How the Shapiro Administration Doubled the Cost of Broadband

The digital divide – the gap between communities with and without access to high-speed internet – is a prominent issue in Pennsylvania. More than 330,000 Pennsylvania households, businesses, and community institutions lack broadband.

Unfortunately, the Pennsylvania Department of Labor and Industry (L&I), under Gov. Josh Shapiro’s leadership, has doubled the cost of broadband development with regulatory red tape –leaving many communities in the digital dust.

L&I now faces dozens of broadband expansion projects awarded under the Pennsylvania Broadband Development Authority’s (PBDA) Capital Projects Fund Broadband Infrastructure Program. In April, PBDA approved $204.1 million in grants to expand high-speed internet access in unserved and underserved areas throughout Pennsylvania.

And L&I’s intransigent commitment to one policy – prevailing wage – will determine how much we pay to bring broadband to residents and businesses statewide.

Prevailing wage, an absurd policy weaponized by Shapiro when he was attorney general, requires government-contracted employers to pay their employees rates paid to other workers in analogous private sector settings. The policy reflects a certain cynicism about private businesses’ willingness to treat employees properly. Moreover, in practice, prevailing wage favors organized labor and prevents employees from taking work that pays a dollar less than the union-negotiated rate.

Inevitably, Pennsylvania’s prevailing wage drives up the cost of government projects.

The PBDA’s Broadband Infrastructure Program is falling into the predictable trap laid by prevailing wage requirements. In determining the prevailing wage, L&I needs a job classification to compare workers across sectors.

But L&I does not have one for workers laying broadband lines, known as “teledata linemen.” The closest match, says L&I, is “electric linemen.” Typically, electric linemen have electrician licenses, as the work often involves high-voltage cabling. Not something encountered in laying broadband. The label, therefore, is not a fit.

Unfortunately for taxpayers, L&I’s job misclassification is costly. In other states, teledata line workers earn, on average, a respectable $55 per hour. Yet in Pennsylvania, teledata line workers, wrongfully classified as electric line workers, must receive $90 per hour, according to L&I.

Predictably, this careless application of Pennsylvania’s prevailing wage law drives up the overall cost of broadband deployment by more than 50%.

It’s not politics; it’s logic. Progressive states, such as Massachusetts and New York, adopted job classifications that distinguished between teledata and electrical line workers. All the while, these blue states still offer broadband builders a competitive market wage.

Wasting the limited resources Pennsylvania devoted to rolling out broadband could mean that many of the Keystone State’s unserved and underserved communities will remain offline without the benefits of high-speed internet. Even after spending all this money, Pennsylvania could lose access to remote job opportunities, distance learning, telehealth, e-commerce, and so much more.

If you spend millions of taxpayer dollars to roll out broadband, you might as well seek to connect as many Pennsylvanians as possible. Rather than unwisely throwing more money than needed at Pennsylvania’s digital divide, L&I should correct the error – specifically, the commonwealth’s prevailing wage law.

This is a perfect opportunity for Shapiro to help Pennsylvania, in his words, “move at the speed of business.”

Fortunately, fixing this wouldn’t require a heavy lift by the governor. Shapiro can start by instructing L&I to stop relying on outdated job classifications. While prevailing wage is the law, how L&I interprets it is not. Delineating between teledata and electrical line workers would not require new legislation. More important, the update would cut the cost of broadband development nearly in half.

By removing barriers to genuine competition in government contracting, Shapiro can fulfill his campaign promises of making Pennsylvania “open for business” and “competitive as hell.”

Until Shapiro and L&I address this root cause, Pennsylvanians can expect the digital divide to prevail.