Special Briefing on the Infrastructure Investment and Jobs Act: Clean Water, Better Broadband, Resilience, and Equity

Equitable access to water and broadband, and how to pay for it, were in the spotlight at the latest Special Briefing hosted by The Volcker Alliance and the Penn Institute for Urban Research.

"There's a lot of things we're engaged in trying to address some of the inequities that exist in our community," Newark, New Jersey, Mayor Ras J. Baraka said, kicking off the online panel discussion. He outlined the city's lead pipe initiative, which has replaced almost 22,000 hazardous waterlines in just two years, as opposed to the 10 years it was expected to take, and is seen as a model for lead pipe replacement programs across the nation. He also outlined the Newark Fiber program, aimed at providing high quality Wi-Fi service throughout the city and Port of Newark.

Baraka said he was hopeful that funds from the American Rescue Plan Act, the $1.9 trillion package enacted earlier this year, will offset the cost of Newark's water system upgrades and accelerate the broadband plan. "We can do it in two years, which I think is miraculous," he said, calling the federal money "a Godsend."

With President Biden's trillion dollar infrastructure bill and his $3.5 trillion spending plan still under debate in Congress, the Sept. 23 panel discussion centered on how broadband and water projects have been paid for in the past, and how money from ARPA is being deployed to address gaps in Americans' access to Internet and safe water. The infrastructure bill currently under consideration includes $65 billion for broadband and $55 billion to upgrade water systems.

Moderated by William Glasgall, Volcker Alliance Senior Vice President and Director of State and Local Initiatives, and Susan Wachter, Co-Director of Penn IUR, the Special Briefing on the Infrastructure Investment and Jobs Act: Clean Water, Better Broadband, Resilience, and Equity was the twenty-fourth in a continuing series. The sixty-minute conversations feature experts from the Volcker Alliance’s national research network and Penn IUR, along with other leading academics, economists, and federal, state, and local leaders.

Baraka was joined on the panel by Kathryn de Wit, Project Director of Broadband Access Initiative at The Pew Charitable Trusts; Thomas Hazlett, Macaulay Endowed Chair in Economics at Clemson University; and Howard Neukrug, Executive Director of The Water Center at Penn and former Commissioner and CEO of Philadelphia Water.

"We have spent tens of billions of dollars in public funds, taxpayer money, in broadband, but we still have significant gaps in broadband access across the country," de Wit said. Pew's research shows that the states that have had the greatest success in expanding access have taken input from a variety of constituencies, including local leaders, businesses, and other users.

"State programs were really successful by focusing on the `why' of broadband and then on implementing inclusive and community-based approaches," she said. "We found it really is less about looking for that ideal programmatic model and more about adapting a set of specific activities to specific state needs, focusing on broadband as a tool for economic development."

She listed Minnesota, Virginia, and California among states that Pew found to have effective broadband programs.

Hazlett, former Chief Economist at the Federal Communications Commission, said 96 percent of U.S. households have direct access to a fixed network which operates at least 25 megabits a second, the commission's definition of broadband since 2015. The remaining 4 percent do not have this access.

"Access, having broadband available, is the first step," he said. "Adoption, getting people online and being able to gainfully use Internet access, is basically the second step. There's a lot of interest traditionally, particularly at the federal level, in the former, but the focus has been a lot less on the latter. And that's been problematic, because the policies and the funding have generally been tied to carriers, and the actual users have been lost in the shuffle."

Hazlett said taxes and fees paid to telecommunications companies by urban and suburban users are regressive, in that they amount to a larger portion of the household budget for lower income people. But he said costs have come down under reforms undertaken by the Obama FCC to award some of the subsidies through reverse auctions, in which providers compete to offer broadband service, rather than through the cost-plus system

"There have to be certain stipulations and quality controls, and there has to be accountability that the services are actually provided," he said, "but the point of the competition is to get all the firms to compete with each other and not to favor one technology over another, and let the most efficient supplier win."

Hazlett said the winner in the most recent reverse auction for procurement of universal service subsidies was a satellite company that committed to extending service to 190,000 locations, and did so at discounts of 70 percent, compared with the cost-plus accounting that otherwise would have been used.

States, notably Colorado, have stepped up on enforcing accountability of the providers, de Wit said, something she expects to increase as federal money comes in.

The nation's water systems require "significant renewal and upgrade," having received C-, D+ and D from the American Society of Civil Engineers, Neukrug said. "These are the grades of systems that are highly vulnerable to partial or complete failure, and this has to change."

The last major federal funding program for water infrastructure came in the 1970s and 1980s under the Clean Water Act Construction Grants program. Today, federal support accounts for only 5 percent of all expenditures in the water sector. The rest is raised locally through water rates or through municipal or revenue bonds, Neukrug said.

"Overlying the enormous cost of replacing our aging infrastructure is preparing for climate change," he said, as extreme weather events have led to flooding, water scarcity, sea level rise, and increased risk to life and property.

Neukrug credited wastewater utilities for moving from being a city's major user of energy to being net-zero or net-positive energy facilities. "The new goal is to become greenhouse gas neutral." he said.

In addition to recovering other resources such as phosphorous, micro plastics, and carbon from the waste stream, Neukrug said the technology exists for "the recovery of the water itself. We can now treat wastewater to a level appropriate for or re-use, even to the level of direct potable re-use in communities. As you can imagine, this holds really great promise for our friends on the west coast."

But while noting progress in Philadelphia and elsewhere, Neukrug added: "Renewal and upgrade of our nation's water infrastructure will be extensive and expensive. Any increase in federal appropriations would help bring the water sector and the country closer to 21st century standards and our nation's expectations of resiliency and sustainability."

In addition to funding, panelists said, cooperation from all levels of government will be key to strengthening water and broadband services.

County, state and local authorities contributed to the success of Newark's lead pipe replacement program, Baraka said, through such measures as authorizing the use of "public dollars to pay for private fixes," and allowing repairs in homes that residents didn't own.

Flooding after Hurricane Ida showed the need for paved-over cities like Newark, to separate the stormwater runoff from the sewers, to prevent floodwater from overwhelming the system.

"We need to address these environmental inequities—the impervious surfaces, all these hard tops, and not enough trees, not enough garden space, not enough areas where water can be absorbed," Baraka said. "All of that takes a lot of money.

"I agree none of this can get done without serious cooperation," the mayor added. "It would be great if there was some kind of task force to create federal state and local policy together. The money has to come to cities to make it happen. We have to execute all these things."

Special Briefings are made possible by funding from The Century Foundation, the Volcker Alliance, and members of the Penn IUR Advisory Board. The next Special Briefing is scheduled for Oct. 21.