Analysis

The Federal Communications Commission is still considering using broadband labels that are supposed to explain broadband to customers. This sounds like a really good idea, but I wonder if it’s really going to be effective. Some of the items included on the FCC sample label are great. The most important fact is the price. It has become virtually impossible to find broadband prices for many internet service providers (ISPs). Many ISPs, including the largest ones, only show special pricing online that applies to new customers.

Broadband markets in the United States are by and large competitive today, and the trends indicate that competition is becoming more widespread. Federal Communications Commission data show that the share of US households that have access to multiple providers of fast broadband is already very large and is increasing rapidly.

Most of the published summaries of the Broadband Equity, Access and Deployment (BEAD) grant rules state that the BEAD program will provide 75 percent of funding, meaning a grant applicant must contribute 25 percent of the cost of the grant project. The reality is that the matching rules are more complicated than that simple rule. Matching funds can come directly from the grant applicant or can be provided by local and state governments using funding from the CARES or the ARPA programs.

The Arctic region has largely been left out of the broadband arena in the past due to the high cost of building last-mile broadband infrastructure. But this lack of broadband looks to be changing as multiple satellite companies are targeting the region as a good business opportunity. A number of satellite companies are also developing plans and partnerships around bringing their services to the Arctic region. Satellite broadband is an awesome solution for places where there are likely to be no alternatives.

I took part in a webinar last week for the National Rural Telecommunications Cooperative (NRTC) that talked about the good, the bad, and the money issues with the upcoming Broadband Equity, Access and Deployment (BEAD) Program grants. At the end of the session, the last question asked, “How do you reconcile some of the impractical aspects of the BEAD grant processes with the reality of the market?” My response to the question was to get immediately get involved with your State broadband grant office.

As might be expected when there is $42.5 billion in grant funds available, we are probably not done with the rules for the Broadband Equity, Access and Deployment (BEAD) Program grants. There are several areas where heavy lobbying is occurring to change some of the rules established by the National Telecommunication and Information Administration (NTIA) in the Notice of Funding Opportunity (NOFO) for the grants.

In the first quarter of 2022, half of the new broadband customers went to the fixed-wireless access products from Verizon and T-Mobile. T-Mobile and Verizon are aggressively marketing the product, which is touted to have download speeds over 100 Mbps. The market is going to get hotter when Dish gets its launch underway soon. AT&T has also been promising a major new marketing effort to sell the product.

One of the most interesting sections of the Broadband Equity, Access and Deployment (BEAD) Program Notice of Funding Opportunity (NOFO) requires that states must define how they are going to make it easier for grant recipients to implement broadband solutions.

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.

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.