Is There Enough BEAD Funding?

There is a tendency to think of high-cost areas—places where it’s expensive to build fiber—as only being in remote places with tough terrain. We’re going to see a lot of other cases of high cost locations that I think are going to surprise State Broadband Grant offices. There are many reasons that drive up the cost of building a landline network. Some places are high-cost by definition. I know of a small town in Arizona that is fifty miles away from the nearest other people. Building fiber to this town means building middle-mile backhaul, which in this case is through tough terrain and faces the extra burden of aging poles. The condition of poles can be a huge cost driver anywhere. I’ve worked with several rural communities where more than 90 percent of poles need major work to add fiber. The issue that is going to blindside a lot of grant offices is housing density, measured by the number of residences per mile of road. Another major issue to consider is the degree to which inflation and BEAD grant rules are driving up the cost of construction. BEAD rules can easily add up to 30% to the cost of building a rural network due to factors like prevailing wages, letters of credit, and environmental studies. Finally, I think broadband offices are relying too heavily on using fixed wireless as the solution for high cost areas. There are places where fixed wireless is a good solution, but plenty of others where it is not.