In an Op-Ed in the Topeka Capital-Journal, we, NTCA, joined with the USTelecom Association to highlight a report we recently released on the economics of deploying broadband in rural areas. Just sharing some of the thoughts that my counterpart Jonathan Spalter and I had put pen to paper on with you here since it certainly beats me paraphrasing it from the floor of the Charlotte airport….
“Like electricity, broadband is essential to every American. Yet U.S. broadband infrastructure has been financed largely by the private sector without assurance that such costs can be recovered through increased consumer rates. Indeed, internet service providers have invested more than $1.6 trillion over the last two decades building out our nation’s world-leading digital infrastructure. As a result, deployment to rural households is up 117 percent over the past 10 years alone.
This private-led investment model often works well for projects in reasonably populous areas. But significant barriers arise as economies of scale dissipate. For example, capital investment in rural areas for laying fiber optic cable is on average approximately 4.2 times higher than in suburban areas.
Simply put, when you combine the substantial costs of laying fiber across a vast geographic area with a dwindling number of customers, the private sector can’t go it alone.
As the report details, these immutable economic realities leave three choices when it comes to deploying and operating infrastructure in rural America: (1) Cost-prohibitive prices; (2) leaving three million rural American households unconnected; or (3) solutions that unite the public and private sectors to finish the job of building a truly connected nation. Without question, the last choice is the only acceptable path forward just as it was in wiring rural America with electricity and building our nation’s highways.
Broadband providers need a committed partner to finish the job of connecting unserved communities. That partner should be all of us as Americans — in the form of our government.
Numerous federal programs exist and can be enhanced to accelerate rural connectivity, chief among them the Connect America Fund, which recently began its most recent round of auctions to advance cost-effective rural connectivity. State and local efforts also are underway that complement federal efforts and could be replicated to further fuel meaningful progress. In New York, officials just completed a $500 million broadband auction to deploy high-speed service to 99 percent of its residential structures. The report also references important work underway in Pennsylvania, Ohio, Wisconsin, Georgia and Missouri.
Equally essential, the analysis warns of the risks involved with misguided approaches by any competitor or stakeholder, be they communications companies, electric utilities, or government, such as relying upon internal cross-subsidies, or worse still, failing to provide any subsidies or support at all where needed in rural areas.
Achieving a truly connected nation should be a unifying and nonpartisan national objective — one deserving of a sense of urgency so no community is left behind. Government funding, partnered with continued investment from experienced broadband providers, will help rural healthcare providers enhance patient care, empower schoolchildren with world-class educational opportunities and enable local businesses to create jobs and thrive.”
Given the important role that Senator Roberts from Kansas plays in the Farm Bill deliberations and conference committee underway, I remain hopeful that thoughtful heads will prevail to ensure the best use of limited resources to ensure that we do all we can to expand broadband access and part of that effort will be to be honest with ourselves about the price tag attached to that connectivity.