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Montana broadband build-out comes with $300,000 price tag per home

Providing high-speed Internet connections to rural parts of the country could be more expensive than federal officials previously thought.

Providing high-speed Internet connections to rural parts of the country could be more expensive than federal officials previously thought.

It could cost as much as $300,000 per dwelling to connect homes and businesses to high-speed Internet lines in rural parts of Montana, according to a new report published on Tuesday.

The figure was attributed to a state official and relayed by the Wall Street Journal as part of a news article examining the high cost of broadband build-out in remote parts of the country.

The costs associated with laying down fiber lines and other types of broadband infrastructure could ultimately exceed the more than $60 billion earmarked by federal officials as part of the “Internet for All” program, an initiative promoted by the Biden administration as one key way to connect underserved parts of the country with high-speed connections.

The program is part of the broader Infrastructure Investment and Jobs Act that passed both chambers of Congress last year and which was signed into law by President Joe Biden around the same time. The $1 billion federal package provides grants for broadband build-out under the Internet for All initiative, but largely leaves it up to state and local governments to apply for grant money and figure out how to spend it.

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Now, some local officials are worried that not enough money will be allocated to truly have a meaningful impact in some of the most-remote parts of the country — areas with a high concentration of rural and tribal residents who, unlike city dwellers, often have few options available for Internet connection at all.

In Nebraska, there are plans to bring high-speed, fiber-based Internet connections to residents and businesses on the Winnebago Tribe reservation, but it will come at a cost of nearly $53,000 per dwelling connected, the Journal said in its story. In some cases, the cost of providing high-speed hook-ups exceeds the property value of the homes and businesses there, the Journal said.

Government officials say the investment is worth it, because it will elevate residents and businesses in rural areas in a way that will help them better compete for jobs and other opportunities compared to suburban and urban residents. Among other things, high-speed broadband lines can help better connect residents to telecommuting opportunities, allows telecommunications firms to upgrade land-based and wireless networks, and enable businesses to utilize Internet-based technologies to improve their goods and services.

“Ultimately, there is a lot of good that will come from the infrastructure that we are building,” Alan Davidson, the administrator of the National Telecommunications and Information Administration, told the Journal in an interview.

But others wonder if the money would be better appropriated toward connecting the largest number of families and businesses at the lowest possible price. They point to complexities involved in laying fiber lines across some rural areas, which can bring with it various environmental and logistical challenges.

Even some groups who have accepted federal funds to build out broadband in remote areas say they might think twice before participating in a similar initiative in the future. In rural Montana, Blackfoot Communications is building two fiber networks that were supposed to be bankrolled by different federal grant programs — one operated by the Federal Communications Commission (FCC), and the other by the U.S. Department of Agriculture (USDA).

The FCC’s program is designed to give taxpayers the most bang for their buck, but Blackfoot CEO Jason Williams told the Journal that both projects are going to involve the company putting forward some of its own money to get the networks completed.

“It’s going to be draining on us financially,” Williams said, though he affirmed Blackfoot was committed to the projects.

Affordable Connectivity Program

In addition to the broadband grants, the federal government is funding and promoting a program that offers low-cost Internet service to those who are financially challenged.

The Affordable Connectivity Program (ACP) offers a $30 per month subsidy on land-based broadband Internet or wireless phone and data service, and counts Altice (Optimum), AT&T, Charter (Spectrum), Consolidated Communications, Comcast (Xfinity), T-Mobile and Verizon among its partners. The subsidy is $75 per month for residents of Tribal lands.

Residents must apply for the ACP, and demonstrate that they are enrolled in a federal or state benefits program or are otherwise eligible for the program based on their overall income. The program also assists benefits recipients in purchasing a phone, tablet or laptop for use with the service.

Data released by the FCC shows the highest number of enrolled benefits recipients are coming from the most-populous states, with California, Texas and Florida on top. Less than one out of every five residents enrolled lives in a rural area, the data showed.

The ACP was funded through the same infrastructure improvement program that is also bankrolling the various federal broadband build-out initiatives. The bill allocated a little more than $14 billion to the ACP.

Analysts say the FCC is burning through that cash at a rate of more than $460 million each month, to include direct benefits paid to Internet service providers to offset the $30 (or $75) bill credit, as well as discounts on Internet-connected equipment like smartphones, hotspots and laptops.

If Congress does not pass new funding measures, the ACP stands to run out of cash by September 2024, according to a projection by the Institute for Local Self-Reliance (ILSR), a not-for-profit organization that works with municipal governments and small businesses on various self-reliance initiatives. That key date could be moved up as more people enroll in ACP, the ILSR says.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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