Moore's Law Matters for Rural Internet Access

At some point, Moore’s Law matters for rural internet access supply and costs. The reason is that communication networks serving low-density areas are expensive, but Moore’s Law materially reduces such costs by constantly increasing the power of computing solutions and slashing the cost of such capabilities. 

That can be seen in the cost of a transistor over time, which allows the cost of computing to decline in half every 18 months to 24 months. 

The reason we are able to use millimeter waves commercially for consumer communications is Moore’s Law, which reduced the cost of applying sophisticated signal processing so much that the formerly-unusable millimeter wave spectrum now can be used even for consumer communications and access networks. 

The Tennessee Advisory Commission on Intergovernmental Relations estimated in a 2017 report that connecting 160,000 unserved homes in areas of the state ineligible for funding through the FCC’s Connect America Fund would cost $125 million to $799 million. That works out to about $78,125 per location. Other estimates place network costs at $33,000 per customer even at 70-percent take rates. Lower take rates raise the cost per customer. 

No consumer-reaching commercial network could ever hope to break even on a network with such high costs, as even networks costing $2,500 per location often face challenging economics. 

source: NTCA

But Moore’s Law, applied to space-based network launch costs, for example, has reduced costs for low earth orbit satellites by 20-fold over the last decade. 

Moore’s Law also allows us to do sophisticated spectrum sharing and spectrum aggregation, again improving our ability to supply connectivity services at lower costs than was possible in the past. 

Moore’s Law also powers the increasing bandwidth of optical fiber and hybrid fiber coax, enables the application of artificial intelligence to voice processing and pattern recognition, all of which mean e-commerce insights and customer service capabilities grow more powerful over time. 

Moore’s Law underpins our ability to create virtualized networks that cost less to build and operate, as well. 

That is not to underestimate the importance of financial subsidies or human agency,, as in many rural areas even the most-efficient platform might fail to generate sufficient revenues to sustain operations and service. 

Lower costs per bit for mobile bandwidth as well as fixed network  capacity have been the trend for decades. Slowly, those advantages will accrue in rural areas, even if the bandwidth gap between urban and rural areas does not completely close.