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State Capitol Week in Review – May 14, 2022

LITTLE ROCK – Arkansas is making a massive public investment to bring broadband access to every corner of the state.

Last year the state hired a consultant firm, Broadband Development Group (BDG), to develop a master plan.

The firm’s chief technical officer made a lengthy presentation to the legislative Joint Performance Review Committee.

BDG is recommending fiber optic technology, in spite of its potentially higher costs, because it would “future proof” the system.

In other words, it may be faster and cheaper to install wireless cells in rural areas, but the dramatically growing demand for high speed Internet would soon overburden the capacity of wireless systems, he said.

The demand for greater Internet capacity has been growing by 50 percent a year, he said. As networks build more capacity, telecommunications companies tend to offer products and services that require more capacity.

The new services include holographic displays, lengthy videos in high definition and real time telephone connections that include video as well as audio.

As broadband speed increases, new applications are developed that demand more speed and the circle creates its own momentum. Thus, a minimum standard for broadband capacity is a moving target.

Wireless is good for mobile phones and satellite connections in automobiles, but BDG’s mission is to recommend technology for households, the executive told legislators.

Nationally, the consensus is that a minimum speed of 100 megabits per second is a good household standard.

For a typical family, a minimum capacity of 100 Mbps would allow two children to do online schoolwork, to allow another family member to stream a show on a platform like Netflix and for another family member to attend a Zoom meeting, all at the same time.

A drawback to wireless is that new satellites are not in a stationary orbit above the earth. They are lower to the ground and move constantly. Satellite dishes must constantly search for the satellite that is moving overheard, and to do that the dish must have a clear view of the horizon. Trees and hills block signals, and in Arkansas there are lots of trees and hills, the executive said.

A current estimate of the cost is about $550 million. The federal government has several large grant programs ongoing. The most recent one is just getting underway. Rules will be written in June. It should provide $1 billion to Arkansas, he said.

The state will have to decide how best to subsidize installation of new fiber networks, for example, whether to award private companies a flat fee, such as 75 percent of project costs, or whether to guarantee a minimum rate of return on investment.

BDG recommended a detailed application process for Internet providers to follow if they wish to participate. It also recommended allowing a broad diversity of companies to apply, such as utilities, electric companies, municipalities, Internet service providers and cable networks.

Asked by a senator if it would be good to allow two or more providers to compete in a certain area, in order to increase options and enrollment, the BDG executive replied that “most people in the telecom business like having a monopoly, if they can.”


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