Regional utility districts formed among multiple towns or municipal entities represent one of several emerging frameworks for providing broadband service to unserved or underserved areas, particularly in more rural parts of the country. Historically, such utility districts have been formed to build out infrastructure and provide essential services. This has been a common model in rural America, used to provide a variety of services, including water or emergency medical services. In recent years, states such as Vermont and New Hampshire have adopted policies to support the formation of such districts to provide high-speed internet to residents. Bringing broadband to rural areas is difficult because of the economics; the infrastructure is expensive to deploy, and sparse populations mean a small customer base for traditional internet service providers. Creating regional districts raises aggregate demand by combining the populations of multiple towns. This provides myriad benefits: It increases the number of potential customers, mitigates the risk facing individual towns, and allows services to be provided more efficiently through one regional network rather than individual systems. This article is part of a series that looks at three approaches to expanding broadband access to rural areas that lack sufficient service.

[Anna Read is senior officer and Lily Gong is an associate at the Pew Charitable Trusts' Broadband Access Initiative.]

For the last twenty years, the industry has talked about broadband in cities as a duopoly, meaning there was competition between cable and telecom companies – competition between cable modem broadband and DSL broadband. Whether coordinated by backroom deals or by listening to smart advisors, both industries have given up trying to compete on price. By the time cable modem speeds hit 30 Mbps speeds, the market competition was over, and cable clearly won the price war. I would argue that’s the duopoly died when faster DSL was a flop because telecom companies stopped raising rates and were content serving the third of the public who cared more about price than speed. Even today, most people who stick with DSL hate the speeds and performance but don’t want to pay the price for cable modem broadband that is approaching twice the price as DSL. There are a lot of plans by ISPs to build fiber in the coming few years. But much of this building is by the big telcos. While some think that it's going to bring new price competition, it’s more likely that the new fiber builders will piggyback on the already-high rates of the cable companies. If history is our guide, we’ll see three or four years of loud advertising after fiber is introduced into a market. But then, both sides will likely grow comfortable with the adjusted market share, and we’ll have revived the duopoly again.

[Doug Dawson is President of CCG Consulting.]

State policymakers have increasingly sought new solutions to improve the availability of broadband, including allowing electric cooperatives to offer service, the formation of regional utility districts to provide broadband, and the use of investor-owned utilities to improve the availability of critical infrastructure. The advantages and potential challenges of these models will be explored in a series of three articles, the first looking at the potential role of electric cooperatives. Electrical cooperatives are private, nonprofit organizations that provide electricity to customers in their service areas. They are customer-owned and operate on a cost-of-service basis, returning extra profits as dividends to members or to be invested in infrastructure.  Many electric cooperatives are well-positioned to bring broadband to rural areas because they already provide many of these communities with electric service. They also have many of the resources, equipment, and personnel needed through their electric operations. The cooperatives have built out infrastructure such as utility poles that can be upgraded to incorporate fiber as part of smart-grid modernization projects. And they can leverage existing resources—such as trucks, administrative personnel, customer support, and billing systems—to serve broadband customers. A key challenge for electric cooperatives seeking to provide broadband services is securing funding or financing for deployment. Because they do not have as much capital as traditional internet service providers, cooperatives often turn to state and federal programs for additional funding for these projects.

[Anna Read is senior officer and Lily Gong is an associate at the Pew Charitable Trusts' Broadband Access Initiative.]

A “gold rush” is on for Alaska tribes and Native corporations that are trying to capture a surge of federal infrastructure money to provide city-quality broadband service in more than 200 villages statewide. Representatives for the groups say this could be their moment to transform lives and village economies by upgrading the glitchy, slow and often unaffordable cell phone and internet service that exists across rural Alaska. “This will be life-changing,” said Kevin Hamer, general manager of Yukon Kuskokwim Delta Tribal Broadband Consortium. The group, representing several tribes, has applied for a $300 million federal grant to bring high-speed internet to 17 villages in Southwest Alaska. They’re one of several tribal groups or Alaska Native corporations that are applying for a chunk of roughly $3 billion that has been set aside for tribes nationally by the National Telecommunications and Information Administration (NTIA). Much of that money comes from last year’s $1.2 trillion Infrastructure Investment and Jobs Act. Some of the groups are teaming up with telecommunications companies in hopes of winning grants to extend fiber-optic cable, considered the gold standard for broadband delivery, to rural communities. Others are trying to win grants to get satellite-delivered broadband using low-earth orbiting satellites. Supporters say the service would be available more quickly in Alaska’s villages than fiber, but it’s still being tested in Alaska. Some groups say their broadband might cost less than $100 monthly, a fraction of what rural residents currently pay.

Although fixed wireless is getting a lot of attention these days, the technology is not in Frontier’s plans “in a material way,” said Frontier Chief Network Officer Veronica Bloodworth, adding “we’re a fiber-first company.” Bloodworth is part of a new Frontier management team put in place as the company emerged from bankruptcy. After working previously on fiber deployments at Verizon, she said her position at Frontier is her “dream job,” noting that the company is “big enough to have a scale advantage but small enough to be nimble.” Frontier is on track to meet goals established under the new management team, including having fiber available to 10 million locations by 2025. In 2022 the company expects to build to 1 million locations, which will increase to a 1.6 to 1.7 million-location run rate next year, Bloodworth said. Bloodworth reiterated that Frontier’s cost per home to deploy fiber in the current investment phase is $900 to $1,000 and she still “feels good” about those numbers, even though the industry is experiencing some shortages that could drive cost increases.