Analysis

Why Rural Internet Is Still Terrible, Despite Billions in Federal Spending

The US government has spent billions of dollars on several rounds of programs to upgrade internet speeds in rural areas over the past decade. Despite those efforts, many residents are still stuck with service that isn’t fast enough to do video calls or stream movies—speeds that most take for granted.

Challenges to Universal Adoption: A Look at NTIA’s New Data

The National Telecommunications Information Administration (NTIA)'s Internet Use Survey of November 2021 confirms what the data has said in the past: the digital divide is predominantly a problem of a lack of interest, not affordability, at least with respect to adoption. Affordability is not the dominant driver of non-adoption, a result spanning many years. Also, as adoption rises over time, a lack of interest will increasingly explain non-adoption and price less so. This result comports with economic reasoning.

The Digital Equity Challenge

It’s hard to look anywhere in the broadband industry today and not hear about digital inclusion. One big reason for this is the two giant grant programs created by Congress in the Infrastructure Investment and Jobs Act to tackle digital equity issues. The first is the State Digital Equity Capacity Grant Program, that will allocate $1.5 billion to the States for this program – that’s $300 million per year from 2022 through 2026. The second is the Digital Equity Competitive Grant Program.

Private Equity and Rural Fiber

I’ve been asked three or four times in the last few weeks why anybody would invest in building rural broadband networks with the goal of getting rich. I’ve been hearing the same rumors as everybody else that there are private equity investors ready to jump into the rural grant arena. I have no specific knowledge that this is going to occur, but I’ve run across several internet service providers (ISPs) recently who claim to have access to nearly unlimited equity funding.

Broadband is the Future of New Hampshire

According to U.S. News & World Report, New Hampshire is 10th overall in access to broadband, But the state ranks 35th for data speed. BroadbandNow estimates that only 30 percent of the state has access to fiber-optic service and only about 7 percent has access to 1-gig service. On June 7, 2022, the U.S.

Capital Projects Fund Aids West Virginia's Billion Dollar Broadband Strategy

In October 2021, Governor Jim Justice (R-WV) announced a billion-dollar strategy to bring broadband access to 200,000 homes and businesses in West Virginia. “We’ve been talking for years about how to fix the rural broadband problem. Now we’re finally going to do it," he said. The plan got a $136 million boost from the U.S.

Maximizing BEAD’s Broadband Reach

The National Telecommunications and Information Administration (NTIA) is beginning an epic effort to implement the broadband provisions of the Infrastructure Investment and Jobs Act (IIJA). Congress allocated $42.45 billion to build rural broadband through the Broadband Equity, Access, and Development (BEAD) Program, and these resources have the potential to provide internet access to most if not all households that do not currently have access. NTIA states in its Notice of Funding Opportunity (NOFO) that its focus is to provide service to unserved and underserved areas.

The Municipal Broadband Battle

The Infrastructure Investment and Jobs Act made it clear that Broadband Equity, Access, and Deployment (BEAD) Program grants should be made available to everybody—commercial entities, non-profit entities, Tribes, and municipal entities. But there will be an eventual showdown since many states have barriers or restrictions against municipal participation in building, owning, or operating commercial broadband networks. If there is any one area where politics creep into building broadband, it is with state restrictions on municipalities.

Treasury Helps Broadband for Everyone in Louisiana

Louisiana is aiming to close the digital divide in the state by 2029. Getting there could cost over $1 billion. This week, the state partnered with the U.S. Department of Treasury to help reach that goal. On June 7, Treasury approved Louisiana for $176.7 million of support from the Coronavirus Capital Projects Fund (CPF).

The Extra Costs of BEAD Funding

There are a lot of extra costs for a broadband provider to accept Broadband Equity, Access, and Deployment (BEAD) Program funding including Environmental and Historic Preservation Reviews, Letters of Credit, Prevailing Wages, Requirements on Contractors, Reporting Requirements, and Taxes. I have to laugh when I look at these requirements and see that reaching that single remote location might get layered with hundreds of thousands of dollars of extra costs. The biggest drawback of expensive grant compliance is that it drives up the cost of every grant project.