The distribution of billions of dollars in U.S. federal funds towards broadband infrastructure has begun. Ciena’s Mitch Simcoe highlights one non-traditional segment that has secured a noticeable share of funding.
It has now been almost two years since the announcement of a $1.2 trillion infrastructure bill in 2021 with the allocation of $65 billion towards broadband infrastructure to help bridge the digital divide. There have been several announcements in the last few months related to the distribution of these funds, and we’re finally off to the races with some of the money starting to flow.
The first was the finalization of the FCC broadband maps at the end of June which divvied up the $42.5B of BEAD funding to the states. As you can see below, Texas was the big winner with 8% of the funding pot. Overall, the states with the largest allocations generally came from the central and southeast US. Each state will now have to submit their plans on how they intend to use this funding to fill the broadband gaps in their individual states.
Figure 1 - BEAD Allocation by State (Source: Ciena analysis)
The second major funding announcement was focused on the middle mile, which is key infrastructure for connecting rural communities to the internet.
The NTIA awarded $930M in funding out of a total of $1.77B in projects for their Middle Mile funding program. A total of 34 organizations received funding (out of 235 applications). As you can see below in Figure 2, quite a variety of organizations are receiving funding to build out the middle-mile network in their respective states.
Figure 2 – Allocation of Middle Mile Funding by Segment (Source: Ciena analysis)
A new approach to the middle mile
One non-traditional segment that has secured a noticeable share of funding is utilities, who can capitalize on their existing power infrastructure and power corridor right of ways to significantly cut the typical construction cost for building out a middle-mile network. In fact, the Fiber Broadband Association notes that rural electric co-ops are the fastest-growing cohort of broadband providers in the US.
An example of this dynamic in action is seen with Diamond State Networks (DSN), an Arkansas-based wholesale broadband provider. DSN’s members consist of an association of 13 utility co-operatives across the state who banded together to build a middle-mile network even before the middle-mile federal program was announced.
The leaders of the utility co-ops in Arkansas formed Diamond State Networks to capitalize on their existing power infrastructure to deliver a new statewide middle-mile fiber network that its members can use to deliver reliable, affordable connectivity across the state so communities can thrive economically and socially.
With this goal in mind, DSN chose to build a carrier-grade statewide middle-mile fiber network supported by Ciena’s 6500 DWDM backbone network equipment. This architecture enables DSN to turn up 400G and 800G wavelengths rapidly and securely, and to adapt to changing service requirements in real time.
Calculating your middle-mile needs with confidence
Some prospective middle-mile builders may ask why do they need N x 100G of capacity from their rural communities back to one or more internet PoPs in their state. We looked at this in-depth with consultant firm ACG Research, who developed a model for the average bandwidth that is required in the middle mile with a mix of applications. The conclusion from the study was that over five years, multiple 100Gs of middle-mile capacity would be needed to support a rural community of even 20,000 households.