Mon. Oct 2nd, 2023
Connecting Every Home in America: The Challenge of Closing the Digital Divide

Connecting every home in America is a shared goal, but the financial feasibility of achieving it is a pressing issue. The cost of running fiber optic cable lines to rural areas is a significant hurdle. According to The Wall Street Journal, the average cost per household in rural Nebraska is estimated at $53,000, which surpasses the property value of some homes. In remote areas like Montana, the cost rises to an estimated $300,000 per connection in mountainous regions.

These numbers highlight the challenges of closing the digital divide and the skyrocketing costs of installing fiber optic, the most reliable form of broadband. Consequently, there is a debate over whether this money could be better utilized elsewhere. The finite nature of financial resources adds complexity to the equation. Blair Levin, an equity analyst for New Street Research and former employee of the Federal Communications Commission, emphasizes the need to consider alternative uses of the funds. For instance, could the same amount of money be spent to connect more families instead of one remote location?

The cost of connections varies, making it difficult to install fiber optic lines over vast distances in rural areas. The extensive cable infrastructure required drives up costs and depletes grant funds allotted to each state. Expensive rural projects can quickly exhaust infrastructure budgets, resulting in fewer households being connected.

To address this issue, the U.S. government has allocated over $60 billion to the Internet for All program, aimed at providing internet access nationwide, particularly in rural areas. The government views fiber optic as a long-term investment superior to satellite internet options like Starlink, which is already available in most states. However, the expensive equipment associated with fiber optic installation makes it unaffordable for many residents, and reliability can be a concern.

A specific case study by The Wall Street Journal explores the residents of Nebraska’s Winnebago Tribe, who received a $35.2 million high-speed internet upgrade through a federal initiative. The funding from the Commerce Department’s Tribal Broadband Connectivity Program intended to establish a 235-mile fiber optic infrastructure for enhanced internet speeds. However, the costs involved appear to outweigh the value of the homes, generating concerns.

The Tribal Broadband Connectivity Program estimated an average cost of $13,300 per location in Nebraska, which significantly differs from the current $53,000 quote. This estimate includes residential properties, businesses, schools, and hospitals within the tribe. In comparison, the Treasury Department and Federal Communications Commission suggest an average cost ranging from $1,750 to $3,300 per connection.

Equally, abandoning the buildout is not a viable option since reliable internet access is crucial for all communities. Sunshine Thomas-Bear, Winnebago’s historic preservation officer, emphasizes the tribe’s reliance on internet services.