Little Progress: Why America's Broadband Initiative Is Destined To Fail


In the January 2016 FCC Broadband Progress Report, the Federal Communications Commission continues to offer troubling news regarding America’s efforts to close the digital divide:

  • 34 million Americans still lack access to today’s broadband benchmark speeds of 25 Mbps down and 3 Mbps up.

  • Approximately 40 percent of people in rural areas and tribal lands are without access to benchmark service.

  • 41 percent of schools have not yet met the FCC’s short-term goals for connectivity capable of supporting digital learning applications.

For these reasons, FCC “concludes that broadband is not being deployed to all Americans in a reasonable and timely fashion.”

The report also speaks to a “persistent urban/rural disparity” despite the recent “rural broadband experiments grant” program, which was closed out last year. In that program, the Connect America Fund, service providers offering any type of broadband technology were allowed to compete for a small slice of awards. So, what is going wrong?

Unfortunately, most of the money being thrown at broadband deployment by the federal government is for fiber deployed through telephone companies — specifically the largest ones.

These are the same companies whose practices in the E-Rate program led to new Internet pricing transparency rules for services to America’s schools and libraries.

But, what if there were a different way to reach the unserved and rural populations with high speed broadband at a cost that did not need federal subsidies?

A spectrum auction – the White Spaces Incentive Auction – is slated to take place in March of this year.

The FCC is nudging broadcasters to surrender underused spectrum that can be auctioned off to other companies that can deploy wireless broadband where needed. The big players are eyeing the spectrum, and arguing over the auction, its rules and how the spectrum will be divvied up.

So, what will become of this spectrum? Over the past few years the FCC has granted “experimental” licenses to companies that wanted to test new and unique ways of delivering services.

Google and Microsoft have done trials. But, nobody seems to be able to crack the problem. Current demand for the spectrum is for low range modest throughput applications, such as “Wi-Fi on steroids.” But, as we saw, even with Wi-Fi, throughputs became greater over time.

Wireless carriers want to add LTE installations on the spectrum, but the typical LTE site only delivers throughput at around 8 – 12 miles from the tower, which leaves the cost of deploying infrastructure prohibitive in remote and rural areas.

As long as the FCC’s emphasis is on fiber, rather than technology-agnostic options, America’s rural broadband problem will remain a big problem.

Meanwhile, millions of Americans will be left without access to educational and healthcare resources, social services, and all that urban residents take for granted as part of their daily lives, which only robust broadband is able to supply. |||||

Liz Zucco is the founder and President of MarketSys USA, Inc., which specializes in funding strategies for capital-intensive rural enterprises, from schools and libraries to broadband buildouts. Liz Zucco is a member of the Transmit Network. Contact Ms. Zucco.

#Finance