August 13, 2018
By Jonathan Spalter and Shirley Bloomfield
From the hollers of West Virginia, to the rugged coastal islands of Maine, to the rolling hills of a Texas ranch and far-flung Native Alaskan villages, connecting our most remote rural communities to broadband infrastructure is essential to their full participation in a connected, digital world. Nearly all aspects of our modern lives depend on this critical resource — from jobs and our economy, to health care, education and our sense of community.
USTelecom—The Broadband Association and NTCA—The Rural Broadband Association have commissioned and released important new research examining the sobering fiscal realities of deploying and sustaining strong, reliable broadband networks in rural America.
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.
With adequate and constructive government support, alongside the continued commitment and innovation of our nation’s broadband companies, the dream of a truly connected nation is within reach. It’s time to make it a reality for all Americans.
Jonathan Spalter is president and CEO of USTelecom, and and Shirley Bloomfield is CEO of NTCA.
NOTE: This op-ed originally appered in Morning Consult on June 11, 2018. View the op-ed here.