Broadband USA

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It may come as a surprise that more than 35% of rural Americans lack access to the internet at minimally acceptable speeds. 1More than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speed. With the recent COVID-19 pandemic, many services have been moved online and companies are also more open to telecommuting. The lack of affordable and efficient internet services has resulted in an economic divide between the urban and rural areas.

 

What are the current efforts by the US government?

Under the American Jobs Plan by President Biden, US$65 billion will be invested into broadband development. The plan aims to bring affordable high-speed internet service to rural and underserved areas in the US. The funding will be directed through local communities and state grants based on the rationale that a more localized funding will help to ensure that the funds will be applied on each area’s unique needs.2  However, based on a study conducted by Deloitte in 2021 3, US$130 - $150 billion investment in fiber infrastructure will be needed to adequately support broadband competition, rural coverage, and wireless densification. Therefore, additional investment from the private sector will needed on top of the state funding to help close the digital divide.

What are the current challenges/obstacles?

Most of the regions in the US are currently covered by private broadband providers such as Verizon and Xfinity. There is little economic incentive for private companies to establish extensive broadband infrastructure in rural areas considering the returns on investment. In addition, the per capita income in rural areas is often lower than that of urban areas. Other than being an issue of physical availability, there is also the question of affordability.4 The issue of affordability also extends beyond the rural areas as low-income households in the urban areas cannot afford broadband access at the current prices. However, there is an encouraging sign of adoption with the digitization wave brought about by the pandemic. Broadband is the “new electricity” as it is a necessity for many functions in our daily lives.

The importance of broadband service is no longer a debate as even modern-day farming rely on high-speed internet to grow crops. Farmers can now better their crop yield by monitoring fertilizer, soil, water, and livestock feed through various software. In 2019, under the Rural Digital Opportunity Fund (RDOF), US$9.2 billion was directed towards developing unserved rural areas and set higher speeds standards. This is on top of the US$7.2 billion allocated in 2009 .Based on the broadband development

report published in 2019 5, in just 2019 the number of Americans without access to broadband connection has decreased by 20%. The pandemic has highlighted the importance of bringing reliable high-speed connections to the rural area so that these areas will not be left being. There is now a brighter light shone on this key area of development. The federal funding combined with the participation of the private sector will aid the move in the right direction as proven before. The road to universal reliable high-speed internet in the US is still far from the end but for now it seems to be heading in the right direction.