U.S.-based broadband service providers spent at least $86 billion on their networks in 2021, a figure up 8.3% from the $79.4 billion invested in 2020 alone and more than $5 billion above the $80.8 billion spent in 2019, according to USTelecom’s 2021 Broadband Capex Report released this week.
In fact, the 2021 investment total represents the most money invested by U.S. broadband providers in their networks in the previous 20 years. In the halcyon days of 2001, broadband operators poured $111.5 billion into their networks. The most ever invested in a single year to date happened in 2000, with a whopping $118.1 billion.
The money invested during 2021 came as the U.S. federal government and state governments were awarding millions in grants to municipalities for broadband purposes, and at a time when Congress approved the $42.5 Broadband Equity Access and Deployment (BEAD) to increase the flow of government dollars over the next four years.
“While this is an unprecedented government effort to bring broadband to all in America, particularly those in hard-to-reach places, the BEAD investment is less than half of what the industry invested last year alone,” stated USTelecom President and CEO Jonathan Spalter, in a blog post.
Aside from the USTelecom report, Ciena CTO Stephen Alexander recently spoke with Fierce Telecom via email about the role of government funding in ramping up broadband networks and the importance of service providers continuing to be aggressive with their own investment.
He noted that while a handful of states recently were awarded funds through the pandemic-related America’s Rescue Plan (ARP), it still may “take a while for government investment to reach other states across the US. A concerted effort from companies across the telecoms sector is now required to reach those most at risk of being left behind as quickly as possible.”
In fact, ARP is not strictly a broadband program, as the money can be funneled toward an array of issues. BEAD could be a key program for network funding, but getting investment int the right areas remains a challenging process. Alexander pointed out that the Federal Communications Commission still needs to update its maps on which census blocks are considered unserved and underserved, and that process will not be finished until at least the end of 2022.
“There are various policies or funding pots that can be used to extend connectivity, so it may be a case that service providers - particularly smaller regional ones - need to combine sources of funding,” he said. “These policies and funding options ultimately show that when it comes to connecting the unconnected, everyone’s heart is in the right place, so now we need to make sure the network is in the right place, too.”
Alexander continued, “Service providers can take advantage of being early movers and building customer loyalty by delivering a service we all rely on so heavily. Delivering high performance connectivity to a new area for the first time can transform that community’s potential, creating new jobs and attracting new residents and businesses. Making investments in software and automation will lower the cost for service providers to extend networks to the degree that the average revenue per user in rural areas relative to the cost of deploying the network will become a lot more attractive.”
He also said that more ecosystem collaboration and strategies like infrastructure sharing “alongside further investment in software and automation will lower the cost for service providers to extend networks and deliver affordable services to under-connected communities. Every technology leader should now be asking themselves if there’s anything more that they can do to help level-up connectivity across the nation.”