Have you received or considered applying for public funding to complete your broadband buildout? Governments across the globe are allocating more resources than ever before to increase the availability of high-speed internet access in underserved areas. In November 2021, the United States Federal Government passed the Infrastructure Investment and Jobs Act (IIJA) allocating $65 billion1 toward the expansion and affordability of broadband coverage to aid in closing the digital divide–the largest sum set aside by the government for internet improvement initiatives in the country to date.
The passing of IIJA and similar funding initiatives have opened up space for additional opportunities in both the private and public sectors. In response, numerous proposals have been submitted in an effort to add sources of revenue or diversify offerings. However, with various avenues to achieve coverage objectives, newcomers may find themselves unsure of where to begin. Below are four considerations before starting on your grant-funded broadband projects.
1) Think fiber first. Other broadband options may not be long term solutions.
The need for greater geographical broadband coverage is not the only driver concerning communications service providers (CSPs) today. CSPs across the US are experiencing increased demand on their current infrastructures, as more end users more readily participate in bandwidth-consuming activities, such as streaming services, online gaming, and online conferencing. And with the addition of even more internet reliant services, bandwidth demand is expected to grow exponentially over the next decade.
In addition to fiber, solutions ranging from fixed-wireless to satellite have been proposed to make broadband increasingly available to rural America, especially in more difficult to access regions. However, even the most sophisticated satellites experience issues with latency, causing disruptions to voice and video calls that students and the remote workforce depend upon regularly.2 Fixed wireless typically offers lower latency than satellite, especially in less than optimal weather conditions, but cannot transmit data as quickly as fiber. With regards to overall capacity, reliability, latency and customer satisfaction, fiber continues to outperform any other broadband technology.3 Moreover, fiber to the home (FTTH) has been identified as the only method available today that can meet the demands coming between now and 2030.
2) Always be cognizant of grant guidelines.
Grants awarded for broadband expansion often come with stipulations controlling how funding can be used. Once a grant is received, it is crucial a plan be developed to track how much money is being spent during a fixed term and which customers are being served. If these stipulations are not met, a refund on a portion or all of the grant may be demanded.
Remember the following:
Grant money does not last forever. Timeliness is a crucial component of deployment. Buildout progress must be made within a certain timeframe, whether or not factors are in one’s control.
Companies are seeing increased delays in receiving materials due to supply chain issues, with some spending most of their 2 year grant window waiting on the arrival of needed assets. Labor shortages are also of great concern to smaller providers.3 The sooner you know what it is going to take to complete your network buildout, the sooner you can place your orders and initiate hiring.
Along the same lines, you will want to ensure you have consistent outputs that aid in decreasing your permitting window. If your permit is not approved the first time, you may have to repeat part or all of the process, which can add an extra 3 to 4 months to the buildout.
Grant money may cover only certain expenses. As is the purpose of initiatives such as IIJA, a greater number of customers are being served, leading to a more crowded market in the US. According to a study published by the Fiber Broadband Association (FBA), fiber broadband passes over 60.5 million US homes, a growth of 12% in 2021.3 Building out to customers who exceed a minimum requirement, for example, the FCC’s baseline of 25 Mbps/3 Mbps4, may break the terms of your agreement.
3) Analyze the market
As you continue to grow your business, keep in mind other possible opportunities outside of the grant initiative. Commercially available GIS data provides a plethora of market information for analysis. Not only can GIS data be used to understand proximity to your current network (i.e., all businesses the backbone passes), but it can be a key component in evaluating market and demographics to understand take rates and help validate proposed expansions as you search for additional sources of revenue. Even if you do not plan to expand immediately, understanding demographics and take rates can assist in building marketing strategies for the areas you are seeking to serve.
4) Capture good data upfront
The planning phase is where most CSPs realize the payback of having and maintaining good data. Networks can be designed faster than ever before, especially if plans have been developed around accurate and complete data.
Undeniably, keeping track of project spending is a must. Understanding what assets will be deployed and how they work together to provide service to the end user can help you deliver more complete reports to all stakeholders.
In addition, many emerging fiber broadband providers do not intend to deliver service permanently. Those seeking to become acquired by a larger service provider look more promising as prospects when able to present accurate records of owned assets.
In summary, with more funding allocated to the expansion of broadband services in the US than ever before, emerging market players have a unique opportunity to compete in a space dominated by Tier 1 and Tier 2 providers. However, this opportunity does not come without its challenges. By keeping in mind the four key components of project planning highlighted above, CSPs can create a solid foundation upon which to accelerate deployments and remain competitive.
1 The White House. Fact Sheet: The Bipartisan Infrastructure Deal. The White House. https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/
2 Schell, A. Fixed Wireless Internet vs. Satellite Internet: What Are The Differences. Upward Broadband. https://www.upwardbroadband.com/fixed-wireless-internet-vs-satellite-internet-what-are-the-differences/
3 Fiber Broadband Association. Fiber Broadband Enters Largest Investment Cycle Ever. Fiber Broadband Association. https://www.fiberbroadband.org/blog/fiber-broadband-enters-largest-investment-cycle-ever
4 Mohney, D. NTIA, FCC, States prep for BEAD Broadband Funding Bonanza. Fiber Broadband Association. https://optics.fiberbroadband.org/Full-Article/ntia-fcc-states-prep-for-bead-broadband-funding-bonanza