Is the Digital Divide a Crisis in South Dakota or Not?

Nov 07, 2023

By Ted Hearn

The digital divide is widely viewed as a national crisis, preventing too many kids from doing their homework online and too many sick patients from seeing their doctors on an iPad. One federal program in the works has $42.45 billion set aside to ensure all Americans have a robust broadband Internet connection.

Yet, the sense of urgency conveyed by America’s leadership in Washington, D.C., about the homework gap and telehealth crises is not resulting in broadband deployment strategies designed to close the digital divide as quickly and economically as possible.

An example of this problem – which serves to extend the hardship of the broadband unserved – is occurring in South Dakota under the leadership of Republican Gov. Kristi Noem.

In a recent announcement, Noem’s Office of Economic Development effectively decreed that when it comes to state support, it is fiber or nothing. Fixed wireless access (FWA) providers like Verizon and T-Mobile and Elon Musk’s Starlink satellite service should not expect funding.

According to a report by Telecompetitor, “The state has made the policy decision to approve and fund future-proof fiber projects. . . Other technologies such as DSL copper, fixed wireless and satellite, while they have their place in the ecosystem, are considered temporary ‘stop gap’ or ‘the only option’ technologies.” 

Noem’s Office of Economic Development, which is administering the ConnectSD Broadband Development Program, disclosed its fiber-first approach in application materials for the funding program, Telecompetitor said.

Few will dispute fiber’s ‘gold standard’ status in ranking broadband infrastructure. It is said to be the technology to produce the highest symmetrical data speeds and to be the least expensive connection to maintain over the subsequent decade once installed.

But it is also inarguable that fiber is brutally expensive and can cost up to $15,000 a mile to deploy in a rural state like South Dakota. Importantly, it could take years to reach some of South Dakota’s 135,000 unserved because of punishing delays stemming from drawn-out set-tos with the corporate owners of conduits, railroad crossings and telephone poles to which fiber needs access.

The National Telecommunications and Information Administration (NTIA) has earmarked $207.2 million in Broadband Equity, Access, and Deployment (BEAD) Program funds to deliver broadband to South Dakota’s unserved. Will this be sufficient funding to cover the cost of South Dakota’s emphasis on fiber or should the state consider alternatives that are faster and more affordable to deploy?

What about FWA? Is it really a “stop gap” technology as claimed by South Dakota’s broadband officials? The facts seem to suggest otherwise.

Based on recent developments, would anyone quarrel with the notion that FWA – which is far less dependent on third-party infrastructure than fiber – has been the surprise breakout broadband access technology of post-pandemic America?

Last quarter, Verizon added 384,000 FWA customers while T-Mobile added 557,000 for a combined total of 6.8 million after just a few years in the market. T-Mobile’s FWA service can cost as little as $30 a month – the definition of affordable – and offer download speeds of up to 246 megabits per second with no data caps, hidden fees or contracts. For some reason, South Dakota does not want to embrace FWA’s success.

Gov. Noem’s broadband team was also oddly dismissive of Starlink, which from 340 miles in space provides robust Internet service in 60 countries on Earth, including Ukraine, whose military depends on Starlink in its war against Russia. Far from being a stop-gap form of broadband, Starlink has been called "the essential backbone of communication" on Ukrainian battlefields, according to Wikipedia.

While some will say Starlink is costly, it is also true that refurbished equipment can run as low as $250 per unit. Monthly fees can run as high as $120 a month for speeds between 25 and 220 mbps. But these dollars are small compared to the many billions it will cost nationally to equip homes with fiber. Knowing all of that, the Nebraska Farm Bureau is running a promotion that offers its 55,000 members the ability to sign up for Starlink and get the first two months for free.

So, it seems to boil down to this: Why isn’t a state like South Dakota using broadband dollars coming from Washington, D.C., and elsewhere to hire FedEx to ship Starlink kits to their most needy citizens and subsidzing monthly fees?

Literally, this approach could close the digital divide for thousands of rural Americans overnight. Why isn’t Gov. Noem’s broadband braintrust more alarmed that so many South Dakotans will lose valuable time waiting for their fiber to arrive?