Despite billions in federal subsidies over more than a decade, many rural areas still await broadband internet

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"The U.S. government has spent billions of dollars on several rounds of programs to upgrade internet speeds in rural areas over the past decade. Despite those efforts, many residents are still stuck with service that isn’t fast enough to do video calls or stream movies—speeds that most take for granted," Ryan Tracy and Anthony DeBarros report for The Wall Street Journal. "Many communities have been targeted for broadband upgrades at least twice already, but flaws in the programs’ design have left residents wanting."

The Journal analyzed 1.4 million mostly rural census blocks included in nationwide Federal Communications Commission broadband programs over the past decade. The latest one, 2020's Rural Digital Opportunity Fund, awarded internet service providers the right to build out broadband in about 750,000 census blocks. "The Journal's analysis found that more than half of those census blocks—areas with a combined population of 5.3 million people—had been fully or partially covered by at least one previous federal broadband program," Tracy and DeBarros report.

About 70 percent of households with no access to broadband internet are rural, according to a 2019 study by the Purdue Center for Regional Development. That's about 4.8 million people in 2.2 million housing units who don't have internet with speeds of at least 25 megabits per second for download and 3 Mbps upload, according to data submitted by internet service providers.

The FCC launched the Connect America Fund in 2012, awarding bids to telecommunications companies to build out rural broadband that met minimum speeds of 10 megabytes per second for download and 1 Mbps for upload. But big telcos won most of the contracts, and installed relatively cheap and slow digital-subscriber-line service instead of cable or fiber-optic networks and pocketed the difference. DSL met the minimum download speed of 10 Mbps; after major pressure, the FCC increased the definition of broadband to 25 Mbps upload and 3 Mbps upload, or 25/3.

"It’s not surprising that companies made a business decision to do the bare minimum," Carol Mattey, an industry consultant and former senior FCC official, told the Journal.

"In an effort to upgrade as many people as possible with limited funds, the FCC chose to subsidize incremental improvements," Tracy and DeBarros report. "Many of those upgrades quickly became outdated as technology advanced and consumers wanted faster speeds. In other cases, internet providers were allowed to pick which customers to upgrade. This helped ensure companies would participate. It also meant they could take public money while leaving pockets of homes and businesses without access."

The Journal uses Heavener, Okla., a community of 3,000, to illustrate how rural people get left behind even after federal funds are spent to give them broadband access. Many parts of Heavener and surrounding areas have been covered by three different broadband programs over the past decade.

In 2012, Windstream Holdings Inc. won $716,782 to make broadband upgrades in the county. The company installed fiber-optic on a major highway leading into town, but used DSL for the "last mile" connection to homes—something local homes already had, Tracy and DeBarros report. Windstream said moving the fiber line closer to their homes should have improved speeds, but locals said they didn't see any improvement. Later, the company installed a radio tower nearby that delivered wireless broadband to some homes, but many homes couldn't access that, and the speed was still far slower than fiber.

Windstream got another $7.8 million between 2015 and 2021 for broadband buildout, but "FCC rules for those funds didn’t oblige Windstream to serve every customer equally, as long as it served a minimum number of locations statewide," Tracy and DeBarros report. "The company said the money covered roughly half of its operating and capital expenses in very high cost areas of the state where it might not be profitable to offer service without subsidies. It said it exceeded the terms of the FCC program by providing 10/1 Mbps service to more than the minimum required locations."

Heavener residents told the Journal that lack of broadband in the early days of the pandemic made work and schooling nearly impossible for many.

Newer funding might have better results. The infrastructure bill passed in 2021 included $42.5 billion for rural broadband. "Companies taking those funds will have to provide service at faster speeds than previous federal programs, and the money will come through states instead of the FCC," Tracy and DeBarros report. "Officials said they hope that will help identify which areas are most in need and which providers can best serve them."