's a $30 monthly subsidy regardless of where that person sits. And one of the things

01:34that we've seen is that ACP has predominantly covered folks living in urban areas relative

01:40to rural areas. So ACP is not a solution for rural areas, assuming that rural broadband

01:48connectivity is an issue, which I think that it is. And I think that there's a lot that we can

01:52ultimately do there, which begs the question, well, why don't we use this as an opportunity

01:57to reform ACP? Well, and millions of people across Texas and across the country are hurting

02:04from inflation, inflation that has been galloping in the last three and a half years, particularly

02:09when Democrats had unified control of Congress and the White House, where they spent trillions

02:13of dollars we didn't have. They printed money we didn't have. They borrowed money from China we

02:18didn't have. They're producing inflation that is hurting working families across the country.

02:23And we now have Democrats coming back saying we want to spend billions more, even though it will

02:29fuel inflation and it will drive up the cost for consumers across the board. Is that right?

02:34That's right. So there are two ways that ACP affects prices. The first way that it affects

02:38prices is by setting essentially a price floor for plans. What my research shows is that that

02:45predominantly hits, again, urban areas. So what we saw before ACP is a bunch of plans that were,

02:51say, $20 up, $20 down, $10 a month. Those went away during ACP, right? So the speed levels went up

02:59moderately, but the price level went from $10 to $30, because that's where the AC benchmark is.

03:06So all those cheap plans went away. And then the second way that ACP affects inflation

03:12is through government spending. I mean, right now we've seen, you know, we live in an economic

03:18environment where the Fed is having a really difficult time getting inflation under control.

03:23Interest rates on short-term debt are 5.5%. And so every dollar that is spent by the federal

03:29government is ultimately inflationary right now. So are consumers better off at being able to get

03:36broadband at $10 or $30? $10. It's pretty remarkable. All right, let's shift to another

03:43topic. Dr. Winfrey, in your testimony, you raised that there are other low-income broadband

03:48subsidies in addition to ACP. In fact, as we've heard, there are multiple taxpayer subsidies

03:56for Internet connectivity. GAO recently identified over 130 of them. The longest standing of these

04:05are the universal service funds programs at the FCC. I don't think we would be having this

04:11conversation about broadband affordability if the FCC were properly managing the universal

04:16service fund programs. Dr. Winfrey, aren't some of these FCC programs demand-side subsidies? And

04:25what do these programs spend on a yearly basis? Sure, they're both demand-side subsidies, and

04:30they're also supply-side subsidies. So there are four main programs. There's Lifeline, the high-cost

04:36program, schools and libraries, or E-rate, and then rural health care. And together, those four

04:41programs spend about $9 billion a year. And yet, according to at least some members of this

04:48committee, the FCC needs yet another program. Why not fix the current programs and take the lessons

04:55the ACP has learned and apply them to making sure the funding we actually have works? This

05:01is what I proposed in my blueprint for universal service fund reform. In your view, Dr. Winfrey,

05:10what changes should Congress consider making to ACP and the universal service fund

05:15before adding additional funding to any of these programs? Sure, I think there are a number of

05:19reforms that can be added. I mean, we can learn from the experience of the Affordable Care Act,

05:24Obamacare. Premium tax credits went to low-income individuals, and we learned that folks who were

05:32receiving those tax credits shouldn't have actually been receiving those tax credits.

05:35And so one of the things that Congress can do is it can learn from that experience to actually

05:42recapture ACP funds that should be used for low-income populations. It's probably going to

05:48folks who are making much more than two times the federal poverty line. Another option that the FCCIG

05:54has explored is requiring Social Security numbers for the receipt of ACP benefits to make sure that,

06:00again, folks who are entitled to the program are actually receiving the benefit and that

06:05the benefits are not going to folks who shouldn't be receiving those benefits.

06:11But, you know, as I mentioned before, one of ACP's main problems is that it's this universal

06:16program. It's a one-size-fits-all issue. And if ACP funding should expire and Congress should

06:26begin thinking about how to reform some of these underlying programs, it needs to take those

06:34regional differences into account, right? The issues that we see in New Mexico versus Minnesota

06:39versus Texas are all different, and these one-size-approaches just don't work. We've learned

06:44that time and time again. Thank you.

Ted Cruz: 'The Biden Administration Has Engaged In Anti-Competitive Technology Bias'

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