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The True Cost of Rural Broadband

FCC internet subsidy will cover just 20% of cost in rural Ohio. Will it be enough?

The Year of the Zoom Meeting has made one thing abundantly clear. If you don’t have high speed internet, you can’t participate in the post-COVID economy: your kids can’t attend school, your parents can’t meet with their doctors, and you can’t to go to work.

In rural Ohio, this disconnect is not hypothetical. It is all too real.

“The need is staggering,” says Misty Crosby, executive director of the Buckeye Hills Regional Council (BHRC). “Many families can barely get cell service at home, let alone broadband.” As a stopgap, some school districts have taken to loaning hotspots to students, while others have resorted to identifying parking lots where students can use wi-fi to work from a vehicle.

Help appears to be on the way. In December 2020, the FCC auctioned off $10 billion in subsidies through its Rural Digital Opportunity Fund (RDOF) to encourage internet providers to bring high speed internet to rural America. Funding was available to offset up to 60% of the cost to build and operate a profitable fiber broadband network in the region; however aggressive bidding drove Ohio’s subsidy to just 20%.

According to comments filed with the FCC by Reid Consulting Group (RCG) on behalf of the state of Ohio, winning bidders may be unable to meet their commitments with such a small subsidy.

“The FCC is very good at estimating costs,” says RCG director Tom Reid. “When they say that Ohio’s subsidy should be $4400 per household, they know what they are talking about. So how can anyone can deploy broadband for just $890 per household?”

To address this risk, BHRC has asked the FCC to reject any proposals that do not include a detailed path to financial sustainability during the Due Diligence phase of RDOF.

The full report can be found at ConnectingAppalachia.org

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