Is Fiber Sane Policy with Starlink In the Sky?

Oct 21, 2023

By Ted Hearn, Editor, Policyband

Story after story on how best to reach every American with broadband will pose a simple question: Is there enough money in the $42.45 billion federal Broadband Equity, Access, and Deployment (BEAD) program kitty to get the job done? Some states are concerned that in the end they will need more money … a lot more money.

Tension over this issue is strong, as debate over the proper allocation of broadband subsidies has seemingly created a new “third rail” political issue that grabs the attention of a large segment of the voting public. That’s likely because people see the BEAD Program administered by the Commerce Department’s National Telecommunications and Information Administration (NTIA) as a once-in-a-lifetime opportunity that can’t be wasted.

At the heart of the debate is whether broadband access technologies other than expensive fiber optic networks — which are considered the gold standard by some — should receive substantial taxpayer support to stretch BEAD dollars to the maximum extent possible. These technologies include service from fixed wireless providers (licensed and unlicensed), low-earth orbit satellites, and traditional DOCSIS-based cable systems.

NTIA has earmarked $1.2 billion in BEAD money for Washington state, about 5,000 per unserved location. An Oct. 1 article in the Spokane Spokesman-Review noted the state’s fiber-fueled funding crunch potentially on the horizon. The article mentioned that after totaling all the taxpayer dollars (state and federal) aimed at closing the Evergreen State’s digital divide, “the Washington State Broadband Office estimates it will cost at least another $2.02 billion to serve every remaining location with fiber. Even with BEAD’s 25% match requirement, there is still a gap of nearly $500 million.” The article did not suggest how best to close the funding deficit.

According to the Spokesman-Review, Washington state has 236,000 households considered unserved, either because of no service at a location or because throughput speeds fail to meet the 25/3 megabits per second (mbps) federal threshold for definitionally acceptable broadband. (Oddly, stories like the Spokesman-Review’s tend not to explain how to count properly someone “unserved” when Starlink’s LEO satellite broadband service is now available to the entire U.S. at download speeds of 67 mbps. More on that in a bit.)

The key question for Washington state regulators who oversee BEAD project money is whether they feel obligated to provide all considered unserved with fiber connectivity — widely considered the most expensive technology to deploy in rural America — on the faulty premise that if it isn’t fiber, it isn’t broadband.

Just on cost alone, the case for universal fiber deployment is suspect. According to the Wall Street Journal, some federally funded fiber projects have average per-location costs ranging from $1,753 to $13,335. The paper identified fiber projects in Nebraska and Montana that have per-location costs of $53,000 and $300,000, respectively. Since passage of BEAD in 2021, high planning and deployment costs have been exacerbated by rising inflation, higher borrowing costs, supply chain delays, and bidders defaulting on their commitments to build.

Coincidentally, the Spokesman-Review happens to be a major district-based newspaper of House Energy and Commerce Committee Chair, U.S. Rep. Cathy McMorris Rodgers. She serves Washington state’s 5th District — a massive region twice the size of Massachusetts located east of the Cascade Range, with Canada bordering on the north and Oregon on the south. Needless to say, Rep. McMorris Rodgers, a Washington state native who grew up working on her family’s fruit orchard, has many rural constituents who want better broadband.

Still, McMorris Rodgers is concerned that BEAD will run out of money when it shouldn’t and will fail to achieve the goal of universal broadband access if less expensive substitutes for fiber are rejected. She has cited Ohio and Vermont as two states that will consider locations served by fixed wireless technology as unserved.

“Congress provided a record amount of funding for the BEAD program, so it is frustrating to hear states claim that this is not enough money or try to exclude certain technologies that will help them achieve universal connectivity,” Rep. McMorris Rodgers said in an Oct. 3 letter to Assistant Commerce Secretary Alan Davidson, who heads NTIA.

The letter concluded by requesting a promise from NTIA that it will not approve a state broadband plan “that does not achieve universal connectivity using its BEAD allocation …”

Is McMorris Rodgers’ request too much to ask? Clearly, closing the digital divide at a huge discount to the cost of fiber deployment is an option available to Washington state planners.

For example, a Starlink dish and associated equipment cost $600, meaning the price tag to connect all 236,000 unserved Washington state homes to the satellite service would be $141.6 million. That would potentially free up hundreds of millions of BEAD dollars to keep the Starlink service affordable for those in need and attain other social goals abetted by ubiquitous broadband.

The private sector is embracing Starlink while government is focused elsewhere.

The Nebraska Farm Bureau, with 55,000 member families, recently began a partnership program with Starlink that calls for providing NEFB’s farmers and ranchers free Starlink for the first two months. “Starlink’s model of providing quality broadband in Nebraska is revolutionary. Working with Starlink will help ensure quality Internet service is delivered to all areas of the state,” NEFB President Mark McHargue said.

It’s almost embarrassing to point out that there are many fortunate people who fly commercial airlines, who have their own yachts and who enjoy ocean cruises who have better broadband with Starlink than more than a quarter million Washington state residents on the wrong side of the digital divide.

Fiber — fantastic to have but expensive to deliver — does not have to be the only answer. It’s clear that Rep. McMorris Rodgers agrees and is concerned that a BEAD program divorced from sane fiscal safeguards might create a budget-busting fiber fiasco.

Ted Hearn is Editor of Policyband