WASHINGTON, February 10, 2023 – By unjustifiably prioritizing fiber deployments, the Broadband Equity, Access and Deployment notice of funding opportunity unnecessarily increases the total cost of achieving broadband goals and delays its deployment across the country, claimed a report commissioned by the Wireless Internet Service Providers Association.
Congress delegated the implementation of the $42 billion BEAD program to the National Telecommunications and Information Administration under the Infrastructure Investment and Jobs Act of 2021. The Act, however, “does not require NTIA to prioritize BEAD funds for deployment of Fiber to the Premises projects,” read the report by Bill Lehr, a telecommunications economist and consultant.
The Administration has prioritized fiber regardless of Congressional direction, said Lehr, saying that the NTIA disregarded “sound economic and policy principles” in its notice of funding.
As framed, the BEAD notice establishes “priority” broadband projects as those that will “provision service via end-to-end fiber-optic facilities to each end-user premises.” States are directed to award BEAD funds to priority projects unless the cost exceeds the cost per location threshold or for other valid reasons approved by the NTIA.
Increase in cost
Not only are these rules “inconsistent with optimal planning for U.S. essential and critical digital infrastructure,” but they will “increase the total cost of achieving broadband universal service goals,” read the report.
According to Lehr, a “number of studies” point to fixed wireless alternatives that offer high-quality connection at a fraction of the cost of fiber optic. “This is ever truer given recent and continuing advances in next-generation fixed wireless technology,” read the report.
Furthermore, the notice directs states to overbuild in locations that already offer 25 Mbps download by 3 Mbps upload or better services. This, in combination with preferential subsidization of fiber projects, could “plausibly increase the costs of addressing U.S. broadband needs by tens of billions of dollars in lost benefits.”
Costs drastically increase in rural locations where deploying fiber is much more costly than fixed wireless alternatives, said Lehr. More competition in broadband is likely to reduce prices, which contributes to the realization of consumer surplus and economic growth, he continued.
Delay of deployment
By prioritizing fiber builds and excluding broadband technologies that use unlicensed spectrum, the NTIA forces a delay on connecting the unconnected, said the report, thus harming the consumers forced to wait as well as all U.S. citizens as the economic benefits of achieving universal broadband are delayed.
It takes time to build out wired infrastructure which requires a wired distribution plant at every potential broadband service location whereas wireless technology can be deployed more quickly and scale with the growth in subscriber base, thus reducing time and money required for deployment, said Lehr.
“Because the digital economy transformation is a continuing process, delaying U.S. progress poses compounding risks for sustaining U.S. global competitiveness,” read the report. A large share of U.S. economic growth and performance is attributed to the nation’s lead in adopting digital technologies, said Lehr.
The report urged the NTIA to eliminate the fiber-first bias in the BEAD notice of funding and include fixed wireless providers for consideration. Doing so, it claimed, would restore the technological neutrality principle intended by Congress, enable the forces of competition to determine the best strategies for providing broadband services in different locations, and reduce overall deployment costs and delays.
