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$100 billion in U.S. broadband investment won’t be enough to close the digital divide in rural areas, industry leaders warn on a webinar
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Limited middle mile services drive up connectivity costs, said Centranet’s Sachin Gupta
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Lumen is looking to leverage its existing middle mile infrastructure to ease a lack of funding
Some $100 billion in U.S. broadband investment will be spent in rural areas before the end of the decade to close the digital divide. Yet industry leaders warn that a middle mile gap will remain if we aren’t careful.
The National Telecommunication and Information Administration’s (NTIA) Middle Mile Program has made 39 awards amounting to around $980 million since it was announced in summer 2023. The total project costs were almost twice that, at about $1.8 billion.
But industry leaders have long cautioned that the program likely isn’t enough on its own.
“You can see a lot of the companies that applied for [the Middle Mile Program] had large match percentages,” said Sachin Gupta, director of Government Business and Economic Development at Centranet, and member of the Federal Communications Commission (FCC) Technological Advisory Council.
“But the total amount that was requested was upwards of $7 billion, showing how much middle mile is needed in America. Especially in rural America, there is serious lack of middle mile.”
If the middle mile goes ignored, the industry won’t be able to connect “all of the new last mile connections that we are planning on building in the coming four years,” Gupta said during a Fiber Broadband Association (FBA) webinar.
Building last fiber mile networks and leaving rural markets lacking the middle mile is akin to having beautiful roads in your rural town without any real connection to the highway, he added. “We will still have a digital divide of capacity in these areas.”
Rural affordability
As the Affordable Connectivity Program (ACP) remains without funding, Gupta noted middle mile infrastructure is part of the whole affordability picture.
In urban areas with dense infrastructure, there are lower maintenance costs and multiple competitors offering bandwidth and middle mile services, which keeps prices down for consumers. Conversely, in rural areas with sparse infrastructure, higher maintenance costs and limited middle mile options lead to higher expenses for network operators.
“You end up paying an arm and a leg and a kidney and the liver to be able to access that middle mile,” Gupta said.
Those costs are ultimately passed on to subscribers, widening the affordability gap between rural and urban areas.
Last week, at the U.S. Congressional Communications and Technology Subcommittee Field Hearing on the state of rural broadband, farming representatives joined rural internet service providers in highlighting the importance of bringing connectivity to rural communities and agriculture.
Don Cameron, General Manager at Terranova Ranch in California told the Committee he was approached five years ago by AT&T for fiber installation, but was put off by the initial $875,000 quote, which later ballooned to $1.5 million.
Left with slow and pricey alternatives like 5 Mbps speeds for $130/month, Cameron said the business struggled to keep up with online needs, even resorting to a second service for $228/month just to access the internet.
Ironically, Terranova has a fiber line running less than a mile away, Cameron said. “But it is a long haul fiber and no one is able to tap into it,” he added. “Definitely frustrating.”
In some cases, funding is shrinking
Despite massive broadband investment across the country, a few state broadband offices have said funding won’t be enough. In some cases, broadband funding is shrinking (for example, California Gov. Gavin Newsom on Friday proposed a $2 billion budget cut from broadband projects).
The $42.5 billion Broadband Equity Access and Deployment (BEAD) grant program will be largely focused on rural connectivity, and allegedly, will be seen in action later this year in some states. The Biden-Harris Administration recently approved three more BEAD Initial Proposals: District of Columbia, Delaware and Washington, making a total of seven states that can now move their BEAD programs forward.
But out of its giant pot, the BEAD program only allocates $1 billion to middle mile broadband deployment.
“One of the major issues that are out there is lack of funding,” said Jordan Gross, Lumen’s Director of State and Government Affairs, during the FBA webinar.
Lumen, with 400,000 route miles of middle mile fiber network is aiming to address that gap by “making sure that what is in the ground is being utilized,” Gross said.
The company sees “the massive opportunity as it relates to BEAD,” and enabling the program’s recipients to carry out their projects with fiber already in place.
“Tapping into existing infrastructure and being able to build into these communities off that existing infrastructure [saves] time and money by utilizing already deployed assets,” Gross added.
Gross is part of the FBA’s Middle Mile Working Group established this month (and chaired by Gupta). He said the group will be a good channel to identify what existing middle mile infrastructure there is to work with in these cases, and what needs to be built.
“That is a task that we have in front of us, to create a map, which is a behemoth of a task. It’s not an easy task to come up with all of the middle mile infrastructure that exists in the US today. There is no such map,” Gross concluded.
