As the Omicron variant spreads across the world, COVID reminds us again of the importance of internet access.

To its credit, Congress just passed one of the biggest investments in broadband internet expansion in American history. The Bipartisan Infrastructure Investment and Jobs Act includes $65 billion for this purpose, and combined with other public and private investments, it will go a long way toward connecting the more than 14 million families and small businesses the Federal Communications Commission (FCC) says still lack reliable access to high-speed broadband internet.

However, this record funding won’t go as far as hoped because it fails to address the biggest barrier to swift broadband rollout: outdated and counter-productive utility pole regulations. This oversight needs to be addressed promptly; otherwise, it will hold back the individual and economic progress our country urgently needs.

In a new study, Patricia D. Kravtin and I show that connecting every American to broadband internet would have profound effects. On a personal level, it would ensure that people, especially in vulnerable communities, have the maximum opportunities to work, learn, play, connect to critical services, and keep in touch with loved ones.

And what’s good for individuals is also great for the economy. We estimate that nationwide broadband connectivity could create up to $314 billion in new wealth for families and small businesses. But these benefits will only come if utility pole regulations are reformed.

In the internet age, it may seem strange that old-school utility poles play such an important role. Broadband infrastructure must be attached to local poles before service can reach homes and businesses. This puts utility pole owners in a powerful position, giving them the ability to engage in what economists call the “hold-up problem.”

In layman's terms, the hold-up problem arises when certain market participants have concentrated power over a key input for economic output – e.g., controlling the utility poles upon which broadband depends. The companies in this position have an incentive to impose high and economically infeasible costs on others. Sure enough, that’s exactly what happens with broadband rollout, which explains why so many people remain unconnected to this day.

The hold-up problem is on full display when providers try to expand broadband in rural areas. It can take up to 10 poles to connect a single household or small business, yet rather than streamline the process, pole attachment policies and pole owners too often make this a costly and time-consuming process, with lengthy timetables for approval, high permitting fees, and burdensome requirements that broadband providers must meet before attaching to their poles.

The result: providers face long delays to quickly and cost-effectively expand broadband access to “last-mile” communities. In our new study, we estimate that every month of delayed broadband expansion costs Americans between $491 million and $1.86 billion in missed economic gains.

The hold-up problem will continue until pole attachment policies are modified and pole owners’ power to hold up progress is taken away. For that, the federal government must take the lead.

Common sense reforms include clear and fair regulations that result in equitable cost-sharing between pole owners and broadband providers (attachers), expedited dispute resolution, and timely review of pole permits. Policymakers could also direct already-committed funds to "utility pole relief" grant programs designed to offset high costs imposed by pole owners.

A fairer and faster system for broadband providers to attach to poles would speed broadband deployment across the country and help America become a fully connected nation more quickly. Millions of people are counting on it, and all of us will benefit from it.

Edward J. Lopez is Professor of Economics and Director of the Center for the Study of Free Enterprise at Western Carolina University.