Rural Broadband Is Expensive Today

One of the trends that is a concern for internet service providers (ISPs) is plans by State Broadband Offices to force Broadband Equity, Access and Deployment (BEAD) winners to charge low rates for broadband. One argument for lowering rates is that the government is paying a big portion of the cost of building the broadband networks, and it ought to be able to extract concessions from the ISPs for taking the grant funding. In most places, BEAD will be used for the most sparsely populated places, which in many instances also have the toughest topography and construction challenges. The other argument I’ve often heard is that ISPs can provide lower rates because ISPs make a lot of money and can afford it. This might be true for the large national ISPs that can average the revenues from BEAD areas across larger markets with higher margins. But rural ISPs can’t be shouldered with providing the low rates so that folks can afford broadband. ISPs can’t be forced to somehow fund the end of the Affordable Connectivity Program – particularly in rural areas. Anybody who has ever operated any business knows that operating with too-low rates is a road to eventual financial disaster.