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Faster Speeds In Rural America: What Will It Cost?

July 17, 2017

Earlier this month, Bloomberg Politics reporters Mark Niquette  and Alan Bjerga examined the cost of expanding broadband service to rural areas of the United States. The two found the price tag would be about $80 billion and that “policy experts disagree about how best to expand rural broadband – and what responsibility government has to subsidize it.”

President Donald Trump, meanwhile, has proposed to spend around $25 billion over 10 years on rural broadband infrastructure. (According to the Bloomberg reporters, however, Agriculture Secretary Sonny Perdue said the Trump administration “hasn’t calculated how much it may invest in broadband.”) An important part of the president’s plan, of course, is whether the administration decides to work with the private sector, or to encourage local and state government to compete against it.

It’s not clear yet what path the White House is on. According to Bloomberg, “The administration will seek partnerships with state and local governments and the private sector … but it won’t be a one-size-fits-all plan.” Secretary Perdue said, “It’s a big price tag, but who shares what part of that will probably differ from place to place.”

Two scholars, Mark Jamison of the University of Florida’s Public Utility Research Center and Ryan Bourne of the Cato Institute in Washington, DC, argue that the administration should not provide “direct funding” for rural broadband.

Broadband access rates vary widely across rural America. For example, 85 percent of Nebraskans have access to broadband speeds that are 25 mbps or faster. Nearly two-thirds can enjoy speeds that are 100 mbps or faster. (Almost all Nebraskans, 97 percent, have access to some sort of wireline service.) But in the very rural western part of the state those rates are lower.

The administration must seek to boost access rates and speeds for rural America. As the Bloomberg Politics story notes, improving broadband is a significant priority for our nation’s farmers and ranchers. But, as this blog pointed out last month and as Lexington, Ky. has discovered, relying on municipal broadband networks will prove too costly for taxpayers. Federal lawmakers instead must work to break down barriers to private rural broadband investment.

Thankfully, as we noted in May, the Federal Communications Commission is focused on that task. Let’s hope that message reaches the White House.