To Speed Buildout of Rural Broadband, Tech-Policy Think Tank Says Any Federal Infrastructure Plan Should Focus First on Unserved Areas and Rely on Proven Means Such as Reverse Auctions

WASHINGTON—Supporting the deployment of broadband in high-cost rural areas should be a significant component of any infrastructure plan, says the Information Technology and Innovation Foundation (ITIF). In a new report out today, the leading tech-policy think tank argues new broadband infrastructure support should rely on proven mechanisms such as reverse auctions and avoid pouring more resources into inefficient programs like the Department of Agriculture’s Rural Utilities Service.

“Broadband access is essential for participating in the 21st century economy,” said Doug Brake, ITIF’s senior telecom policy analyst and the report’s author. “The U.S. private-investment broadband model has been successful in getting Internet access to the vast majority of households in the United States. But there are persistent economic challenges that make reaching rural, high-cost areas much harder. Policymakers should carefully design an infrastructure package to accelerate rural broadband that heeds lessons learned from past programs and avoids rewarding initiatives with poor track records.”

The report outlines three major federal programs designed to address rural broadband infrastructure and details what did and didn’t work as a guide for policymakers of where to focus their efforts going forward.

Brake says the Federal Communication Commission’s Connect America Fund (CAF) is the most well thought-out of the programs. Policymakers should look to its reverse-auction mechanism as a model for allocating funds for 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 to be achieved through this mechanism.

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 what not to do to advance rural broadband. RUS has faced accountability challenges, says Brake, and many of the networks benefiting from its guaranteed loans ultimately creep into low-cost areas that are already competitively served. It would be a mistake to expand on this program as part of the infrastructure bill absent real reform.

The report also urges federal policymakers to use financial support to entice 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.

Brake emphasized the importance of focusing 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 focus first on those populations without any connection at all.

Overall, the report concludes that any rural infrastructure support program should include both general tax incentives and targeted financial support and should abide by several high-level principles:

• Support should focus on those truly 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 turning to upgraded speeds of existing slower networks.
• Support should be made available for both fixed and mobile broadband, with fixed on a technologically neutral basis and mobile focused on LTE coverage.
• Performance targets should be reasonably tied to anticipated application demand and cost expectations, not “future-proofing.”
• Ideally, support should only fund the up-front capital expenditure, and not reward slow, piecemeal upgrades through ongoing support.

“Expanding the geographic footprint of U.S. digital infrastructure should be a significant part of any infrastructure plan so that we can finally reach the goal of access to modern communications at a reasonable price for all U.S. residents,” concluded Brake.

Read summary.

Read report.