Politicians celebrate taxpayer funds pouring into Pennsylvania to “bridge the digital divide.” Last month, U.S. Sen. Bob Casey (D-PA) praised the approval of $204.1 million to expand internet access across Pennsylvania.

But for Jim Kail, this government-funded broadband project is nothing to celebrate.

“It is designed to fail,” says Kail, president and CEO at Laurel Highland Total Communications, Inc. (LHTC). “I will put money on it now. When we look back at this program in five or so years, it’s not going to be good.”

These projects, Kail asserts, overemphasize facility construction and neglect long-term sustainability. Sadly, the buildouts lack recurring revenues to sustain service. As a result, planners tend to “build bridges to nowhere,” according to Kail.

Kail isn’t opposed to all government funding. He notes how the Universal Service Fund enabled small companies to deploy services in rural areas nationwide.

Instead, he objects to government waste.

For example, the Rural Digital Opportunity Fund, a federal program intended to expand rural internet, awarded $9.2 billion in projects in 2019. However, reporting found that nearly one-third of those projects defaulted.

Government red tape is often to blame.

Broadband companies endure an alphabet soup of regulatory agencies, such as the Federal Communications Commission and the Pennsylvania Public Utility Commission (PUC). These agencies dictate everything from accessing utility poles to monitoring internet speeds — and they often do these things poorly.

For example, PUC requires about two years to access a pole owned by another utility company, or a company can “fast-track” the process, which takes about six months.

Yet, the biggest impediment to affordable broadband is the Pennsylvania Department of Labor & Industry (L&I) — specifically, its interpretation of Pennsylvania’s prevailing wage law.

Broadband relies on “teledata” line workers. However, L&I mandates that these projects pay a prevailing wage for “electric linemen.”

This seemingly innocuous job misclassification is costly. The prevailing wage for electric line workers — about $90 per hour — is nearly twice that of teledata line workers, who make about $55 per hour in other states.

L&I’s misclassification drives up the overall cost of broadband deployment by more than 50 percent. These inflated costs make it difficult for smaller companies to compete, meaning rural communities get the short end of the fiber-optic stick.

Even progressive states, such as Massachusetts and New York, adopted job classifications delineating teledata and electrical line workers while still offering a competitive market wage.

Rather than address this red tape, lawmakers throw money at the problem.

In addition to the aforementioned $200 million, Pennsylvania has received more than $1 billion in Broadband Equity, Access, and Deployment funds and $45 million through the Multi-Purpose Community Facilities Program.

But this hefty investment—combined with the prevailing wage — inflate costs and discourages smaller businesses from extending internet to rural Pennsylvania.

These rural areas had been Kail’s bread and butter. For years, LHTC built broadband facilities in places like Ligonier Borough — all without government funding. However, government-inflated costs have discouraged Kail from bidding on further projects in Ligonier.

Rather than seek additional government grants, Pennsylvania lawmakers should pass legislation that frees small providers to build reliable rural services.

Senate Bill (SB) 188, introduced by state Sen. John DiSanto, would require legislative review of regulations with an estimated economic impact exceeding $1 million. Unfortunately, this bill and several others remain stalled in the state House.

But reform doesn’t need to come from just the legislature; Gov. Josh Shapiro could easily stop this regulatory runaround.

We know Shapiro can do this because he’s done it before. When I-95 collapsed, the governor fast-tracked permitting and other regulations that would have prolonged reconstruction. What would have traditionally been a months-long project, “mired in a slog of reviews, permits, and delays,” took only twelve days to complete.

Broadband is just as worthy of similar relief, especially if the governor genuinely values rural Pennsylvanians’ access to affordable, high-speed internet.

If we want to advance in the digital economy, we cannot rely on decades-old laws and outdated regulations. Instead, lawmakers must enact meaningful regulatory reform that reduces the economic barriers and broadens competition among providers.

Until then, bridging the digital divide will remain another broken promise by Shapiro and his fellow lawmakers.

Elizabeth Stelle is the Director of Policy Analysis of the Commonwealth Foundation, Pennsylvania’s free-market think tank. X: @ElizabethBryan