It’s clear in reading the various proposed BEAD rules that State Broadband Offices are following the lead of the NTIA and putting a lot of emphasis on making sure that everybody gets served with the grant funding. I’m not sure they understand the costly consequences of this emphasis. Let me use two real examples to highlight how hard this is going to be.

I was working with a County government that was providing an ARPA grant for ISPs to build fiber. The County and a cooperative were negotiating a grant that would bring broadband to about half of the unserved locations in the county. However, the proposed map from the cooperative left out a pocket of fifteen homes. The County really wanted these locations to be added to the grant because it was clear that after this grant that nobody else would likely consider building to this small pocket of folks.

The cooperative explained that the cost of getting to these few locations was astronomical and they didn’t want to ask for that much grant funding. This particular pocket has about every permitting issue you could imagine. The pocket is bounded on one side by an interstate highway and on the other by a major dual lane state highway. There are no exit ramps or underpasses nearby from either highway. There is also a railroad line that blocks getting to this area. Finally, the poles are in bad shape and this area is largely all rock. The cooperative said that it would cost over $60,000 per location to get fiber to these folks – and the County agreed that it was not willing to provide the needed funding.

This area could be served by a WISP, but there aren’t any WISPs serving close to this area today. Because of that, I’m not sure that building a new tower and figuring out backhaul would make any sense for these few locations. Would a distant WISP want to take on future truck rolls to this area?

I saw a similar situation in a rural county in New Mexico. There is an isolated part of a county with about one hundred passings that is far away from everybody else. This county has the extreme terrain you see on postcards of the West. The terrain is all rock and the utility poles are in bad condition. In many places there are no shoulders on either side of the winding roads. We figured the cost to bring fiber to this area is nearly $7 million (and that was calculated before the inflation of the last two years).

We instantly pivoted to see if fixed wireless made sense, but there are also a lot of impediments putting wireless in the area. It would require a whole string of towers to snake through the terrain, and there are major obstacles getting rights-of-way for constructing new towers because of the current use of the land. It also looks impossible to get electric power to the towers. Our estimate for building a wireless network was not much lower than the cost of building fiber.

I’m not sure that State Broadband Offices are braced for these extreme places. There are similar pockets of extremely high-cost areas in the majority of counties I’ve examined. When SBOs have budgeted the amount of money needed to get everywhere, I’m not sure they’ve built in the extreme examples where costs are $50,000 to $100,000 per passing, which can eat up a State’s BEAD money in a hurry.

The reason this is an issue is that the NTIA rules expect states to fund 100% of unserved locations – 99% coverage will be considered a failure. Serving these extreme locations has a priority over funding many more underserved locations and anchor institutions.

I don’t have an answer for this. If I was designing a grant program from scratch, I would probably conclude that super high-cost locations shouldn’t be funded unless there is excess grant funding – but the NTIA rules don’t leave any latitude for this decision.

These are the kind of places that would best be served by somebody like Starlink. But even Starlink doesn’t work for a lot of the homes in New Mexico that are nestled into rock cliffs. This leads me to conclude that there are some passings in the country that are largely unservable.

Many States are saying they don’t have enough funding to serve everybody, and when you consider that every state has some of these extremely high cost locations, it’s easy to believe them. Interestingly, a few states seems to be skirting this issue by only looking at the hardest-to-serve places after they’ve given grants for everybody else. I have to imagine that’s something that the NTIA will find fault with, but it’s the right approach to take.