Middle Mile Broadband Investments Probably Enhance the Ability to Cost-effectively Bring High-Speed Digital Services to Millions of Rural Americans
Shared infrastructure costs provide economic incentives for new and non-traditional market entrants to affordably connect the underserved
By Nick Costas, NT Fiber, Dallas
A recent op-ed in the Dallas Morning News by Tom Giovanetti of the Institute for Policy Innovation in this space broadly mischaracterized the purpose and outcomes of federally funded, state-run “middle mile” broadband infrastructure projects and warrants a direct response. Especially in states like Texas with a high percentage of underserved residents and robust middle-mile plans taking shape, we can ill afford to let narrow partisan agendas impede ongoing grass-roots success.
There’s no argument that rural and low-income areas across the US need more broadband access. A major reason is the high cost to deliver broadband services to these areas often remote areas. Currently about 35% of Americans have only one broadband provider in their area, and almost 10% have zero broadband options.
Among the most widely proven and successful solutions to this problem is the regional-, state- and/or local-level coordination of open-access middle-mile broadband infrastructure. Middle-mile infrastructure connects the internet backbone to “last-mile” networks serving individual premises.
This business model works because of its simple, incontestable premise: Middle-mile investment lowers the capital cost of building last-mile connections. This drives providers to reach residences, farms, and businesses in rural and low-income communities with reliable, future-ready fiber “further and faster.”
Support for revitalized private investment and competition is built into the rules of many such programs, most notably the federal Enabling Middle Mile Broadband Infrastructure Program, which just awarded about $930 million to 35 projects that will deliver over 12,000 miles of fiber broadband connectivity to 350 underserved counties, many of them in Texas. Per program guidelines, more than half the final project dollars will come from private businesses, utilities, cooperatives, and local government entities, a fact that Mr. Giovanetti overlooks.
As to the question of whether middle-mile investments attract new and nontraditional providers to reinvigorate competition and accelerate service deployment, the answer has been overwhelmingly affirmative based on wide experience. In recent years, states have leveraged diverse models to progressively make centralized middle-mile investments specifically to advance access and affordability objectives. For example, Illinois and Washington initially launched middle-mile buildouts to connect “anchor institutions” like universities, hospitals, and public schools. They then expanded these networks to offer cost-competitive retail services, with 40 and 60-plus ISPs respectively signing on. These along with many other well-documented successes have accelerated and improved the deployment of last-mile services and middle-mile connections in low-density areas.
A seemingly deliberate falsehood that Mr. Giovanetti seeks to perpetrate is that middle-mile programs exist primarily to hand taxpayers’ money to electric utilities. There is no evidence whatsoever of this claim. What is true is that rural electric cooperatives — which are nonprofits dedicated to their communities — have been strong partners of local middle-mile projects because they are not bound to a profit motive and also can leverage broadband for other critical endeavors like “smart grid” projects.
What’s really behind these middle-mile federal grants? A recognition that we can’t bridge the digital divide without middle-mile infrastructure, and this needs to be incentivized alongside last-mile programs like the US Broadband Equity, Access, and Deployment (BEAD) Program.
How can Texas benefit from these federal incentives? Simple: continue to build strong state-level cooperation to use federal funds-based, proven best practices from other state broadband offices and nontraditional regional operators. Far from being boondoggles, middle mile programs are arguably the most successful and cost-effective programs to date in bringing broadband to unserved and underserved Americans.