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USTelecom Finds Broadband Coverage Improvement, but Much Left to Do

Randy Sukow Dec 5, 2018

The gap between rural and urban broadband internet coverage is narrowing, according to a new analysis from USTelecom. But there is plenty of gap left to close. The analysis, based on broadband availability figures as of mid-2017, comes as the FCC is likely to raise the budget for universal support to rate-of-return (ROR) telephone companies as a way to improve rural coverage.

“Governments should target support to specific areas where the economics do not support deployment or upgrades, and funding must be dedicated and direct, using a mechanism like the Connect America Fund,” USTelecom said in a blog post. “Policies must also be sufficiently flexible to allow for the most cost-effective solutions and must avoid funding wasteful overbuilding of existing facilities.”

The analysis focuses on rural-versus-urban availability of wired and fixed wireless broadband services. FCC Form 477 data is the basis for much of the analysis.  USTelecom admits it is “not perfect” but “the best available and the risk of overstatement is minimal at broad geographic levels of aggregation.” With that disclaimer, the association estimates that 92 percent of all Americans have access to fixed broadband service at 25 Mbps downstream/3 Mbps upstream. 25/3 could become the standard for both universal service and congressional reporting purposes after likely adoption of the ROR order later this month.

Breaking down the rural/urban difference, a substantial gap persists of 98 percent availability in non-rural areas and 70 availability in rural areas. Fixed wireless services improve rural availability somewhat. When subtracting homes served by fixed wireless, rural households served by wired technologies (fiber, DSL and cable modem) come to 65 percent.

USTelecom emphasizes that the gap “is not monolithic.” There are areas where no company provides 25 Mbps service or where there is only one provider. “Either demand, industry technology trends, or subsidies are not driving sufficient upgrades,” the analysis finds.

At the same time, more than 50 percent of rural areas covering about 11 percent of the U.S. population have two or more wired broadband providers. That is why the analysis calls for “targeted” distribution of universal service funds and avoiding funding for projects that would overbuild existing services.

The analysis focuses only on wired and fixed wireless technologies but predicts that mobile services might be important to future analyses. It notes that there were wireless-only telephone services in 56 percent of U.S. households by mid-2017. A similar transformation of the broadband market could occur as 5G mobile services roll out in coming years.

“In order to minimize distortions and inefficiencies, it will be critical for government to monitor developments in fixed-mobile broadband substitution and to adjust policy in a timely manner should the trend gain momentum,” USTelecom said.

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