New Administration Plans on Spending $1.5 Trillion on Broadband Infrastructure

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Jonathan SpalterThe Trump Administration is talking about spending up to about $1.5 trillion in broadband infrastructure, says USTelecom President/CEO Jonathan Spalter. Quoting incoming FCC Chairman Ajit Pai about the need to address the digital divide, Spalter challenged panelists at a broadband panel conducted by the association Thursday at the National Press Club, saying: “Translating the IoT into the infrastructure of things will take strong policy at all levels of government.”

Former FCC Commissioner Kathleen Abernathy, who’s now EVP of Frontier Communications, said “at a minimum” telcos should start “working within the Universal Service framework because time matters.” Municipalities believe they’ll get broadband right away because of government funding but it doesn’t happen quickly, she said.

“It takes a couple of years…if you start looking at things like tax credits, then Congress gets involved.” Working with an existing program to fund development saves time. On the flip side however she cautioned when working with a big government program, “there will be waste. You’re constantly avoiding the pressures of waste, fraud and abuse.”  

Abernathy’s company has done public-private partnerships, which is faster than waiting for a major bill to get through Congress.

However everyone struggles with the economics involved in getting fiber or broadband to the last mile, especially in rural areas. In places where there is no competition “the economics are rotten. You cannot build and deploy at speeds people want for what the customer is willing to pay,” she said, adding “Your only source of revenue is the customer,” who is likely to be economically challenged in rural areas.    

Smart City President/CEO Marty Rubin said that dynamic is why his company is now in more urban areas, because the deployment economics “just weren’t there in rural areas.”

“You’d have a rude awakening in terms of take rates for rural areas. They just wouldn’t pay” the same rates as customers in urban areas, he said. Smart cities also struggled with getting approvals for things like pole attachments with rural municipalities. It’s harder to get things done in rural markets versus urban ones, Rubin said.

January 27, 2017

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