Last fall, I produced a model to estimate how far the BEAD funding might go, using estimates of the unserved and underserved from the old Form 477 data.
Feb 1, 2023·edited Feb 1, 2023Liked by Mike Conlow
Are you taking into account ARPA funding? There are hundreds of millions in funding that states are taking advantage of from that bill, and those areas will be considered served, since Federal money has been awarded to deploy broadband there. That is supposed to apply to any awards that are made up until the point that the NITA makes their final calculation of unserved areas for a State, even where construction has not begun. The other variable is 5G service from licensed wireless providers like T-Mobile and Verizon. They will be putting on the map all of the areas they now cover with mid-band or better 5G service, which will exceed the 25 x 3 threshold. However, in that case, those areas are not supposed to be added to the map unless they were in operation and available to customers as of December 31, 2022.
Great comment. I'm not taking ARPA funding areas into account. Is there a data source for where ARPA funds are being spent? I'm not aware of it...
I believe the "5G service" will be factored into the v2 National Broadband Map that the FCC puts out, and the NTIA uses for their allocation. Providers are submitting coverage now, and like the v1 map it will have these FWA offerings on it.
(1) This is an East of the Mississippi / West of the Mississippi division. East of the Mississippi River looks pretty good. West of the Mississippi looks pretty terrible.
(2) Not enough money to extend fiber broadband to all unserved and underserved locations. No money left over to address even bigger broadband adoption gaps.
(3) There is significant skepticism about the "houses passed" metric being used by fiber advocates (i.e., that it severely underestimates true costs to connect a home). Perhaps a worst case, but you might want to look at average costs for USDA Reconnect grants and loans. Even assuming your cost estimates are good estimates, will the private sector be willing to raise 25% or more matches with average costs exceeding $15,000 per household. Is the private sector willing to invest $4,000 or more per household to deploy fiber broadband networks in rural areas?
Totally agree on (1). East and West of Mississippi, which is largely driven by the cost to serve increasing in those states.
On (2) I think some states (again eastern states) may have LOTS left over for adoption programs. I don't think western states will be able to reach all the underserved as well as the unserved.
(3) is tricky obviously. I'm aware of the debate around whether cost to serve includes costs from the curb to a set-back farm house, and whether the cost is correct generally. I will say there are some people, I'll let them speak for themselves, that think the cost to serve in this kind of analysis is actually too high -- that they can build in rural areas for cheaper.
In term of private capital, in the RDOF auction private capital brought 90% of the estimated cost in 20% of cases, and in the majority of cases brought the majority of the capital. I don't know of a reason to concede that this time is different. Thoughts about that?
Are you taking into account ARPA funding? There are hundreds of millions in funding that states are taking advantage of from that bill, and those areas will be considered served, since Federal money has been awarded to deploy broadband there. That is supposed to apply to any awards that are made up until the point that the NITA makes their final calculation of unserved areas for a State, even where construction has not begun. The other variable is 5G service from licensed wireless providers like T-Mobile and Verizon. They will be putting on the map all of the areas they now cover with mid-band or better 5G service, which will exceed the 25 x 3 threshold. However, in that case, those areas are not supposed to be added to the map unless they were in operation and available to customers as of December 31, 2022.
Great comment. I'm not taking ARPA funding areas into account. Is there a data source for where ARPA funds are being spent? I'm not aware of it...
I believe the "5G service" will be factored into the v2 National Broadband Map that the FCC puts out, and the NTIA uses for their allocation. Providers are submitting coverage now, and like the v1 map it will have these FWA offerings on it.
I don't know if there is a place to see all broadband funds that have been awarded through ARPA, but there have been various news stories as states have used the funds for broadband grants. Here are two recent stories: https://gov.georgia.gov/press-releases/2023-01-04/gov-kemp-announces-grant-funds-expand-high-speed-internet-access-28 and https://ded.mo.gov/content/state-awards-261-million-through-arpa-broadband-infrastructure-grant-program-fund-60. There were several last year, as well.
Excellent work. Keep it up! Three quick thoughts:
(1) This is an East of the Mississippi / West of the Mississippi division. East of the Mississippi River looks pretty good. West of the Mississippi looks pretty terrible.
(2) Not enough money to extend fiber broadband to all unserved and underserved locations. No money left over to address even bigger broadband adoption gaps.
(3) There is significant skepticism about the "houses passed" metric being used by fiber advocates (i.e., that it severely underestimates true costs to connect a home). Perhaps a worst case, but you might want to look at average costs for USDA Reconnect grants and loans. Even assuming your cost estimates are good estimates, will the private sector be willing to raise 25% or more matches with average costs exceeding $15,000 per household. Is the private sector willing to invest $4,000 or more per household to deploy fiber broadband networks in rural areas?
Thanks!
Hey Paul, Thanks for the comment.
Totally agree on (1). East and West of Mississippi, which is largely driven by the cost to serve increasing in those states.
On (2) I think some states (again eastern states) may have LOTS left over for adoption programs. I don't think western states will be able to reach all the underserved as well as the unserved.
(3) is tricky obviously. I'm aware of the debate around whether cost to serve includes costs from the curb to a set-back farm house, and whether the cost is correct generally. I will say there are some people, I'll let them speak for themselves, that think the cost to serve in this kind of analysis is actually too high -- that they can build in rural areas for cheaper.
In term of private capital, in the RDOF auction private capital brought 90% of the estimated cost in 20% of cases, and in the majority of cases brought the majority of the capital. I don't know of a reason to concede that this time is different. Thoughts about that?
RDOF link: https://mikeconlow.substack.com/p/how-far-might-broadband-funding-go-64e#:~:text=Private%20capital%20brought%20more%20than%2090%25%20of%20the%20necessary%20funding%20in%2020%25%20of%20the%20locations%20that%20were%20won%20by%20providers%20planning%20to%20offer%20gigabit%20service.