Good Outcomes Beat Good Intentions: How Dumb Are We?

Good intentions clearly are not enough when designing policies to improve home broadband availability in underserved areas. In fact, since 2021, more than three years after its passage, the U.S. Broadband Equity, Access, and Deployment (BEAD) program has yet to install a single new connection.  

It seems we were determined to make the perfect the enemy of the good, preventing construction until we mostly were certain our maps were accurate. A rival approach would have proceeded on the assumption that residents and service providers pretty much know where they have facilities and where they do not; where an upgrade can be conducted fast and easily, and where it cannot. 

And perhaps (despite the clear industry participant interests that always seem to influence our decisions) we should not have insisted on the “fastest speed” platforms. Maybe we’d have prioritized “good enough” connections that could be supplied really fast and enabled the outcomes we were looking for (getting the unconnected connected; getting the underserved facilities that do not impede their use of internet apps). 

This is not, to use the phrase, “rocket science.” We have known for many decades that “good enough” home broadband can be supplied fast, and affordably, if we use satellite (geostationary or low earth orbit, but particularly now LEO) or wireless to enable the connections. 

To those who say we need to supply fiber to the home, some of us might argue the evidence suggests relatively-lower speed (such as 100 Mbps downstream) connections supply all the measurable upside we seek, for homework, shopping, telework. The touted gigabit-per-second or multi-gigabit-per-second connections are fine, but there is very little evidence consumers can even use that much bandwidth. 

Study/Source	Key Findings
Distinguishing Bandwidth and Latency in Households' Willingness to Pay for Broadband Internet Speed (2017)	Consumers value increasing bandwidth from 10 to 25 Mbps at about $24 per month, but the additional value of increasing from 100 Mbps to 1 Gbps is only $19. This suggests diminishing returns for speeds beyond 100 Mbps.
Are you overpaying for internet speeds you don't need? (2025)	Research indicates that many Australians are overspending on high-speed internet connections they don't need. Most households can manage well with a 50 Mbps plan unless they engage in high-bandwidth tasks like 4K streaming or online gaming.
Simple broadband mistake costing 9.5 million households up to £113 extra a year (2024)	Millions of UK households are overpaying for broadband by purchasing higher speeds than necessary. Smaller households often need speeds up to 15 Mbps but pay for over 150 Mbps, wasting £113 annually.
ITIF (2023)	- US broadband speeds outpace everyday demands - Only 9.1% of households choose to adopt 250/25 Mbps speeds when available - Clear inflection point past 100 Mbps where consumers no longer see value in higher speeds
ITIF (2020)	- Average existing connections comfortably handle more than typical applications require - A household with 5 people streaming 4K video simultaneously only needs 2/3 of current average tested speed - Research shows reaching a critical threshold of basic broadband penetration is more important for economic growth than faster speeds
European Research (2020)	- Full fiber networks are not worth the costs - Partial, not full end-to-end fiber-based broadband coverage entails the largest net benefits
US Broadband Data Analysis	- Compared to normal-speed broadband, faster broadband did not generate greater positive effects on employment
OpenVault Q3 2024 Report	- Average US household uses 564 Mbps downstream and 31 Mbps upstream - Speeds around 500 Mbps sufficient for most families
FCC Guidelines	- 100-500 Mbps is enough for 1-2 people to run videoconferencing, streaming, and online gaming simultaneously - 500-1000 Mbps suitable for 3 or more people with high bandwidth needs

We might all agree that, where it is feasible, fiber to home makes the most long-term sense. But we might also agree that where we want useful home broadband speeds, right now, everywhere, with performance that enables remote work, homework, online shopping and all other internet apps, then any platform delivering 100 Mbps (more for multi-user households, but likely not more than 500 Mbps even in the most-challenging use cases) will do the job, right now. 

Good intentions really are not enough. Good outcomes are what we seek. And that often means designing programs that we can implement fast, at lower cost, with wider impact, immediately or nearly so. “Better” platforms that cost more and are not built are hardly better.

Build Versus Buy is the Issue for Verizon Acquisition of Frontier

Verizon’s rationale for acquiring Frontier Communications, at a cost of  $20 billion, is partly strategic, partly tactical. Verizon and most other telcos face growth issues, and Frontier adds fixed network footprint, existing fiber access and other revenues, plant and equipment. 

Consider how Verizon’s fixed network compares with major competitors. 

ISP	Total Fixed Network Homes, Small Businesses Passed
AT&T	~70 million
Comcast	~60 million
Charter	~50 million
Verizon	~36 million

Verizon has the smallest fixed network footprint, so all other things being equal, the smallest share of the total home broadband market nationwide. If home broadband becomes the next big battleground for AT&T and Verizon revenue growth (on the assumption mobility market share is being taken by cable companies and T-Mobile from Verizon and At&T), then Verizon has to do something about its footprint, as it simply does not have enough ability to compete for customers across most of the Untied States for home broadband using fixed network platforms. 

And though Frontier’s customer base and geographies are heavily rural and suburban, compared to Verizon, that is characteristic of most “at scale” telco assets that might be acquisition targets for Verizon. 

Oddly enough, Verizon sold many of the assets it now plans to reacquire. In 2010, for example, Frontier Communications purchased rural operations in 27 states from Verizon, including more than seven million local access lines and 4.8 million customer lines. 

Those assets were located in Arizona, California, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, Wisconsin and West Virginia, shown in the map below as brown areas. 

Then in 2015, Verizon sold additional assets in three states (California, Texas, Florida) to Frontier. Those assets included 3.7 million voice connections; 2.2 million broadband internet access customers, including about 1.6 million fiber optic access accounts and approximately 1.2 million video entertainment customers.

source: Verizon, Tampa Bay Business Journal 

Now Verizon is buying back the bulk of those assets. There are a couple of notable angles. First, Verizon back in the first decade of the 21st century was raising cash and shedding rural assets that did not fit well with its FiOS fiber-to-home strategy. In the intervening years, Frontier has rebuilt millions of those lines with FTTH platforms.

Also, with fixed network growth stagnant, acquiring Frontier now provides a way to boost Verizon’s own revenue growth.

For example, the acquisition adds around 7.2 million additional and already-in-place fiber passings. Verizon already has 18 million fiber passings,increasing  the fiber footprint to reach nearly 25 million homes and small businesses​. In other words, the acquisition increases current fiber passings by about 29 percent. 

There also are some millions of additional copper passings that might never be upgraded to fiber, but can generate revenue (copper internet access or voice or alarm services, for example). Today, Frontier generates about 44 percent of its total revenue from copper access facilities, some of which will eventually be upgraded to fiber, but perhaps not all. 

Frontier already has plans to add some three million more fiber passes by about 2026, for example, bringing its total fiber passings up to about 10 million. 

That suggests Frontier’s total network might pass 16 million to 17 million homes and small businesses. But assume Verizon’s primary interest is about 10 million new fiber passings. 

Frontier has estimated its cost per passing for those locations as between $1000 and $1100. Assume Verizon can also achieve that. Assume the full value of the Frontier acquisition ($20 billion) was instead spent on building new fiber plant outside of region, at a blended cost of #1050 per passing. 

That implies Verizon might be able to build perhaps 20 million new FTTH passings as an alternative, assuming all other costs (permits, pole leases or conduit access) were not material. But those costs exist, and might represent about 25 percent higher costs. 

So adjust the cost per passing for outside-of-region builds to a range of $1300 to $1400. Use a blended average of $1350. Under those circumstances, Verizon might hope to build less than 15 million locations. 

And in that scenario Verizon would not acquire the existing cash flow or other property. So one might broadly say the alternative is spending $20 billion to build up to 15 million new fiber passings over time, versus acquiring 10 million fiber passings in about a year, plus the revenue from seven million passings (with take rates around 40 percent of passings). 

Critics will say Verizon could do something else with $20 billion, to be sure, including not spending the money and not increasing its debt. But some of those same critics will decry Verizon’s lack of revenue growth as well. 

But Verizon also sees economies of scale, creating projected cost synergies of around $500 million annually by the third year. The acquisition is expected to be accretive to Verizon’s revenue, EBITDA and cash flow shortly after closing, if adding to Verizon’s debt load. 

Even if the majority of Verizon revenue is generated by mobility services, fixed network services still contribute a quarter or so of total revenues, and also are part of the cost structure for mobility services. To garner a higher share of moderate- to high-speed home broadband (perhaps in the 300 Mbps to 500 Mbps range for “moderate speed” and gigabit and multi-gigabit services as “high speed”), Verizon has to increase its footprint nationwide or regionally, outside its current fixed network footprint. 

One might make the argument that Verizon should not bother expanding its fixed network footprint, but home broadband is a relative growth area (at least in terms of growing market share). The ability to take market share from the leading cable TV firms (using fixed wireless for lower speed and fiber for higher speed accounts) clearly exists, but only if Verizon can acquire or build additional footprint outside its present core region.

And while it is possible for Verizon to cherry pick its “do it yourself” home broadband footprint outside of region, that approach does not offer immediate scale. Assuming all else works out, it might take Verizon five years to add an additional seven million or so FTTH passings outside of the current region. 

There is a value to revenue Verizon can add from day one, rather than building gradually over five years.

Many Consumers Will Always Buy "Good Enough Value" Home Broadband

Some question the long-term viability of 5G fixed wireless services, arguing that, eventually, it will prove unable to compete with ever-higher capacities supplied by cabled networks, especially fiber to home platforms. 

Supporters might make the case that “eventually” is the key phrase, as the market potential for fixed wireless between “today” and “tomorrow” is likely to be quite extended. At the moment, perhaps 51 percent or 52 percent of all U.S. homes or dwelling units have service available from at least one provider. 

By 2030 that percentage might increase to 76 percent to 80 percent. 

At the moment, perhaps 10 percent to 15 percent of U.S. homes have FTTH service available from at least two providers, growing to possibly 30 percent to 40 percent by 2030. 

For starters, FTTH is expensive enough that no single service provider can afford to build new networks ubiquitously, even if the customer demand is present. By some estimates, the cost to pass one urban home might be just $1,000, but the cost to pass suburban locations might range up to $3200, while rural passings can easily cost $7,000 or more. 

Area Type	Density	Estimated Cost per Home/Passing
Metropolitan	High	$1,000
Suburb (Flat Terrain)	Medium	$2,700
Suburb (Hilly Terrain)	Medium	$3,240
Rural (Flat Terrain)	Low	$6,300
Rural (Hilly)	Low	$7,000

And that is construction cost only, not including the cost to activate an account, which can add costs between $300 to $500 for each install. 

An equally-important issue is the take rate for such networks. It has been common for any new FTTH provider that is a telco to get up to 40 percent take rates over a few years, with initial uptake in the 20-percent range, often. Independent ISPs competing with both cable operators and a telco might expect take rates not exceeding 20 percent (where the cable operator can offer gigabit service and the telco does not offer FTTH). 

So the longer-term issue is how big the market might be for wireless service offering speeds in the lower ranges (100 Mbps to 200 Mbps now; undoubtedly higher speeds in the future), as more fiber access is available. To the extent that fixed wireless is taking market share from cable operators (perhaps even operators able to sell gigabit-per-second connections), we can infer that a substantial portion of the market is happy to pay the prevailing rates for access at such speeds, especially when able to bundle home broadband with their mobile access services. 

When comparing fixed wireless to either cable modem or FTTH service, many consumers might not be especially interested in services operating the 500-Mbps and faster ranges, much less gigabit ranges, when the slower speeds cost less. 

But demand will continue to shift over time, with most consumers eventually buying services operating faster than 200 Mbps, and in many instances much faster than 200 Mbps (gigabit to multi-gigabit ranges, for example). To be sure, fixed wireless providers are likely to find ways to increase their speed tiers as well, beyond 200 Mbps in the future, even if virtually all observers suggest wireless will continue to lag cabled networks in terms of speed. 

Speed Tier Take Rates, in Percentage	2023	2030	2040
Less than 100 Mbps	20-30	5-10	1-2
100 Mbps to 200 Mbps	30-40	10-20	5-10
Faster than 200 Mbps	30-40	70-80	85-90

Perhaps the best analogy is what cable operators have been able to do with their hybrid fiber coax networks, boosting speeds over time. 

Keep in mind that cable networks and FTTH networks back around 2000 were only offering top speeds in the 10-Mbps range. Fixed wireless networks also will be able to increase speeds over time, if never on the scale of cabled networks. 

Year	Typical Cable Operator Maximum Speed
1996	1.5 Mbps
Early 2000s	10 Mbps
Late 2000s	50 Mbps
2010	100 Mbps
2015	300 Mbps
2016	1 Gbps
2024	2 Gbps

But absolute ability to match cabled network speeds is not the question. The issue is what percentage of customers will, in the future, be willing to buy fixed wireless home broadband, at then-prevailing speeds, prices and offers. 

Telcos Poised for Historic Home Broadband Market Share Gains

At least some observers believe the traditional U.S. home broadband market share pattern could be quite different by 2030, though there might be some disagreement about shares held by various ISPs (cable, telco, independent providers). Historically, U.S. cable operators have held as much as 70-percent share of the home broadband market. But that seems unlikely--perhaps impossible--to sustain.

Perhaps the single biggest change could be a shift of share in favor of telcos, using both the fiber-to-home and wireless platforms. Many observers would not be surprised to see a major telco-cable share of about 40 percent each, with others holding the remaining share.

That 20-percent share would be held by ndependent ISPs and smaller telcos.

Traditionally, U.S. cable operators have held about 65 percent to 70 percent share of the market. By some estimates, telcos collectively have held 20 percent to 30 percent share, with satellite, fixed wireless and independent providers having single-digit shares. 

Most observers expect change, the only disagreement being the degree of share to be lost by cable operators and the share to be gained by telcos and other providers. 

source: GlobalData 

Also, some forecasts that look at technology (optical fiber, hybrid fiber coax, fixed wireless, satellite) often obscure the fact that telcos use both optical fiber, fixed wireless and digital subscriber line technologies. 

So a forecast of 20 percent to 25 percent “telco” market share in 2030 might not include all telco FTTH share or fixed wireless (largely provided by the big telcos T-Mobile, Verizon and AT&T. In principle, telcos might have 35 percent to 45 percent share in 2030, based only on use of fixed wireless, DSL and FTTH shares held by Verizon, T-Mobile and AT&T. Other telcos also will have some share (Lumen Technologies, Frontier, others). 

Provider Category	Estimated Market Share in 2023	Expected Market Share in 2030
Cable Companies (Comcast, Charter, Cox, etc.)	45-50%	35-40%
Major telcos (AT&T, Verizon)	25-30%	20-25%
Satellite Providers (Dish, Viasat)	5-10%	3-5%
Fiber Optic Providers (Google Fiber, Frontier, municipal providers)	5-10%	25-30%
Fixed Wireless Access (FWA) (T-Mobile, Verizon, AT&T)	5-10%	15-20%

The point is that it remains likely that telcos and cable operators will continue to hold most of the share (perhaps 70 percent to 85 percent or more), with independent providers gaining share. 

As capital intensive as fiber to the home remains, independent and smaller providers cannot hope to reach significant portions of the U.S. home broadband market very quickly, especially given the fact that, in most markets, up to 96 percent of existing share is held by the incumbent telco and cable operator. 

Even if one discounts the local telco’s ability to respond to a new fiber overbuilder market entry, the new FTTH provider will often face an incumbent cable operator able to offer gigabit-per-second downstream speeds. 

Provider Type	2023 Market Share	Discussion
Cable	~70%	Among cable operators and wireless companies controlling 96% of the U.S. home broadband market, MSOs (cable companies) accounted for nearly 70% market share
Telco	~26%	Estimated based on cable's 70% share of the 96% controlled by cable and telcos
Other	~4%	Includes independent ISPs, fixed wireless, and other providers