Defining a Good, Realistic, Broadband Policy

The US may get funding from a proposed infrastructure package to “close the digital divide”. While this could be a boon for areas that lack good broadband services, these sorts of initiatives have been tried before, and some technologies have failed. Others may improve broadband based on current definitions of “good” quality, but have little chance of meeting future bandwidth standards. Finally, it’s obviously possible to set standards for quality broadband too high, or too low. What can be said about some ideas?

Light Reading offered a piece on improving broadband to rural areas, and there have been stories on AT&T’s opposition to having universal fiber included in a broadband infrastructure package. I’ve blogged several times about 5G mm-wave and even mobile 5G as a possible broadband technology solution to areas with limited services today, and on some of the challenges. I’ve also chatted with players who want to offer rural services, and vendors who want to help. It’s been interesting, but somewhat disheartening.

The first point is that I’ve found little awareness of the critical role that demand density plays in planning services in thin-demand areas. Imagine that you take ten miles of fiber and plop it down at random on the world’s landmass. If you hit Antarctica, you likely won’t find anyone living along the footprint of that fiber, so obviously there’s no profit to be made and nobody to serve. If you land in Singapore, you could find millions of dollars in network spending along your route, and other possible fiber landing sites will offer something in between.

Infrastructure pays back in proportion to the revenue that a given footprint will deliver from whatever lives or works within it. Where population density is low or household capacity to exploit broadband is limited, it will be a challenge to come up with a technology that can create a service footprint that’s not totally dependent on taxpayer subsidies. That’s important because I doubt that the government’s appetite for subsidization is limitless.

Another factor I’ve found isn’t generating much awareness is the risk of having a broadband subsidy end up creating toys for the wealthy at taxpayer expense. Let’s suppose there’s a fancy log home on the side of a lonely mountain in the west. The home cost millions, its owner is rich. Does a broadband subsidy fund fiber to this location, traversing perhaps tens or hundreds of miles of wilderness?

But the big problem I’ve seen is a lack of a vision of the service goal itself. We do need some standard for what constitutes broadband “right”, if we decide broadband is a right. AT&T, in their often-quoted and usually maligned view that 10 Mbps is fast enough for upload, is suggesting a standard, but is it a good one? As we’ll see, they’ve also suggested other numbers. If we were to say that 1G symmetrical was the standard instead, we’d be citing a broadband right that current broadband customers in most areas can’t even buy, and where they can, don’t elect to pay for. Even 100 Mbps may be more than you can really justify as a “right”, and setting a standard there limits technology choices.

I’m not going to argue public policy; let the wonks who specialize in that take that on. My point is that the characteristics of the service area and the definition of the service goal combine to set the requirements for a “useful” broadband technology. Whatever policy we elect to follow, it has to be grounded in these realities.

Wireline, meaning all services delivered over a physical media like copper, CATV, or fiber, has to be used to create a path from a point where there’s capacity to deliver, and each user. The further the users are from each other, the more difficult it is to do that economically. That’s the reason why we have under-served areas to begin with, and these areas are the ones I’ve characterized as having “low demand density”. If the service goal is set high enough, even to the 100 Mbps symmetrical goal that some lawmakers are proposing, it then becomes very difficult to achieve the goal if demand density falls far enough. Let me offer some model data.

If we take the demand density of the US as a whole as being 1.0, then we could say that where demand densities are on the order of 10, it’s possible to offer PON fiber, with the 100 Mbps symmetrical target, to about 80% of customers without significant subsidies. If you cut the demand density in half, the potential fiber penetration drops to about 65%. Cut it to 2.0 and things drop to 50%, and by the time you get down to a real rural level (0.1), only about 10% of users could be served with fiber without significant subsidies.

To put some sense to these numbers, Verizon’s territory has a demand density of nearly 11. AT&T’s has a demand density of about 1.3, there are only 12 states with demand densities higher than 5, 23 states with demand densities higher than 2, and 4 states with demand densities of 0.1 or less. It’s also generally true that the cost multiple for fiber service to those who cannot be served will rise from roughly 1.8x for demand densities of 10, to 24x for demand densities of 0.1, and as you drop from there, costs explode. This means, IMHO, that providing 100 Mbps symmetrical FTTH as a baseline service would not be feasible; the cost for fully serving users would be too high.

There are some caveats to this point. First, as demand density falls below 1.0, the way that the demand is distributed becomes critically important. Some rural areas have most of their population concentrated in small towns, and these towns are suitable for FTTH providing that the equipment cost is controlled. That’s likely the truth behind Adtran’s recent announcement of a thin-area FTTH cabinet. Second, where demand isn’t concentrated, satellite broadband may be the best solution, providing the service targets are adjusted to fit that service’s capabilities. If that becomes the presumed ultra-out-there solution, then the cost premium to serve the remainder of a low-density area would of course decline. My model says that for demand densities of 0.1 or less, fully two-thirds of users on the average would probably be served by satellite broadband at a reasonable cost, reducing the overall cost to connect them.

However, the service target of 100 Mbps symmetrical may have less impact that one might think. Obviously, it doesn’t matter too much for those users connected by fiber; the only value of lowering the service target is to qualify a technology other than fiber. CATV cable could meet a 100 Mbps download standard with reasonable costs, but there could be challenges with symmetrical service.

DSL, in my view, has little chance of meeting that 100 Mbps goal no matter how you maintained the loop plant; only shortening the loops drastically would help. You can’t do that in rural areas because population density is too low and you’d need to feed DSL from more cabinets than you can afford to connect. To make DSL work, you’d have to go to the AT&T suggestion of 25/3 Mbps. That would be about as far as DSL would go, and my model says that even that would be achievable on only about 60% of loops.

Deploying more fiber to nodes would be a better approach, providing you had a good way of getting the connection from the node to the home. This is where 5G could come in, but it’s difficult with the data generally available to determine exactly what the impact of either mm-wave or 5G mobile in a wireline replacement application might have. The problem is that the number of 5G nodes (towers, in effect) depends on the distribution of the prospective users, not just area demand density, because 5G mm-wave is short-range (likely maximum is 2 miles) and 5G mobile distribution would depend on getting a profitable number of users within the range of the tower. The maximum would be limited by the overall capacity of 5G at that point, of course, in combination with the selected service level.

That leads us to the last point that’s come out of my conversations. Everyone seems more interested in qualifying for subsidies than in delivering utility. Worse, as I’ve suggested already, it probably doesn’t matter. We cannot deliver broadband at a level that brings rural areas into what would even approach functional parity with dense geographies using DSL. The largest portion of the cost of providing new medium for broadband delivery is the cost of the installation, including of course the path from the nodal point to the customer. If DSL won’t work then new media is required, and unless we want to propose more subsidies than I believe are likely to be accepted, that means using RF for that node-to-customer connection.

RF doesn’t mean things like WiFi meshes, either. As rural density reduces, the space between users increases beyond WiFi range, and it’s not possible to mesh the sites through WiFi. Every user would have to be supported with a feed to their WiFi network, which puts you back where you started, without a way to create that feed economically.

This is a 5G problem to solve, if solution is to be had any time soon. It’s time we stop diddling on the topic and look at the situation realistically. It’s also time for those policy wonks to consider how much subsidy money will end up wasted if they don’t mandate something sensible, for a change.