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How to Future-Proof a $65 Billion Broadband Investment

How to Future-Proof a $65 Billion Broadband Investment Image Credit: kamils/BigStockPhoto.com

$65 billion - the biggest federal investment in connectivity since 1956 and the Interstate Highway System - is ready to be spent on broadband. States are gearing up to dole it out and bring high-speed internet access to over 24 million Americans without it or unable to afford available services. Broadband access in unserved and underserved communities has the potential to spur innovation, create jobs and develop more equitable and prosperous communities. It may be our only chance to close the digital divide before it gets too big to handle. We need to get it right. 

Everyone in the business of broadband, from private companies to municipalities and even non-profits, must make sure it can operate, generate revenue and be profitable enough to sustain the industry without another government donation. We have the money to build out broadband, but this is only the first step. Now, we have to make intentional decisions about how we spend it to yield the benefits we want it to bring, not just for us but for generations to come. Then, we implement the best solutions to take us there.  

What do we want?

We need to consider more than just the cost behind broadband buildouts and think about what we hope to accomplish with such a historic investment and what comes next. We need skilled people to design mechanisms that fix, maintain and innovate broadband networks and ensure they are built to scale as communities grow. Remote work is already drawing businesses and individuals to smaller towns and cities offering incentives and a more affordable life. Broadband can level the rural/urban playing field of opportunities, but as the industry becomes more competitive, speed will be what determines long-term success. Population growth and competitive speeds will drive innovation and economic benefits for more communities and future-proof their success. 

Various grounded and wireless technologies will be critical to supporting future visions of ubiquitous connectivity and the benefits it will bring, including fiber. Business and public leaders are uniting around the supremacy of fiber to future-proof the growth of 5G and successor wireless technologies that will allow AI, automation and robotics to revolutionize industries. For small carriers, bringing mobile and industrial 5G to less populated areas would be financially prohibitive, and larger providers prioritize bringing service into areas that can generate profit. But with an underground fiber infrastructure, smaller companies have more capabilities to tap into it as a backhaul to extend strong wireless signals to more of those places. 

There’s no one right answer

Depending on the community, broadband spending solutions will be different. For some regions, it will make sense to disable the legacy infrastructure (and in a way that avoids harming the environment), like cities where raceways of old cable, telephone and electrical wires clutter up the underground. Smaller towns and unconnected regions that have no need to consider this expense can spend those funds in other ways that better suit their community.  

We need to leverage existing coverage maps from public and private sources to know which communities need what — to identify where we can connect to nearby networks and where we need to build something new. Smaller areas with less population density can work together to bring broadband to their communities through creative partnerships with neighboring providers, local leaders and experts in the industry, even without having to build out networks themselves. Working with local businesses, co-ops and other group initiatives can result in innovative solutions from the ground up that best serve their community’s needs.

Prepare for competition

As universal broadband closes the digital divide and revitalizes rural communities, we need to take steps to sustain those benefits for the next 50 years with the healthy evolution of broadband industries - this implies fierce competition. Competition keeps prices affordable for consumers, expands product ranges and innovation, increases wages and improves working conditions for employees, resulting in a snowball effect on the greater economy. Competition drives investments and improvements so that broadband continues to be what we want long into the future. 

The broadband industry needs competition to sustain itself into a future that no longer needs federal financial injections. Without the threat of losing customers, companies can stagnate, no longer improve in what they deliver, and the subscriber experience will suffer. Without competition driving the industry, broadband opportunities in underserved areas will decline, compounding existing problems instead of solving them. For communities with less-dense populations that are most dependent on government funds to get off the ground and running, competition will be key.

This investment is a once-in-a-lifetime opportunity, and our first chance will likely be our only one. Even though we’ve made mistakes in the past, now is the chance to learn from them. Just like the initiative to bring electricity to all American homes, this historic investment can transform our society into what we want broadband to be. To do this, we need to carefully consider not only capital expenditures but operational expenditures required to sustain that transformation long into the future.

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Author

Cheri Beranek is the CEO of Clearfield, a 2023 EY National Entrepreneur of the Year award winner and a 2021 Minnesota Business Hall of Fame inductee. Under her leadership, Clearfield has grown from a concept to a market cap of more than $500 million providing optical-fiber management and connectivity solutions across North America.

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