Last Mile BEAD Builds Need More Exchange Points to be Effective: Experts

WASHINGTON, December 6, 2023 – Federally funded broadband infrastructure in rural areas could be less effective without more internet exchange points, experts said on Tuesday.

The Joe Biden administration’s $42.5 billion Broadband Equity, Access and Deployment program is targeted at bringing fiber-optic cable, the fastest, most future-proof technology available, to areas of the country without adequate internet access.

That program emphasizes “last mile” builds, connections to individual homes and businesses. But such connections, while necessary, are only part of the puzzle, said Tom Cox, vice president of state and government affairs at Connected Nation, a nonprofit that works with states to expand broadband access.

“If you don’t figure out a way to solve the transport issue, and if you don’t figure out a way to solve the latency issue, a lot of this BEAD money is going to be kind of all for naught,” he said at the Broadband Breakfast’s Digital Infrastructure Investment Summit.

The transport and latency issues Cox referred to are the high cost of data transfer and higher latency for networks that are physically farther from internet exchange points, or IXPs. Those are facilities where local internet providers exchange traffic and data with the broader internet.

“We’re already talking to providers in rural areas,” he said. “And once they built out to these places, they said ‘We can’t afford it… we are taking a loss because our transport costs are so high.’”

In the United States, IXPs are typically located in larger cities where demand for traffic is already high. That’s because American exchanges are typically for-profit, as opposed to the nonprofit exchanges found in Europe, said Ben Hedges, vice president of network strategy at IXP operator Cyxtera.

Scott Brown manages a data center in Richmond, Virginia. He said after he got connected to a closer IXP in the state, “our latency to most of our destinations, about 30 milliseconds, dropped down to 3 milliseconds.”

The difference was only a few thousandths of a second, but the faster data transfer amounted to a “massive difference in quality of internet,” he said. He also saw lower transport costs than before.

There have to be enough potential users present to attract enough content providers and carriers to set up infrastructure and make a potential exchange point profitable, panelists said. That’s not always an easy condition to meet in the rural areas that will need closer IXPs to get the most out of BEAD infrastructure.

“I think that’s going to be a challenge for us as we look at closing the digital divide,” said Ron da Silva, a telecommunications consultant with Network Technologies Global.

But the increased traffic from new fiber connections could also help make new markets for data centers and exchanges points, he noted.

“The two kind of grow up together,” added Peter Cohen, the principal program manager at Microsoft.