Broadband Deployment Challenges

The main challenge RECs face when analyzing the financial feasibility of providing Internet service, is the cost of the infrastructure to connect between the data center and the premises of each community member. Many RECs consider deploying fiber, the ultimate BB connectivity media, although an analysis by Ericsson shows that deployment of fiber along one mile, costs around $21,000. This is a lot of money when considering community member homes are scattered over a wide, low-density area with few houses per mile (5 or less). Based on this information, the Return of Investment (ROI) for fiber deployment could take 10 years or more. More disturbing is the overall investment required when considering that a typical REC has over a few thousand members. This makes the ‘green light’ decision even harder in case there is an obligation to connect each member home while there is no committed service take rate.