- BEAD money will likely short of connecting all U.S. citizens to fiber broadband
- It’s also not enough to provide speeds beyond 100/20 Mbps, said Connect Humanity’s Brian Vo
- The federal government has already poured lots of money toward tackling the digital divide, and we haven’t got there yet
BEAD money may be enough to connect most folks to 100/20 Mbps, but those speeds likely won’t cut it by the end of the decade, said Connect Humanity’s Brian Vo.
We’ve heard from the White House that the Broadband Equity, Access and Deployment (BEAD) program will help connect everyone in the country to reliable and affordable high-speed internet by 2030. The task is nothing if not ambitious, but the big question is whether the allotted $42.5 billion can get us there.
If this is a once-in-a-generation funding opportunity to connect people with “technologies that will last a generation, then unlikely,” argued Brian Vo, chief investment officer at non-profit Connect Humanity.
The overall capital required to provide gigabit fiber-to-the-home to every citizen falls somewhere between $120-$200 billion, he told Fierce, referencing metrics from Cartesian.
“BEAD, if you include the capital match of 25% [that] gets you in the $50 to $60 billion range, so there’s already a capital gap there,” he said.
If $60 billion is enough, the assumption is that the goal is to provide speeds of 100/20 Mbps and that this target is “sufficient.”
“If our aspiration is to connect folks with technology that is good enough for what’s needed bandwidth capacity in 2024, yeah 100/20 will do just fine,” Vo said.
“If we’re planning ahead for 2034, ’44, ’54, 100/20 is going to likely be stale by the end of this decade.”
Bandwidth consumption has been on the rise for past 15 years, he noted, and likely won’t go down anytime soon, especially “with the advent of AI and other data intensive tools.”
Money down the drain
It’s not like BEAD is the first time the federal government’s tried tackling the broadband connectivity gap.
The assumption that “all previous federal programs are perfectly spent” just isn’t the case. Programs like the Rural Digital Opportunity Fund (RDOF) have seen many ISPs have either default on their obligations or fail to make much progress on deployments.
“Over the last 15-odd years the government spent anywhere from $50 to $75 billion on broadband infrastructure and we still have the magnitude of the digital divide,” Vo said.
Considering that historical data, “BEAD similarly will be unlikely to cover everybody intended.”
The National Telecommunications and Information Administration (NTIA) this week came out with a report analyzing broadband funding data from 13 agencies across 70 programs, providing a snapshot of how much money has flowed into the federal pot.
Appropriated funds for broadband skyrocketed from $1.7 billion in fiscal year 2020 to $64.3 billion in 2022 – no surprise there due to the passage of the Infrastructure Investment and Jobs Act (which included BEAD) in 2021.
The report also broke down broadband funds awarded by purpose in 2022. Investments in digital inclusion or adoption made up more than half of that funding ($11.8 billion), followed by infrastructure deployment investments ($11.4 billion). Money awarded for planning, data and mapping made up just 0.3% ($60 million) of broadband obligations.
Should internet be a commodity?
Only time will tell if BEAD can actually deliver internet to everybody who needs it. But it’s also important to think about “the relationship we want to have with broadband infrastructure,” said Vo.
Is the internet a value-add service where if you have the money, you can pay for it, or is it a utility like water or electricity? “If you believe it’s the latter, then we should be treating it as such,” he said.
“The two paths for me would be either regulated public or private utility or something more like an open access model, where there’s no difference besides service between getting 100 symmetrical from one [ISP] versus 100 symmetrical from another,” Vo concluded.
