The U.S. government just dished out $930 million in support for middle mile broadband projects, but a pair of experts told Fierce there’s demand for billions in additional funding. Both noted states could be the next big source of support as they work out how to divvy up their newly allocated Broadband, Equity, Access and Deployment (BEAD) allotments.
Zayo was one of the big winners in the National Telecommunications and Information Administration’s (NTIA) recent award round for the Enabling Middle Mile Broadband Infrastructure Program, scooping up nearly $93 million for three projects. It was also one of the only big-name providers to win.
Bill Long, Zayo’s chief product officer, told Fierce that the projects it won grants for are undertakings it has been wanting to tackle for a long time but couldn’t because the business case just wasn’t there.
The grants will allow it to both augment its long-haul network but also provide breakout connectivity along both its new and existing routes from Dallas to Atlanta, Dallas to El Paso and Oregon to Nevada via northern California.
Breakout connectivity requires special equipment and enables providers like Zayo to supply dark fiber, wavelengths and other high-bandwidth services to local internet service providers looking to provide last mile connectivity to homes in a given area. When looking at whether such projects are feasible, Long said instead of examining factors like the number of homes passed like last mile providers do, Zayo looks at the number of homes served specifically by the ISPs it would be selling its services to.
“Without these grants it was never going to pay back,” he said.
Long added “There are a lot of interesting routes we’re looking at that we’re having a hard time penciling in that traverse underserved communities. There’s one route I’m thinking of in particular that if we could get government funding for we would go and build it tomorrow and it serves a wide swath of communities that have a wide digital divide.”
He noted though, that such long-haul middle mile projects can cost hundreds of millions of dollars. That’s not exactly great news when there’s $70 million left in the NTIA’s Middle Mile funding pot. And Zayo isn’t the only one looking for more government backing. The NTIA noted it received applications for the $1 billion Middle Mile program requesting a total of nearly $7.5 billion.
State prerogative
Brian Mefford, VP of Broadband Strategy at network management software company VETRO, said there’s still hope more funding could be on the way. VETRO is working with a number of states on middle mile projects, including California.
“We did hear from NTIA who were telling state leaders ‘Just because you don’t win an award in this first billion, don’t lose hope. Plan to submit something as part of your BEAD proposal.’ So, I think there’s still a lot more middle mile investment to come,” he said.
Long also pointed to state BEAD projects as another potential source of funding. Under BEAD rules, states can support the deployment of middle mile infrastructure where it’s needed to reach unserved homes with last mile connections.
“Having redundant access or more convenient access to middle mile is going to make the overall network costs come down. In a lot of cases it comes down by a factor…so on a per megabit cost you’re moving a decimal point to the left,” Mefford said. “So from a sustainability standpoint, we should all want to see this major national investment undergirded by affordable access to middle mile network too.”
The power is now in the hands of the states, which earlier this week found out how much the NTIA has allocated them from the $42.5 billion BEAD program. Texas received the largest chunk of change, with $3.31 billion, followed by California ($1.86 billion), Missouri ($1.74 billion), Michigan ($1.56 billion) and North Carolina ($1.53 billion).
“We’re not done with seeing the NTIA invest in or encourage states to invest in middle mile,” Mefford concluded. “Those projects in some cases have started and there were applications to complete the middle mile project. They’re sort of mature proposals we can imagine that will probably get rolled into the BEAD applications now.”