Private equity won’t close the digital divide — I know, I’ve tried.

Private equity funding has been flooding into broadband, partly drawn by the sweetener of $42 billion in federal funding from the Broadband Equity Access and Deployment program. Broadband deployment is a high-cost business, and most internet service providers need outside financing to grow. But when we go looking, private equity is increasingly our only option. The problem is that, with sky-high return expectations and short timeframes, this money is unsuited to building in rural and low-income communities most in need of investment. The result? Private equity-backed broadband looks a lot like the legacy telcos it is supposed to disrupt, skipping over poor, rural or low-density communities. This leads to the modern equivalent of redlining — swaths of America excluded by the math and logic of prevailing capital. There are, of course, responsible private equity firms delivering real value. But as a vehicle for expanding broadband to underserved communities, this capital is structurally misaligned. The incentives that drive private equity — rapid returns, scale at all costs, and quick exits — run counter to the long-term commitment, trust, and responsiveness that equitable broadband requires. If we’re serious about closing the digital divide, we must channel mission-aligned capital into the sector. Getting it done right requires investors and operators who see broadband as long-term infrastructure, not a short-term asset to flip. The capital we need:

• Understands the realities of rural broadband
• Respects the expertise and experience of local operators
• Is willing to accept reasonable — not extractive — returns
• Will invest for generational impact, not just quarterly gains

[Brian Snider is the CEO of Halo Fiber.]