The cost of running fiber in rural America: $200,000 per passing

A US Department of Agriculture (USDA) release of the latest grant winners for the ReConnect broadband deployment program was the cost of deploying fiber in rural America. Looking at rural Alaska as an example, the Alaska Telephone Company, which won a $33 million grant, is planning to run fiber to 211 homes and five businesses at a staggering cost of nearly $204,000 per passing. In addition to the grant, the operator said it plans to invest $11 million of its own money in the project. High passing costs appear common for other ReConenct operators as well. The ReConnect grants lead to (at least) two key questions: why fiber in the first place and what’s driving the higher costs? Fiber because no other options were on the table for these rural areas. As for what’s driving the high cost in award areas, Michael Burke, CEO of Alaskan operator MTA, stated the rugged terrain, short construction season, and wetlands in Alaska are all factors. But he added “the most significant cost driver is the difference between the relatively small number of homes being served and the distance to the nearest fiber optic network."