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Broadband Deployment

Written by Dr. Jenny Bratburd and Dr. Tomy Granzier-Nakajima
Published on January 28, 2022
Research Highlights

In order to overcome financial and technological barriers to deploying broadband, many states and localities have developed strategies to increase access and adoption of broadband, including community planning processes, grants and other financial incentives, and regulatory changes. 

Highlights

  • Hardware costs and lack of access to financing have been identified as the main barriers to broadband development projects.
  • Rural and low-income households are less likely than urban or high-income households to have reliable access to broadband in Missouri.
  • Engaging local communities in planning can identify broadband needs and assets.
  • States can incentivize broadband deployment with grants, tax incentives, and removal ofpotential legal obstacles.

Executive Summary

Broadband, typically referring to high speed internet, is linked to many economic benefits, including attracting business, increasing incomes, and expanding opportunities for education and telemedicine. In Missouri, approximately 15% of households lack broadband connections.1 In order to overcome financial and technological barriers to deploying broadband, many states and localities have developed strategies to increase access and adoption of broadband, including community planning processes, grants and other financial incentives, and regulatory changes.

Limitations

  • Implementation success varies depending on local factors such as geography, financial resources, and population density.
  • Research is limited on the degree to which grants and other efforts increase broadband accessibility and adoption.

Research Background Broadband and Community Impact

Broadband is currently defined by the Federal Communications Commission (FCC) as internet speeds of 25 megabits per second (Mbps) download and 3 Mbps upload (25/3), an increase from the previous 10/1 definition. Some states have chosen to define broadband using higher speeds as future needs, especially industrial and agricultural usages may require faster speeds, and speed alone does not account for service fluctuations. Broadband adoption has been linked to increased incomes and increased attraction for new businesses, particularly for rural communities, as well as potential benefits with remote education, telemedicine, and precision agriculture.2-5

Broadband availability alone does not guarantee adoption (subscription) and ensuing benefits, especially when high costs and/or technological barriers limit adoption, resulting in a gap between those with and without broadband internet access and contributing to what is referred to as the “digital divide”. According to the 2019 American Communities Survey, 15% of Missouri households lack broadband subscriptions. For households with incomes less than $20,000, this rises to 37%.1 According to the FCC’s 2020 report, approximately 30% of rural Missourians lack access to fixed (non cellular) broadband.6 However, the FCC considers a census block to be served if a provider reports that it provides service to at least one location in the block. Therefore, this number is likely an underestimate (see our Science Note on Broadband Availability Mapping).7 Urban areas are also affected, such as when private companies choose not to undergo broadband improvements, like fiber, in low-income neighborhoods, resulting in “digital redlining”.8,9

Incentives and Barriers to Broadband Deployment

Funding

Hardware costs and lack of access to financing have been identified as the main barriers to broadband development projects, particularly in rural, sparsely populated, and/or low income communities where private providers may find return on investment to be too low.10,11 According to one study, the presence of state-level funding programs is linked to a 1-2% increase in general broadband availability.12 Some states have a specific fund for broadband, while others leverage funds for general infrastructure improvement, fees on internet service providers (ISPs - Illinois), toll revenue (Indiana), or legal settlements (Virginia).13 In 2020, HB 1768 extended Missouri’s Broadband Grant Program to 2027 with bipartisan support.14 In some states, state funding can also help localities obtain federal funds, such as West Virginia’s Community Development Block Grant which funds general infrastructure and helps communities apply for the US Department of Agriculture’s (USDA) ReConnect program; however, Missouri statute 620.2456 limits project areas receiving federal support from programs which don’t require state grants to be used for matching funds.

The federal Infrastructure Investment and Jobs Act, signed into law in 2021, contains $65 billion to help expand broadband access across the United States.15 The broadband equity, access, and deployment program of this act appropriates $42.45 billion for states, territories, and D.C. for broadband deployment, mapping, and adoption projects. Each state will receive an initial $100 million to aid with broadband deployment, and additional funds will be distributed based on unserved and high-cost locations. An additional $1 billion of infrastructure spending has been established to create a grant program to develop middle mile infrastructure. These grants will be open to a wide variety of entities including states, political subdivisions of a state, technology companies, utility companies and cooperatives, and nonprofit organizations.page2image399186208 page2image399186512 page2image399186816

Community Planning

Community engagement can identify local internet needs, scope of projects, and potential assets and hurdles.16 Projects may vary based on technology needs. These may include faster speeds for industrial and precision agricultural applications; extent of last mile (local) or middle mile (linking last mile with the network core) build out required; terrain, a case study of Bollinger County points out that hills limit effectiveness of reliable wireless technology;17 and digital literacy. Communities may also want to project long-term needs as technology advances. Needs can be determined at a state-wide level, for example with Virginia’s complaint-based tracking or Georgia’s data-driven comprehensive broadband access map. Likewise, states may consider broad investments in infrastructure. For instance, Kentucky’s large public-private partnership built a state-wide fiber network focused on middle mile infrastructure but faced criticism after delays as the state assumed the risk in a project that exceeded its budget and faced delays and unclear impacts for last-mile service.18

States can encourage local communities to develop plans for broadband with certifications or as requirements for grant applications, such as the “Broadband Ready” designation for communities in Georgia or with resources for developing plans, like Virginia’s “Broadband toolkit” to help assess local assets and guide planning. In Missouri, HB 1768, signed into law in July 2020, creates Community Improvement Districts and Neighborhood Improvement Districts that allow for special taxing within the district to pay for broadband deployment. In the 2022 regular legislative session in Missouri, HB 2052, would create a broadband task force which would make recommendations on how to best increase broadband internet deployment.

Regulations

Broadband deployment may be limited by legal barriers. One study identified that restrictions against municipalities and cooperatives tend to decrease broadband availability statewide by 3%.12 The same study found that the presence of a state-level funding program is expected to increase broadband availability by about 2%. These effects are also expected to be additive, in that a removal of restrictions and state funding together would be expected to increase broadband availability by 5%.

In Missouri, electrical cooperatives are able to act as ISPs (Mo. 394.085), but local governments may be limited in their ability to own a broadband system depending on their interpretation of Mo. 392.410.7.17 Other potential obstacles include legal right of way laws. For example, many electrical companies already use fiber lines for internal purposes, which could be used to provide broadband. A Missouri court case ruled that a separate agreement would be required even for fiber that is already in place, potentially slowing broadband deployment.19

References

  1. American Community Survey. Types of Computers and Internet Subscriptions. https://data.census.gov/cedsci/tableq=internet%20access&g=0400000US29&tid=ACSST1Y2019 .S2801(2019)
  1. Wilcock, A. D. et al. Association Between Broadband Internet Availability and Telemedicine Use. JAMA Intern. Med. (2019) doi:10.1001/jamainternmed.2019.2234.
  2. Kim, Y. & Orazem, P. F. Broadband Internet and New Firm Location Decisions in Rural Areas. Am. J. Agric. Econ. 99, 285–302 (2017).
  3. Schimmelpfennig, D. Farm Profits and Adoption of Precision Agriculture. Econ. Res. Serv. U. S. Dep. Agric. 46 (2016).
  4. Gallardo, R. & Whitacre, B. 21st century economic development: Telework and its impact on local income. Reg. Sci. Policy Pract. 10, 103–123 (2018)
  5. Federal Communications Commission 2020 Broadband Deployment Report. https://docs.fcc.gov/public/attachments/FCC-20-50A2.pdf (2020)
  6. U.S. Government Accountability Office. (2021). (rep.). Broadband: FCC is Taking Steps to Accurately Map Locations That Lack Access. Retrieved January 25, 2022, from https://www.gao.gov/products/gao-21-104447.
  7. Callahan, B. AT&T’s Digital Redlining Of Cleveland. National Digital Inclusion Alliance https://www.digitalinclusion.org/blog/2017/03/10/atts-digital-redlining-of-cleveland/ (2017).
  8. Callahan, B. AT&T’s Digital Redlining of Dallas: New Research by Dr. Brian Whitacre. National Digital Inclusion Alliance https://www.digitalinclusion.org/blog/2019/08/06/atts-digital-redlining-of-dallas-new-researc h-by-drbrian-whitacre/ (2019).
  9. Feld, H. Solving the Rural Broadband Equation at the Local Level. State Local Gov. Rev. 51, 242–249 (2019).
  10. Javier Valentín-Sívico, Casey Canfield & Ona Egbue. Rural Access to Industry 4.0: Barriers from the Infrastructure Planning Front Lines. Proceedings of the 2020 IISE Annual Conference.
  11. Whitacre, B. & Gallardo, R. State broadband policy: Impacts on availability. Telecommun. Policy 44, 102025 (2020).
  12. HowStatesSupportBroadbandProjects.PEWhttps://pew.org/2Kaf1fQ(2019).
  13. Bill Information for HB1768. Missouri House of Representatives. (n.d.). Retrieved January 28,2022, from https://house.mo.gov/Bill.aspx?bill=HB1768&year=2020&code=R
  14. National Telecommunications and Information Administration. (n.d.). Grants overview. BroadbandUSA. Retrieved January 25, 2022, from https://broadbandusa.ntia.doc.gov/resources/grant-programs
  15. HowStatesAreExpandingBroadbandAccess.PEWhttps://pew.org/2HIJGAb(2020).
  16. Sarah Denkler et al. Bringing Broadband to a Missouri Community. 107 (2020).
  17. Jacob Mulliken. Kentucky Officials Want Answers on Internet Initiative. https://www.govtech.com/network/Kentucky-Officials-Want-Answers-on-Internet-Initiative.ht ml (2019).
  18. Neuman, M. Exceeding the Scope of an Easement: “Expanded Use” Within a Single Cable. Mo. Law Rev. 83, 27 (2018).
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