No More Fiber to Nowhere

Closing the digital divide takes money, and the federal government has lots of it. But even the $45 billion poised for distribution under the Broadband Equity Access and Deployment (BEAD) program will fall short if the feds sink it into remote fiber optic cables rather than turning to technologies better suited to provide Internet to isolated areas. As the program’s currently structured, it will give special treatment to projects that promise “end-to-end fiber.” This fiber obsession is a waste of money that will leave more pressing broadband priorities underfunded.

Fiber broadband has undeniable advantages in densely populated areas where high traffic volume and a large number of customers can spread out the immense cost. But for the most rural areas of the country, the prioritization of fiber to the home above all else is foolish since cheaper wireless options can deliver a similar user experience.

While satellite broadband has existed for a while now, it’s on the verge of getting drastically better. Traditional satellite connections are plagued by high latency as signals must travel 22,000 miles to reach the satellite. Low-earth-orbit (LEO) satellite constellations, operating at just 350 miles away, dramatically reduce that lag. In essence, LEO broadband will be able to offer speeds and latency comparable to traditional wireline broadband without the immense costs of laying fiber to every building it serves. At the same time, the advent of in-home 5G and other fixed-wireless offerings cuts down on costs by running fiber only to a tower that can then beam data to a wide area, avoiding the costs of running fiber to every building.

Despite these available technologies, the federal government’s funding guidelines are infatuated with fiber deployments despite their patently wasteful results for far-flung places. The Department of Commerce recently touted a grant of $30,000 per household for fiber-to-the-home deployment. Not to be outdone, the Department of Agriculture, for example, recently paid over $33 million to build fiber connections to 211 people in Alaska, a cost of nearly $400,000 per household. And that doesn’t count the cost of the monthly service itself. For the same price, we could have given the same people an LEO connection, paid the monthly bill for their entire lives, and still had enough left over to give each household $300,000 in cash. When policymakers favor such fiber boondoggles over innovative technologies that are many times cheaper, something has gone wrong with our funding priorities.

BEAD is a great opportunity to end the availability portion of the digital divide, but we now have technologies that can do that without an exorbitant price tag. Therefore, BEAD money should not go to serving an area with fiber when doing so would cost more than around $5,000 per household. Such areas should not be left behind but should instead seek fixed wireless or satellite service that can serve their needs in a more cost-effective way.

Wasting taxpayer money is bad enough, but the fiber distortion also deprives more pressing broadband policy issues of the funding they need. Today, the main barriers to universal connectivity are not infrastructure deployment. Instead, they are a lack of adoption in places where broadband is already deployed. While recent funding can be spent on efforts to increase adoption, there won’t be much left if it’s been squandered on needlessly expensive infrastructure deployments. Every dollar sunk into building fiber to a location that could be better served by satellites is a dollar taken away from educating users on the benefits of being connected or funding device purchases so that individuals don’t have to depend solely on a smartphone.

If the special treatment for fiber continues, so will the absurdly wasteful results. Policymakers who want to close the digital divide should stop treating every connectivity problem as a nail to be met with the hammer of fiber deployment, whatever the cost. More sensible options exist for connecting remote, sparsely populated areas, and the more pressing hurdles to universal connectivity will be neglected if sky-high deployment costs become the norm.