The earliest deployments funded through the BEAD rural broadband program are expected to begin no earlier than January 2024, according to a new report from Cartesian for provider association ACA Connects. At that point, there will be 4.7 million unserved and 2.7 million underserved locations for a total of 7.4 million “eligible” locations, according to Cartesian’s estimate.

Unserved locations are defined as those lacking reliable service at speeds of at least 25 Mbps downstream and 3 Mbps upstream. Underserved locations are those lacking reliable service at speeds of at least 100/20 Mbps.

The Cartesian analysis was based on the latest version of the FCC National Broadband Map, which was made available in May and based on broadband availability reported by providers as of December 31, 2022. Cartesian adjusted that data to reflect broadband buildouts expected to occur between now and January 2024.

In addition, researchers updated estimates of what it would cost to reach BEAD goals of making high-speed broadband available nationwide. Based on these estimates, the researchers continue to maintain that the BEAD program has sufficient funding to reach deployment goals.

The research also suggests that some states may be able to be more aggressive than others in targeting locations for fiber broadband, the preferred technology in the program.

Remaining Eligible Locations Are Costlier to Reach

According to the researchers, the latest FCC map shows that total “eligible” locations, including unserved and underserved locations, dropped from over 13 million on the previous version of the map to 12 million on the current version of the map. The number of unserved locations increased, and the number of underserved locations decreased.

Unsurprisingly, those deployments that have occurred since the previous version of the map have targeted locations that were less costly to reach. Accordingly, the average cost to serve an unserved location with fiber broadband (the preferred technology for the program) has increased and now stands at $13.1K, researchers said. The cost to serve an underserved location with fiber also has increased and now stands at about $10.8K.

Cartesian arrived at its estimate of 7.4K eligible locations as of January 2024 by deducting locations that have commitments to receive support from subsidy programs and expected incremental builds by providers.

BEAD Program: A Framework to Allocate Funding for Broadband Availability

High-cost Threshold is Key

While the BEAD program has a budget of $42.5 billion, the total amount that will be invested will be about $64 billion because providers are required to contribute matching funds, according to the report.

Although the requirement is for providers to chip in at least 25%, Cartesian believes providers will be willing to invest $3K per location, which will exceed the 25% mark in lower-cost areas.

Using the anticipated provider investment of $3K per location, Cartesian estimated a high-cost threshold of $9K. The threshold, to be set by each state, is the maximum amount that BEAD funding will cover.

Areas where the cost to deploy fiber would exceed the $12K available investment would be targeted to receive a different type of technology, most likely fixed wireless.

The researchers estimate that more than 70% of both unserved and underserved locations would fall below the $9K high-cost threshold. That’s a reality that suggests some states may want to consider setting their high-cost threshold higher than $9K to enable more unserved and underserved locations to obtain fiber broadband.

Telecompetitor asked whether there were any states where funding appears to be insufficient to reach deployment goals unless the high-cost threshold is set below $9K. An ACA Connects spokesman replied that with a $9K threshold, “Wisconsin is the only state that doesn’t reach 100% coverage. A lower threshold would lead to higher coverage there, but we didn’t explore this within the framework.”

The “framework” is another name for the report.

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