DG Editor's Corner

The U.S. Federal Communications Commission (FCC) released the first version of its new broadband map on Friday, marking a major step toward the distribution of $42.5 billion in funding for network expansions across the country. The maps are set to be used by the government to calculate which states will get the most money from the Broadband Equity, Access and Deployment (BEAD) Program, with more funding going to those areas with the most unserved locations. But while $42.5 billion seems like boatload of cash (and, objectively, it is), I’m not convinced it’ll be enough to close the country’s broadband gap.

Back in April of this year, National Telecommunications and Information Administration (NTIA) chief Alan Davidson set an ambitious target for the BEAD program. At the time, he said the agency’s goal was to ensure 100% of the population has access to broadband offering speeds of 100 Mbps downstream and 20 Mbps upstream. The Biden Administration later codified that ambition with the launch of its aptly-named Internet for All campaign in May.

But officials will have their hands full. The FCC map released this week shows 11.2% of locations in the country lack access to wired or licensed fixed wireless access service offering speeds that meet the aforementioned 100/20 Mbps benchmark. That might not seem like much of a gap to bridge, but it’s likely that many of the locations that are unserved remain so because they’re hard to serve – either physically or financially.

On the latter point, recent news items offer a glimpse at just what kinds of costs per passing the NTIA, states and operators might be facing. Earlier this week, Verizon inked a public-private partnership deal with a county in upstate New York which will see it cover around 1,500 locations at a cost of roughly $12,000 each. Meanwhile, the state of Kansas just doled out a handful of broadband grants, awarding one provider $4.58 million to cover 385 locations. That factors out to a cost per passing of around $11,900 if divided evenly.

For context, many of the large operators in the U.S. which have undertaken massive fiber expansions have cited costs per passing ranging from $500 to $1,400.

And the costs in the New York and Kansas examples aren’t even extreme. One broadband project in Alaska funded by the U.S. Department of Agriculture’s ReConnect program came with a $203,700 cost per passing. Others in Texas and Michigan had price tags of $77,000 and $63,000 per passing, respectively.

Simple math shows $42.5 billion divided by $12,000 means the NTIA has money to reach 3.5 million locations. At $200,000 per passing, the number of locations it can cover falls all the way to 212,500.

Fierce could not immediately ascertain how many unserved locations are on the FCC’s new broadband map. However, the agency previously said around 14.5 million Americans lacked access to sufficient service – and that was when it was measuring using the lower 25/3 Mbps benchmark. That figure was widely regarded as low, with others such as LightBox pegging the number of unserved people at closer to 60 million. The number of locations unserved with 100/20 Mbps service is probably much higher than the FCC's 14.5 million estimate.

Even at the industry-standard $1,000 cost per passing, the BEAD program only provides enough to reach 42.5 million locations. While this isn’t an apples-to-apples comparison, since more than one person can live at a single location, it provides some sense of the scale of the problem.

That’s not to mention it appears to be one thing to “pass” a location and quite another to actually run fiber or cable directly to a structure. One county in Maryland actually had to create a dedicated grant category for homes with long driveways to alleviate a major connectivity challenge faced by residents there. Of the approximately 4,800 unserved homes in that county, nearly one-third were classified as having a long driveway. The county said it would offer grants of up to $15,000 to cover these locations.

But wait, you say, what about all the other money out there? What about the Rural Digital Opportunity Fund (RDOF)? What about the American Rescue Plan Act (ARPA)?

Well, first, RDOF only originally allocated money to cover around 5.2 million locations. When the FCC decided not to award funds to two of the top ten auction winners, that figure dropped to closer to 4 million locations. And as for ARPA, it’s worth nothing that while the money states got can be used to expand broadband access, it doesn’t have to be. So, while some states will use this money to ensure more residents are served by broadband, others with large coverage gaps very well may not.

Look, as someone who spent three years trying to work from home on a 6 Mbps broadband connection, I want BEAD to be a success. And to a large extent, I think it will be as long as states can execute their grant programs well (that’s another story). But I just don’t know if it’ll be enough to close the gap once and for all. Here’s hoping though.