Evaluating studies of the cost to serve all Americans with broadband

The Federal Communications Commission estimates it will take between $397 billion and $478 billion to reach all underserved locations. It’s worth remembering there are only two numbers at play: the number of locations that don’t have access to 100/20 broadband service, and the average cost to bring fiber-to-the-home service to those locations. I estimated 23.1 million un- and underserved locations. The FCC study estimated 45.5 million, or 32% of all United States housing units. The second part of the equation is the cost to serve the average unserved or underserved location. The existing studies range from $1,818 per location to $5,714 per location. My model used an average cost of about $6,500 per location. The total capital required in my model was about $151 billion. I believe the FCC's estimate of the number of underserved is off by a factor of 2. I also believe the cost to serve each location is high, though given supply chains, inflation, labor costs, and other externalities there’s significant uncertainty at the cost to serve a location with broadband. For this reason, it remains critical that National Telecommunications and Information Administration (NTIA) equip states (and the public) with a cost model, and encourage state rules that bring competition to the grant process. Once Rural Digital Opportunity Fund (RDOF) and private capital matches are considered, it’s likely there’s enough money in the BEAD program to reach all the unserved and make a significant dent in the underserved, particularly in states with lower cost of deployment.