Study: Universal Broadband Will Cost $230 Billion, Way More Than The U.S. Is Investing
from the a-job-half-completed dept
We’ve long noted how entrenched broadband providers have historically refused to upgrade areas that don’t deliver immediate, favorable returns (quite often poor, minority, and low income neighborhoods). That, combined with a monopoly assault on competition and regulatory oversight in most markets, has left the U.S. with patchy, substandard broadband networks we’re still struggling to track the full impact of.
On the plus side, the U.S. government is currently in the process of investing more than $60 billion in broadband thanks to American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA). And while that’s going to be an historic investment, it’s still not enough to get the job done, according to a new report.
A report by fixed wireless equipment provider Tarana Wireless claims the full cost to the federal government to bring fiber broadband to every U.S. household that NTIA considers “unserved” or “underserved” would be approximately $230 billion:
Tarana estimated fiber deployment costs based on an analysis of 132 fiber broadband deployments that received funding through state-level programs in five states – Alabama, California, Michigan, Nebraska and Virginia. The goal was to select a group of states that would be representative of deployment costs nationwide.
There’s a narrative stumbling around the telecom policy space that between ARPA and the Broadband Equity, Access, and Deployment (BEAD) funding included in the infrastructure bill, that we’ve got this whole “digital divide” thing pretty much whipped. But Tarana (which is trying to position itself to receive subsidies for fixed wireless) insists that’s simply not the case.
A hard number has traditionally been difficult to pin down, given our sloppy failures at broadband mapping, and the complications of estimating the final combination of taxpayer subsidies and other, often long-term investments in last mile and “middle mile” networks.
How we invest the billions we do have remains the more pressing issue.
The lion’s share of this new broadband funding is already being hoovered up by the same telecom monopolies largely responsible for the nation’s broadband gaps, via their relentless attacks on smaller competitors. Unsurprisingly, those industry giants have been working overtime to redirect this historic round of funding into their pockets, and away from smaller, local businesses, cooperatives, utilities, or municipal broadband builds.
U.S. policymakers generally aren’t willing to stand up to powerful, entrenched telecom monopolies tethered to our first responder and intelligence gathering systems (most can’t even acknowledge monopolization is a problem). So what we get is a kind of policy theater, in which policymakers throw billions of dollars at a problem but refuse to address the real, underlying cause of dysfunction.
In the U.S. (and in much of the world), that cause is telecom giants who’ve monopolized the market and captured all federal and local regulators, ensuring their geographical fiefdoms never see meaningful competition. That, in turn, results in high prices, slow speeds, patchy availability, and terrible customer service; issues we generally only pay lip service toward.
So while the huge infusion of funding from ARPA and the IIJA are most certainly going to help, the impact’s going to be muted if the lion’s share of an already insufficient funding amount is thrown at the monopolies most responsible for the sector’s biggest issues. Investing a large chunk of this funding instead into open access, community-owned fiber networks would also help dramatically, but that’s generally been a message captured U.S. policymakers don’t want to hear.
Filed Under: broadband, broadband maps, community broadband networks, digital divide, fiber, gigabit, high speed internet, open access fiber, universal broadband
Comments on “Study: Universal Broadband Will Cost $230 Billion, Way More Than The U.S. Is Investing”
Simple decision
If the Gov’t gave $1B to one of the smaller companies to build out a broadband solution, that company would spend the money building and delivering that solution.
If the Gov’t gave $1B to one of the big boys, that company would raise their campaign contributions, raise executive bonuses, and increase the value of the company, thus increasing the value of the stock that all the reps have in their portfolios.
duh.
Re:
…and then the small company would be bought out by one of the big monopolists. Giving more money isn’t useful when there are no real rules.
While the broadband gap is justification for subsidies, why should the Telcos make more that a token effort with the money they receive, as actually fixing the problem would end the subsidies.
Re:
Well, that should be where effective regulation comes in, where there’s strings attached to the subsidies and corporations can be fined and/or forced to return subsidies (and refused further subsidies) if they don’t hit certain targets, leaving the path of investing in the infrastructure and reaping the profits being the best business option.
Alas, that effective regulation is not present in many markets in the US, or if it is it’s been bought by the same companies they’re meant to be regulating…
Apparently socialism is ok when rich folk benefit.
Re:
Same as it’s always been – “socialise the risks, privatise the rewards”.
Some people will whine over $50 in food stamps or other benefits that are proven to make a net profit in returns to the economy, but at the same time support tax cuts to the rich or handouts to corporations to the tune of millions with zero return and not bat an eye. It’s not “socialism” if the “right” people make the profits…
I already have this
Shortly after I moved to a rural area in 2017, the local rural telephone company [absolutely stand alone NOT part of a bigger company] upgraded from standard cable broadband to fiber. Initially I got 200mbps up and down speeds, lately it’s been more like 400mbps (I think they’re testing new equipment but like ALL ISPs they really don’t tell us what they’re doing).
My understanding is that Trump did something that made this possible. I don’t know why, I just know that I have broadband that is 10x faster than anything I ever got while living in St Paul or getting phone service in Wisconsin from the infamously horrible Frontier.
Not promoting Trump and I have no idea if he deserves any credit, but something changed around 2018-19 that resulted in my extremely rural community getting the best broadband I’ve ever had so whatever was done by whoever, could we please have more of that?
The problem is, if you try to earmark $230B for such an initiative, that money will all but certainly go to stock buybacks, executive bonuses and dividends instead. Capitalist dictatorship has essentially made a universal broadband initiative impossible in the US.
Public broadband
Is universal broadband something that should be a public infrastructure undertaking, like building sewers and storm drains?
It seems like broadband should be the next public utility. It is something like an essential technology, like electricity and water, something that everyone is expected to need so that the costs and services should be socialized.
While it does seem that governments can undertake it with their taxing and eminent domain powers, would there be risks that the government might build in surveillance or demand restrictions on how the public can use it?
Re:
Yes, but define “broadband”. If we go with “open access, community-owned fiber” as suggested by Karl (see the article’s link that starts with this text), that should get government out of dealing with customer service, network policies (including peering), copyright notices, etc. If encrypted, they wouldn’t even be able to interfere.
If we go with leasing conduits or dark fibers, that’s even less for government to run—they can pretty much drop those in while building sewers and storm drains. That would, however, raise capital costs for ISPs, and I don’t know whether we’d get enough competition. Perhaps it’s best to have both models available.
Re: Re: Ownership and operation
For “broadband,” the technical requirement would be what physical equipment would deliver the fastest, most cost-effective service to every residence and business that wants the service.
The question of how public should universal internet service would be: Is the government the owner, and is the government the operator?
This is important both for public policy (is it something so vital as to declare it a right and a public concern) as well as accounting (on whose ledger do the assets, liability and equity and transactions appear).
This can be achieved as:
Public owner/public operator: The government owns the infrastructure and is responsible for the day-to-day operations and maintenance. Examples: Municipal utility, transit system that hires its frontline workers directly, US Postal Service
Public infrastructure: The government owns the assets and liabilities to facilitate private activities, but does not have an obligation to match revenues with liabilities. Example: Roads and highways, water inflow and outflow, US Department of Interior.
Public owner/private operator: The executive-level decisions are made by a public board but the services are bid on by franchising or tendering. Example: FCC, commercial and general aviation airports, transit system that contracts out frontline work.
Private owner/public operator: The government delivers the service but requires paying the private sector to carry out the services. Example: Amtrak, any government agency that must lease a building rather than own it outright.
How much if they connect only to Mars instead?
Universal broadband
Does universal broadband protect the egg laying Chickens when the coon is prowling? That is by definition an essential service.
In rural Arkansas I have a buried broadband cable right next to me. I am not connected, but the thing is used to access my computer, even when it is turned off. I have since relocated it to a more secure area on the property.
For the record, this is not paranoia. Since relocating, the problem was dealt with. The culprits were clever cyberwise, but reality wise they forgot about the battery level gauge.