The Rural Digital Opportunity Fund: Subsidizing Toyotas or Ferraris?

The problem with using speed alone in assessing the capabilities of broadband networks is that it represents only one product characteristic, and is not necessarily linked with the requirements of the applications commonly used by end consumers. While there has been an explosion in the quantity of data consumed since 2010, most of this relates to applications that run quite satisfactorily on connections with download speeds of 25Mbps — mostly web browsing and video and audio streaming — which incidentally were all available ten years ago when the broadband standard was increased to 4/1. One way of thinking about the problem is to substitute something else fast into the example and evaluate the analogy. Let’s think about cars. A Toyota Corolla is quite capable of meeting nearly all the transport needs of the average consumer. A Ferrari is certainly capable of travelling faster, but is significantly more expensive. It may get someone from A to B in record time, but if most of the trips made are very short, or not many trips are made in the first place, then the time savings of upgrading from a Corolla to a Ferrari may be negligible (indeed, it is nearly impossible for a human eye to detect the change in page load time from upgrading a connection serving an HTML web application much above 10Mbps). In this view, the modest changes to the Rural Digital Opportunity Fund appear much better targeted by reallocating resources from the Ferrari end of the spectrum towards the Corolla one. Hence, 6 million premises stand to benefit from the revised plan rather than 4 million.