USDA Grants Demonstrate Need for Government Subsidies

Pile of money
(Image credit: Wikipedia)

Just why the government needs to subsidize universal broadband service was made clear in a press release Friday (Sept. 23) issued by Sens. Lisa Murkowski and Dan Sullivan, both Alaska Republicans trumpeting money their state got for high-speed internet.

The money came from the Agriculture Department's ReConnect Program, one of many broadband subsidy programs totaling tens of billions of dollars.

Alaska Telephone Co. got $33 million and Arctic Slope Telephone got $30.9 million. Alaska Telephone's money went to deploy fiber to the premises for 211 people and five businesses, while Arctic Slope's $30.9 million is being used to connect 476 people and 15 businesses.

Or put another way, it is costing over $90,000 dollars per sub or business to get high-speed access to rural Alaska.

USTelecom has said that one of the biggest roadblocks to universal service in rural communities is the cost of installing fiber to the premises. "[S]teep installation cost[s] can scuttle even the most optimistic business case for expanding broadband in sparsely populated regions," USTelecom said when arguing for "Dig Once" policies.

The Biden Administration clearly recognizes that the business case for rural service needs a boost from the big pockets of government/taxpayers, as do the Senators trumpeting their home state funds.

“It’s great to see the USDA continuing to award significant resources to assist with delivering high-speed internet access to rural Alaska—an essential component of 21st century infrastructure,” said Sen. Sullivan. ■

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.