Rural Broadband Economics: A Review of Rural Subsidies
INTRODUCTION AND SUMMARY
This paper, commissioned by NTCA – The Rural Broadband Association and USTelecom – The Broadband Association, examines communications networks, road networks, and electric power networks as three key network infrastructure industries; and the resulting vulnerability in low-density rural areas with the highest need for targeted subsidies.
In establishing sound public policy (and rules implementing that policy) regarding broadband deployment in high cost and rural areas, it is useful to first consider the economics of investments. In particular, the economics of network investment in rural areas is germane. Networks in general exhibit economies of density; that is, costs per user (or usage unit) are lower in high density areas. As one moves to more rural areas, with any network, the costs per user become increasingly high, eventually leading to unsustainable business models to provide network services.
In this respect, there are similarities between networks in communications, electric power, roads, natural gas distribution, water distribution, and sewer networks. By the very nature of network economics, each industry exhibits economies of density and each reaches a point at which un-subsidized provision of service in low-density areas is not viable. The causes of higher costs in low-density areas are discussed in this paper using communications examples. In addition, the scope of low-density areas in the United States are considered.
The importance of subsidies to networks in low-density areas is described for each of the major U.S. network industries. The importance of subsidies depends in large part on whether there are substitute methods of providing similar services (e.g., wells for water, propane tanks instead of nature gas networks, septic systems instead of sewer networks).
Links to the full PDF can be found at USTELECOM website HERE.
Impact of Federal Regulatory Reviews on Small Cell Deployment
Introduction and Executive Summary
The objective of this paper is to independently assess the impacts of regulatory reviews required for the National Historic Preservation Act and the National Environmental Policy Act (NHPA/NEPA) on 5G small cell roll-outs by U.S. wireless carriersi. In assessing the costs wireless carriers incur in relation to these reviews, Accenture found the following:
• 29% of deployment costs are related to NHPA/NEPA regulations when reviews are required
• The industry incurred $36mm in costs for NHPA/NEPA reviews for small cells in 2017
• As small cell deployment grows significantly in coming years, it is projected that wireless carriers will incur $2.43bn in NHPA/NEPA costs from 2018 to 2026
• Savings of $1.56bn are estimated if the proportion of small cells requiring review under NHPA/NEPA could be reduced by two-thirds
Can a Fixed Wireless Last 100m Connection Really Compete with a Wired Connection and Will 5G Really Enable this Opportunity?
This cable industry report discusses many complex details that need to be addressed in building 5G networks.
The report is HERE:
AT&T to Launch Mobile 5G in 2018
The press release is HERE.
Microsoft calls for U.S. strategy to eliminate rural broadband gap within 5 years
Today, 23.4 million Americans in rural communities lack broadband internet access. The time is right to set a clear and ambitious but achievable goal: to eliminate the rural broadband gap within the next ve years. Microsoft believes the U.S. can bring broadband coverage to rural areas within this time frame, based on a strategic approach that combines private sector capital investments in new technologies and affordable public sector support.
This link will take you to white papers, fact sheets, videos, technology & patents and a Press Pack.
Communities seeking better broadband access should contact Microsoft about being included in the next round of AirBand demonstration projects.
USTelecom: Broadband Investment Dropped in 2016
U.S. broadband providers invested approximately $76.0 billion in network infrastructure in 2016 down from approximately $77.9 billion in 2015 and $78.4 billion in 2014. From 1996 through 2016, the broadband industry has made capital investments totaling $1.6 trillion. The start of the decline, the first since the recession ended in 2009, coincided with FCC’s 2015 decision to reclassify broadband providers as common carriers under Title II of the Communications Act. The data raise flags that warrant further investigation into whether Title II reclassification contributed to the decline in broadband capital investment.
Full Report HERE.
A Policymaker’s Guide to Rural Broadband Infrastructure
Before investing significant public funds, it is worth taking stock of existing programs, refining the problems policy should address, and defining principles for effective rural broadband policies.
A message from CTIA and America’s wireless industry:
Imagine doctors in New York providing remote care to patients in rural Montana, connected cars reducing accidents and improving commutes. The race to deploy 5G is underway and we’re at a critical moment. The EU, China, Japan, South Korea and others are doing everything they can to win. New rules for new 5G networks will allow the U.S. to lead the way without heavy government involvement or public funding. With quick government action on the spectrum and infrastructure policy, the wireless industry stands ready to invest $275 billion to deploy next-generation 5G networks, according to Accenture. This will fuel innovation and entrepreneurialism across every sector, creating more than 3 million jobs, adding $500 billion to the U.S. economy and driving breakthrough advancements in remote health care, connected vehicles, energy, education and beyond-making our lives better and safer. Learn how at CTIA.org. Source Politico Morning Tech.