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Posts tagged ‘rural broadband’

BREAKING: TIGC corrects an old math error, and it’s not good news

A couple of years ago I wrote a post on Georgia’s rural broadband efforts and swagged the likely cost of hardwiring the state’s unserved areas from the gnat line south at about a half-billion dollars.

In the interest of responsible journalism, I must now report that I was wrong.

Based on data now available from state and federal agencies, the cost of hardwiring unserved areas in the 100 Georgia counties that comprise Trouble in God’s Country’s Middle, Coastal and South Georgia regions will probably be in the neighborhood of $1.4 billion. Add the unserved areas in the northern half of the state and you’re looking at a total of about $2.3 billion.

In my defense, I was working with some fairly limited data when I took that first swing at ballparking the cost of wiring rural Georgia for broadband internet service. Basically, I combined some testimony to the House Rural Development Council — to the effect that it would cost about $40,000 a mile to wire rural Georgia — with county-level road-mile data from the Georgia Department of Transportation (GDOT), made some charitably conservative assumptions and came up with a figure in the neighborhood of $500 million.

Since then, a couple of things have happened that give us a stronger basis for estimating the real costs of hardwiring the state’s rural regions.

One was the creation of the Georgia Broadband Deployment Initiative (GBDI), which was spawned by the work of the House Rural Development Council and is now part of the Georgia Department of Community Affairs (DCA). One of its major accomplishments so far has been the development of what’s been billed as a first-of-its-kind map identifying parts of the state that are unserved by terrestrial internet service capable of delivering download speeds of at least 25 megabits per second (Mbps) and uploads of at least 3 Mbps.

The Georgia Broadband Deployment Initiative’s map showing areas with and without access to 25/3 Mbps broadband service. The darker gold areas have service, the lighter areas do not. For access to the live map, click here.

Study the GBDI map at right and you could be forgiven for thinking that about half of Georgia doesn’t have access to that level of internet service.

But that’s land mass. Extract the county-level data from the map and you might be surprised to learn that, even in most rural areas, a large majority of the GBDI “locations” already have access to 25/3 service. Statewide, GBDI puts the number of “unserved” locations at nearly 507,000 out of a total of just under 5 million locationsd, a little over 10 percent.

The problem is worse, of course, in rural Georgia. Nearly 312,000 of the state’s unserved locations are in the 100 counties that comprise TIGC’s Middle, Coastal and South Georgia counties — 17.4 percent of the total locations in those counties. In contrast, only about 1.5 percent of the locations in TIGC’s 12 Metro Atlanta counties are unserved.

So that gives us a sense of the magnitude of the task. Now to the question of cost.

Thanks to a new program funded by Congress in 2019 and run by the U.S. Department of Agriculture (USDA), we’ve now got a pretty good baseline to use in projecting what this is going to cost. Dubbed ReConnect, the USDA program is now in its second year of operation and has funded 75 projects that are supposed to provide at least 25/3 Mbps service to more than 168,000 locations across the country at a total cost (including local matching funds) of more than $760 million.

Here in Georgia, there have been four awards so far. Independent telephone companies in Ellijay, Darien, Pembroke and, most recently, parts of three west Georgia counties (Carroll, Heard and Troup) are now plowing a combined total of $27.1 million into providing 25/3 service to a grand total of 6,159 locations.

That works out to $4,404 per location, which is actually a little better than the national ReConnect average of just over $4,500 per location.

The obvious follow-up question here is whether it’s worth that kind of cost to wire unserved areas of rural Georgia, especially those in serious, sustained decline.

First, let’s acknowledge the obvious. Access to broadband internet service is essential to modern life, no matter where you live. It is the latter-day equivalent of electricity and telephone service, and both were supported by an array of public policies and funding mechanisms designed to provide them to the broadest swath of the population possible. Somehow, the same principle should apply today.

But “somehow” is a big word, with a lot of wiggle room, and these are different times. Maybe private-sector players will eventually step into some rural areas that show signs of growth, but for the moment it seems they have decided it’s not worth their time or money to plow capital into rural areas that are poverty stricken and sparsely populated.

And while that puts the onus on the public sector, I would submit that, even there, it’s reasonable to have a discussion about what constitutes a prudent use of tax funds in areas that are losing population and suffering a long-running economic decline. At what point are we simply throwing good money after bad?

Take, for example, tiny Baker County, in deep southwest Georgia. Between 2013 and 2018, its population fell 7.7 percent, from 3,351 people to 3,092, according to the Census Bureau, and its annual Gross Domestic Product (GDP) shrunk 14.6 percent, from just under $108 million to less than $88 million, according to the U.S. Bureau of Economic Analysis (BEA).

According to the GBDI map, there are a total of 1,799 locations in the county, and only eight of them have access to 25/3 broadband. Based on the ReConnect cost data, it would cost right at $8 million to wire those 1,791 unserved buildings and provide service to just under 3,100 Georgians living in a county with a shrinking economy. Is that a good expenditure of public funds that are, by definition, coming out of somebody else’s pocket?

Altogether there are 21 small rural counties (population 30,000 or less) that saw both their populations and their economies shrink in the five years from 2013 to 2018 — 20 from the gnat line south and one in northern Georgia. The GBDI map puts the number of unserved locations in those counties at 63,970; at the ReConnect average of $4,500 apiece, it would cost just under $288 million to wire all those locations.

I’m ordinarily pretty liberal when it comes to plowing public money into important infrastructure projects, but I’ll have to admit I’m struggling to see even a publc-sector business case for investing this kind of state or federal money in areas that are shedding population and economic activity.

This is not to write off Baker County or its similarly-distressed rural Georgia cousins, let alone the citizens who live there, but it is to suggest that their problems require a multi-faceted response. Spending millions on high-speed broadband won’t do any good if there’s nobody left to use it.

(c) Trouble in God’s Country 2020

Coming to Rural Georgia from Outer Space: Broadband Internet Service

I’ve been arguing pretty much since the rural broadband craze started that we’d be nuts to plow probably at least a billion tax dollars — most of it from Metro Atlanta — into running fiber to Georgia’s most sparsely populated counties.

Give the private sector and advancing technology time, I’ve felt, and we’ll probably get a better solution long before the state could plow up all the red clay in rural Georgia and put fiber in the ground.

Satellite-based internet has been around for years, although one of the legitimate raps on its potential as a consumer solution has been speed: the satellites are so far above the Earth that it takes a while for the signal to bounce back and forth.

Well, now comes SpaceX with the launch of 60 low-orbit satellites designed to solve that problem:

Per the New York Times’s story, these new satellites will orbit the planet at a much lower altitude than the current 22,000 miles: “The Starlink satellites will orbit much lower — between 210 and 710 miles above the surface. That reduces the lagginess, or latency. SpaceX has said performance should be comparable to ground-based cable and optical fiber networks that carry most internet traffic today. Starlink would provide high-speed internet to parts of the world that currently are largely cut off from the modern digital world.”

The Times’s story indicates it’ll take nearly 2,000 of these low-orbit satellites to blanket the planet, but my hunch is SpaceX will get that done long before the State of Georgia could hardwire rural Georgia — and we won’t have to pay for it.

R.I.P., House Bill 887. We hardly knew ye.

Well, that didn’t take long.

House Bill 887, the Georgia Communications Services Tax Act, seems to have pretty much crashed and burned within days of being introduced, per today’s AJC.

From the story, by state capitol reporter Mark Niesse:

What’s left of the legislation is a policy for rural internet expansion without any funding.

The latest version of HB 887, which shrunk from 46 pages to 16 pages Thursday, would allow local electric membership corporations to provide internet services, reduce fees EMCs can charge for internet providers to use their poles and set a policy for rural communities to qualify for potential future grant funding.

This is probably a better starting point for the rural broadband discussion anyway.  More news as it develops.



The real problem with HB 887: it starts in the wrong place

Yesterday I posted an initial piece dissecting some of the mechanics of House Bill 887, the Georgia Communications Services Tax Act, and said I’d loop back for a second swing at “the real problem” with the bill.  Here goes.

The real problem is that it proposes to serve the wrong areas – or at least the wrong areas first.  Specifically, it says that the first three rounds of state grants to be made under the proposed “Georgia Reverse Auction Broadband Deployment Program” should go to “unserved” areas.

That sounds natural enough until you actually think about it.  There’s a reason those areas are unserved.  There’s hardly anybody there.  If there were, AT&T, Comcast and other telecom and cable providers would already be investing their own capital in sparsely populated rural counties.  At this point, no amount of publicly-funded broadband (which, by the way, would be paid for primarily Metro Atlanta taxpayers under the current bill) would do much to address the basic problems faced by Georgia’s poorest, least-educated and sickest communities.

In most of my Trouble in God’s Country research and writing, I’ve tried to stick to data analysis and avoid editorial commentary.  In various presentations, though, I’ve ventured an unpopular opinion that I’ll repeat here: we’re already into a triage situation in much of rural Georgia, especially from the gnat line south.  With some communities, it’s time to give them a toe tag and stop throwing good money after bad.

Which is not to say our state government should abandon these areas altogether.  One of my reasons for pursuing my Trouble in God’s Country research is that I believe the continued decline and deterioration of rural Georgia will simply become an ever-larger albatross around the neck of the state and, inevitably, Metro Atlanta.  Better to address the problems now rather than let them fester.

So I applauded the creation of the House Rural Development Council and their efforts over the past nine months.  I just think they got to the wrong conclusion, at least on rural broadband, and that by trying to tackle the “unserved” areas first, they’re starting at the wrong end of the problem chain.

The better starting point, in my view, would be the state’s regional cities – Macon, Rome, Augusta, Savannah, and Columbus, et al.  With just a few exceptions these communities are relatively stagnant or in various states of decline and deterioration.  Albany, once a very vibrant South Georgia city, now ranks as one of the 10 most “distressed” small-to-mid-sized cities in America – right behind Flint, Mich., in the 2017 Distressed Communities Index published by the Economic Innovation Group.  If these trends are allowed to continue – if these regional cities are essentially allowed to fail – then the collapse of the rural areas surrounding them will only accelerate.

My own politics on this kind of thing are pretty liberal.  I don’t have a philosophical problem with spending public money on big problems like this.  I don’t even object to Metro Atlanta tax dollars being diverted to address out-state problems.  I think it’s in Metro Atlanta’s interest to invest in other areas of the state and, in particular, to help revitalize and reinvigorate the regional cities.  I don’t know exactly how to do that, but if the decay continues, sooner or later – and probably sooner – Macon’s problems will begin to wash up on Metro Atlanta’s doorstep.

Further, economic development doesn’t have to be a zero sum game.  As I told the AJC’s Bill Torpy last week, Metro Atlanta has morphed into something like an intergalactic black hole that is pulling in the vast majority of the state’s economic prowess and educational muscle.  As the region continues to expand, it seems to me it ought to be possible to develop what amount to colonization strategies aimed at purposefully deploying more of that economic and educational strength to satellite cities that are increasingly being pulled into Atlanta’s orbit: Macon, Columbus, Carrollton, Rome, Gainesville, Athens, etc.  Working with those cities to help beef up their industrial and technological infrastructures – and their human capital – should be a win for them as well as Metro Atlanta.

One of the ideas that came out of the House Rural Development Council was to give tax credits to affluent Georgians to move to rural Georgia – in other words, to literally use tax dollars to pay people to move to those areas.  That proposal was apparently strangled in its legislative crib, and appropriately so.

But finding ways to create targeted incentives for people – and businesses – to move to the regional cities might actually make sense.  To that point, so might an effort to modernize the state’s job tax credit program.  For years now, Georgia (like many other states) has maintained a job tax credit program aimed primarily at providing incentives for businesses to create jobs in the state’s poorest counties.  The Georgia Department of Community Affairs, which administers the program, puts 71 counties in that poorest group of counties; go into, say, Mitchell County and create just two jobs and the state will give you $8,000 in tax credits for up to four years against your Georgia corporate income tax.  At the other end of the spectrum, to get a job tax credit in Forsyth or Gwinnett counties, you’d have to create at least 25 jobs, and the tax credit per job would only be $1,250.  (And, yes, that means folks in Forsyth and Gwinnett counties are helping subsidize job creation in Mitchell County.)

Frankly, I’m not sure two new jobs in Mitchell County is worth $36,000 in state tax breaks.  But the establishment of a new software engineering company and the creation of a couple of dozen or so high-skilled jobs in Rome or Macon or Gainesville might be worth a good bit more than that – especially if the local governments put some skin in the game and, as part of the effort, make meaningful commitments to supporting the rural communities surrounding them.

As I’ve said before, these are tough nuts to crack and I don’t have all the answers.  But I’m pretty sure that plowing millions of dollars into rural broadband – at least right now – isn’t one of them.