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Accurate Maps Required To Estimate Cost Of Connecting Rural America, Experts Say

Experts say it’s difficult to get an understanding of cost for connecting rural regions without quality maps.

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Screenshot of David Scott from the House agriculture meeting

April 22, 2021—The House Agriculture Committee convened a hearing this week to discuss the needs and costs associated with expanding broadband coverage to rural constituencies, hearing that accurate maps will be needed to get a better idea of those costs.

Chairman David Scott, D-Georgia, wanted concrete numbers during the hearing held Tuesday. He pressed witnesses for what they believed it would cost to cover the estimated 24 million rural Americans who are currently living in underserved areas of the country.

Vickie Robinson, general manager of the Microsoft Global Airband Initiative, was hesitant to throw out a hard number. “There are estimates that suggest that the cost to reach those that are unserved is anywhere from 60 to 80 billion dollars,” Robinson said. But those estimates should not necessarily be relied upon, she said, adding, “We haven’t first done the hard but necessary work to accurately map where those gaps exist.”

Robinson said the FCC currently does not have the tools necessary to effectively map these gaps, and that congress could enable them to do so by providing better funding for the Broadband Data Act that was passed in March of 2020. She stated that only after this mapping is completed can the government begin to determine which technologies would be best suited to meet current demand, and ultimately, a price tag.

Could cost as much as $150 billion

Not all witnesses were so hesitant to provide estimates. CEO of the Wabash Heartland Innovation Network Johnny Park estimated that providing coverage for the rural regions in question would cost approximately $150 billion. He indicated that costs could be kept down by continuing to promote innovation, explore emerging technologies, and collect mapping data to determine how to best meet the needs of unserved Americans.

“It is not a one size fits all solution,” Park said. “We need to embrace a diversity [of technology] to make sure that the right type of technology is deployed.”

Scott closed out the meeting on an ominous note: “There is no mistake about it—China wants to take our place as the leading agriculture industry in the world.” He stated that while the rest of the world is continuing to push forward, the U.S.’s inability to get its farmers connected would result in it being surpassed by both allies and adversaries alike.

Reporter Ben Kahn is a graduate of University of Baltimore and the National Journalism Center. His work has appeared in Broadband Breakfast, Washington Jewish Week, and The Center Square, among other publications. He primarily covers Big Tech and spectrum policy.

Rural

Local Governments Provide Valuable Information for Rural Infrastructure Builds

Rural communities vary in broadband needs, making community engagement essential for breaching the digital divide.

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Photo of Scott Woods, Josh Seidemann, Jerry Kuthy and Bob Knight (left to right) by Teralyn Whippe

WASHINGTON, May 11, 2022 – A critical first step to delivering on the Infrastructure Investment and Jobs Act for rural communities at a local level is community engagement and understanding, panelists said at a Tuesday event of the Local Initiative Support Corporation.

As a local leader in a rural community “the first thing to do is a community survey,” said Josh Seidemann, vice president of policy at NTCA – The Rural Broadband Association.

Seidemann and other panelists provided advice on what local communities need to do to be successful in applications under the IIJA. The process is expected to kick off upon release of rules from the Commerce Department’s National Telecommunications and Information Administration. The agency must release rules under the IIJA by May 16.

A community survey will help “determine and evaluate where your community needs broadband the most,” said Seidemann. Such a survey is “going to inform and illuminate the type of network that will best meet your needs.”

Community needs can vary due to topography and existing infrastructure available for use. “Make sure your network meets your community needs,” added Bob Knight, CEO of public relations agency Harrison Edwards and a local government official in Connecticut. He is co-chair of Fiber Broadband Association’s public officials group. “The best projects have an element of community engagement.”

Jerry Kuthy, Program Officer at Cameron Foundation, urged local leaders to create a mapping system of their individual geographical broadband needs.

The Virginia Department of Housing and Community Development launched an interactive broadband coverage map in April of 2022. Kuthy said the map will help local leaders in Virginia roll out funding for rural broadband infrastructure.

Mapping areas of focus for broadband projects has long been the focus for state and regional leaders, in part because so many people have expressed disappointment at previous FCC broadband mapping efforts.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. The role of Community Development Financial Institutions was also discussed at the event.

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Rural

Community Development Financial Institutions Funds Prepare for Broadband Infrastructure Funding

CDFI funds are responsible for rural Wyoming broadband and may offer a solution to rural areas across the nation.

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Photo of Brian Vo

WASHINGTON, May 11, 2022 – A Treasury Department program that is bringing capital to disadvantaged communities is helping drive key money into broadband infrastructure builds in rural America, some of those recipient institutions said at an event Tuesday.

The department provides grants to and certifies institutions such as banks, credit unions, loan funds, microloan funds, or venture capital providers as Community Development Financial Institutions that provide financial services in low-income communities and to people who don’t have access to financing, according to the government website.

The program is also helping build much-needed broadband connectivity, as seen in rural Wyoming, where the Midwest Minnesota Community Development Corporation has already utilized CDFI funds to finance a project to run fiber optics networks to rural Wyoming.

“We believe that there’s capital available for rural broadband,” Gary Franke, managing director of the communications group at CoBank, said at the Local Initiative Support Corporation event on Tuesday.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. CoBank, however, is not a CDFI.

Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” he said.

Suzanne Anarde, CEO at Rural Community Assistance Corporation, a CDFI, said Tuesday that CDFIs must “find out what our individual niche is and how we can build capacity that makes us viable.”

Brian Vo, chief investment officer at Connect Humanity said that his organization could work with CDFIs in the future to fund their holistic approach to digital equity.

Photo of Brian Vo (right) by Teralyn Whipple

LISC alleges that the large national financial institutions are not interested in making investments to improve rural broadband expansion across the country. The organization states on its web site that “rural broadband is lacking in many areas because the large national providers are not interested in making the investment.”

“We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come,” Franke said.

There are currently more than 1,200 CDFI funds operating across the nation, many of which are now focusing on crossing the digital divide by providing funds for rural broadband infrastructure.

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Universal Service Fund in Need of Reform, Said Panelist at Broadband Community Summit Event

The Universal Service Fund’s base is shrinking.

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Photo of Carol Mattey speaking.

HOUSTON, May 3, 2022 – As funding for the Universal Service Fund continues to fall year over year, the Federal Communications Commission is evaluating options to reform it.

During Broadband Communities Summit 2022, Principal Consultant for Mattey Consulting LLC, Carol Mattey anticipated what kind of changes to the Universal Service Fund that stakeholders could expect in the coming years.

The Universal Service Fund is responsible for funding several high-profile financial benefits including the Rural Digital Opportunity Fund, the Connect America Fund, E-Rate, the Lifeline Program, and the Rural Healthcare Program.

The USF is funded through compulsory service provider contributions. Though those contributions have historically been based on providers’ interstate and international telecommunications service revenues, critics of the program argue that providers are increasingly able to dodge these contributions by reclassifying their sources of revenue.

A common misconception for dwindling contributions is cord cutting, Mattey said. As more people drop landlines, there is simply less voice revenue – but that is only part of the issue.

Mattey said that while information revenues have increased through consumer use of the internet, voice revenues have fallen. This disparity has caused the telecommunication contribution to skyrocket and could be nearly 30 percent in 2022.

Mattey explained that most companies simply bill their consumers to offset that amount, and as a result, the contribution has been disproportionately burdened by the elderly who are more likely to use landlines.

When addressing potential reforms, Mattey pointed to three most likely possibilities being considered: broadband internet access revenue, a flat fee per voice and broadband connection, and a flat fee per phone number.

“Any reform needs to be simple and must be able to be audited,” she said. “The current system is not equitable.”

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