Broadband Financials: A Practical Primer

With the Infrastructure Investment and Jobs Act’s Broadband Equity, Access, and Deployment (BEAD) Program the federal government has made a historic investment of $42.5 billion into broadband infrastructure. This is an unprecedented amount of funding to universalize broadband in the United States – but without proper guidance, it could easily be wasted. This primer provides an introduction to broadband financials and some key questions broadband officials should consider incorporating into their evaluation process. The aim is to help readers manage broadband programs efficiently and effectively, aligned with two fundamental principles. First, even with billions of dollars available, there is not enough money to achieve broadband policy goals if recipients are awarded much larger subsidies than they actually need. To make efficient use of public funds, broadband officials must consider not just build costs but also revenues, operating expenses, and the availability of private capital. Second, investments in broadband should deliver lasting infrastructure. Federal policy envisions a wide range of players participating in broadband, including municipal networks, community institutions, rural cooperatives and, of course, communications companies. Any of these can successfully deliver broadband projects but all, whether for profit or nonprofit, need to have a viable financial plan.