Broadband for all to cost $23 billion

4Mbps broadband for all to cost $23 billion, won't use fiber

By Nate Anderson 

The FCC has set a 4Mbps download target for universal US broadband—but how to get those (modest) speeds to underserved areas? According to a new report (PDF) from the Commission, we can forget about fiber—it costs too much. Underserved areas would be served best by DSL, some 4G wireless coverage, and satellite service for those who truly live in the boondocks.

But the price for all this non-cutting-edge tech is still steep: $23.5 billion.

We're going to fund... DSL?

Network builders today all say that fiber is the future of wireline—Australia has just committed to run fiber to 93 percent of its homes, assuming that it will provide a next-gen Internet platform for decades. As the federal government thinks about doling out universal service cash, though, fiber is at the bottom of the list, and the issue is immediate cost.

"While end-users are likely to demand more speed over time, the evolution of that demand is uncertain," says the FCC's report. "Given current trends, building a future-proof network immediately is likely more expensive than paying for future upgrades."

This is in large part a measure of density. As Australian consultants found out when they examined the feasibility of the government plan, reaching the last 7 percent of the population was dramatically more expensive when using fiber. Australia opted for fixed wireless and next-gen satellite, but that's in part because it mandated reasonable 12Mbps connections for everyone in the country. DSL generally has no problem hitting 4Mbps, even over long loop lengths, and all US homes already have a phone line, so it became the tech of choice for the FCC.

4G wireless tech is a better choice in the eastern two-thirds of the country, where population densities are much higher—but those regions are largely served by 4Mbps+ broadband already. (The map below shows which parts of the country are best served by DSL and which by 4G wireless.)

DSL vs. 4G (source: FCC)

According to the FCC's model, 7 million housing units in the US can't hit the 4Mbps target. They also won't be getting faster speeds soon, since it costs more money to roll out service to those areas than will be recouped in revenue. This difference, called the "investment gap," can be plugged with $23.5 billion to cover buildouts and ongoing expenses.

The broadband investment gap (source: FCC)

One might expect that these underserved users would be served not by the major US telcos but by small regional companies operating far out in the hinterlands. According to the FCC, however, "52 percent of unserved housing units are in census blocks where one of the three Regional Bell Operating Companies, or RBOCs, (AT&T, Qwest or Verizon) is the dominant local exchange carrier."

Problems

But after throwing billions of dollars at the problem, will we have solved it? The FCC isn't sure—in fact, it can't be sure. Carriers have always balked at releasing helpful data on their deployment footprint and the speeds available to customers, so the government has finally launched its own broadband mapping effort. Until that's complete, though, the FCC simply doesn't know how accurate its numbers are.

"Unfortunately, there is a lack of data at the required level of granularity, both in terms of availability—which people have access to what services—and of infrastructure—which people are passed by what types of network hardware," says the report, a finding echoed numerous times in the report's pages.

The other problem is that 4Mbps may not really "solve" the problem of slow broadband by the time it's rolled out, and the FCC knows it. "The growth rate in the speed of broadband in recent years of approximately 20 percent suggests that broadband networks might be called upon to deliver speeds higher than 4 Mbps (downstream) and 1 Mbps (upstream) across the next decade or more. Simply put: if required speeds continue to double roughly every three years, demand will outstrip the capabilities of 4G and 12,000-foot-loop DSL."

Still, going directly to fiber would cost over $60 billion, and the FCC argues that an incremental approach—getting decent DSL, then extending fiber to the node, then all the way to homes—is a better long-run plan.