It's Just Economics: Useful Bandwidth Fast, for More, Versus Lots of Bandwidth, for Fewer, Over Time

Cost versus benefit, and cost versus benefit plus time to activate are the issues that traditionally bedevil policymakers trying to extend home broadband coverage in rural areas. Even when such programs are supposedly “technology neutral,” they rarely are, in practice. 

One recent example is the federal government's $42 billion BEAD program. While the program officially claims technology neutrality, it has maintained a strong preference for fiber-optic infrastructure that effectively discriminates against newer technologies like low-earth orbit (LEO) satellites and fixed wireless access.

This bias happens for several reasons. 

Traditional fiber deployments receive higher priority in grant evaluations, even when alternative technologies might serve rural areas more cost-effectively and quickly.

Cost-per-passing requirements could favor established telcos and cable companies with existing infrastructure in place.

While ostensibly neutral, technical requirements are often calibrated around fiber capabilities, making it difficult for satellite or wireless providers to compete on equal footing.

And then there is regulatory capture. Rural telcos often have established relationships with state broadband offices and federal agencies, having participated in previous subsidy programs like the Connect America Fund.

Programs prefer more "permanent" solutions (fiber) than platforms that can  be deployed affordably, now, even if less capable in terms of raw bandwidth.

In practice, these biases mean the BEAD program encourages states to overspend on high-end fiber optic infrastructure at the expense of platforms that would be cheaper and faster to deploy. 

The point is that satellite and fixed wireless solutions can often serve scattered rural populations more quickly and cost-effectively than fiber builds. And though bandwidth is more limited than fiber-to-home would provide, untethered access arguably meets existing needs quite well, allowing existing funds to connect more locations, faster. 

And yes, over the longer term, everyone agrees “fiber is the permanent answer.” But between then and now it arguably makes sense to connect as many as possible, right away, with useful levels of access. We can upgrade later as requirements change and platforms are upgraded. 

For most rural households, Starlink speeds, for example, are sufficient for the use cases most households have:

• Streaming: Netflix recommends 25 Mbps for 4K streaming, so Starlink's typical 100-200 Mbps easily handles multiple simultaneous streams

• Video conferencing: Most platforms require 1-3 Mbps for standard calls, 3-5 Mbps for HD video calls

• General browsing and email: These activities require minimal bandwidth

• Multiple device usage: With 100+ Mbps, families can simultaneously stream, work from home, and browse without significant issues