A Policymaker’s Guide to Rural Broadband Infrastructure

The U.S. private-investment broadband model is a success story in its providing high-performance Internet access to the majority of households in the United States. But widely dispersed populations in rural areas are simply not possible to serve profitably, justifying government programs to ensure robust communications services for as many U.S. residents as possible.

Broadband support should be included in any legislative package to update U.S. infrastructure, and should be guided by several key principles:

• Encouraging broadband infrastructure upgrades should rely on multiple tools, including both general tax incentives and targeted financial support. Subsidies should be aimed to achieve specific, reasonable performance targets and be held accountable.
• Financial support should focus on the incremental next-most costly unserved areas that remain unconnected to a fixed terrestrial network until costs grow unreasonable, at which point satellite solutions should be on the table.
• Support should first supply a single network for unserved populations before attempting to upgrade performance of existing slower networks.
• Support should be made available for both fixed and mobile broadband, with fixed support offered on a technologically neutral basis and mobile support focused on expanding LTE coverage.
• Performance targets should be reasonably tied to anticipated application demand and cost expectations, not specific, supposedly “future-proof” technologies.
• Ideally, a broadband acceleration program would only fund up-front capital expenditure, and not reward slow, piecemeal upgrades through ongoing support.

Past and current federal programs designed to address rural broadband infrastructure should help guide similar efforts going forward. The Federal Communication Commission’s Connect America Fund (CAF) is the most well thought-out of these programs. In particular, policymakers should look to its reverse-auction mechanism as a model for allocating funds in a potential a one-off acceleration of rural broadband. An infrastructure bill could simultaneously put CAF funding on surer footing and define cost-effective goals for rural broadband improvements.

On the other end of the spectrum, various grant and loan programs under the Department of Agriculture’s Rural Utilities Service (RUS) provide an example of how not to advance rural broadband. RUS has faced accountability challenges, and many of the networks benefiting from its guaranteed loans ultimately creep into low-cost areas that are already served competitively. It would be a mistake to expand on this program as part of an infrastructure bill.

Federal financial support also should be used to encourage local jurisdictions to take additional steps to remove barriers to deployment. Local and state governments should streamline access to public rights of way and utility poles, adopt “dig-once” policies, and ensure fees are based on cost and are competitively neutral.

Most of all, it is important for broadband infrastructure spending to focus first on areas that are legitimately unserved rather than propping up duplicative, smaller networks or increasing available speeds beyond what is reasonably needed. If policymakers want to have the largest impact when subsidizing infrastructure investment, they should prioritize bringing online those populations without any available connection at all.