Johnny Kampis: The Impracticality of Widescale Fiber Broadband in Alaska
The USDA spent $34.91 million on fiber to reach 28 customers in two remote Alaska villages, topping $2 million per passing, the author says
Recently released records show that the Biden administration’s heavy fiber focus for broadband deployment was extraordinarily costly to taxpayers.
Obtained by the Taxpayers Protection Alliance Foundation (TPAF) through a Freedom of Information Act (FOIA) request to the U.S. Department of Agriculture (USDA) nearly three years ago, the files show that taxpayers footed the bill for little-used fiber broadband connections in Alaska. For one project, the total cost was more than $2 million per residence or business passed.
While fiber may be appropriate for certain locations, these projects are breaking the bank and costing taxpayers dearly.
TPAF first requested records from the USDA on November 14, 2023, seeking information regarding the award of funding to certain entities in Round Four of the ReConnect Loan and Grant Program. TPAF requested information about applications from Cordova Telephone Company, Unicom, Interior Telephone Company, and Mukluk Telephone Company.
TPAF sent the FOIA requests to learn more about the decision-making process at the USDA for the program, which offers loans and grants to facilitate broadband deployment in areas of rural America.
After nearly three years of waiting, TPAF finally received a response from the USDA. An interim letter from the agency on July 23 explained that the USDA found 1,008 pages of records responsive to the request, but 322 pages were withheld due to trade secrets, confidential financial information, and personal privacy concerns. The USDA sent TPAF the responsive records on July 28, heavily redacted and making liberal use of the stated exemptions.
However, enough information was available to glean the exorbitant costs of connecting Alaskans with fiber. In one project, Cordova received $34.91 million in grant funds from the USDA to connect just 28 Alaskans with broadband in Pelican and Hoonah. These municipalities in the southeastern part of the state are primarily fishing villages largely accessed by boat or floatplane. The USDA-funded project included 9 residences and 8 businesses. In terms of costs per customer, that comes out to a whopping $1.25 million.
Costs per passing look even worse: the government spent more than $2 million per home or business passed with fiber. As a reference point, costs-per-passing tend to average closer to $2,000 in urban locations and $5,000 to $10,000 in other rural areas.
The project costs include more than just last-mile connections, as Cordova was tasked in that project with building out middle-mile broadband infrastructure to surrounding rural communities, connecting them with nearby Juneau. All but four miles of the 571 miles of fiber under the project’s purview involve laying underwater cable.
The Taxpayers Protection Alliance has previously pointed out that middle-mile infrastructure is a form of “broadband to nowhere,” as it doesn’t itself connect customers and depends on future spending to make last-mile connections. KentuckyWired, the biggest broadband financial boondoggle in history, is one such project.
It should be noted that the Pelican and Hoonah project cost more than $34.91 million, with Cordova using an unknown amount in loan funds that is redacted in the files. Cordova’s matching funds and the total project costs are also redacted.
The immense cost for a handful of fiber connections is illustrative of the Biden administration’s missteps in highly prioritizing fiber over other more efficient methods of broadband deployment. Under the Trump administration, satellite internet and fixed wireless are being used in more places and the results are significant—the potential cost for broadband deployment in the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program has been more than halved by using alternative technologies.
Where fixed wireless isn’t practical in most of rugged and sparsely populated Alaska, satellite internet can be a major player in closing the digital divide. Alaska will be the most expensive state to connect under BEAD at a cost of more than $36,000 per passing. In making plans for nearly 45,000 connections in the state, the Alaska Broadband Office intends to fund 53 percent of projects via fiber, 33 percent via low-earth orbit satellite, and 13 percent via fixed wireless.
The incredible cost for some fiber projects shows that satellite should probably be considered more frequently as a practical savings for taxpayers. Moreover, broadband programs run by agencies such as the USDA ought to be more regularly audited. Hopefully, greater oversight and accountability won’t take another three years.
Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. This Expert Opinion is exclusive to Broadband Breakfast.
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