Investment In Public Middle-Mile Infrastructure Is Imminent

Between the U.S. Treasury clarifying that American Rescue Plan (ARP) funds are eligible to be spent on middle-mile infrastructure and the U.S. Senate’s proposed infrastructure bill directing NTIA to establish a $1 billion grant program to support the deployment of middle-mile networks, federal assistance aiming to improve middle-mile access is imminent. 

Cities and states across the U.S. have already committed portions of their federal relief funds to boost access to middle-mile infrastructure. City officials of Brownsville, Texas approved a plan in July to use $19.5 million of ARP funds to construct a 95-mile-long middle-mile broadband network. In Suffolk, Virginia, city council members set aside $5 million of relief funds for the first phase of a regional project to construct an open access, middle-mile fiber ring. 

The Governor and State Legislature of California recently settled on a $3.25 billion agreement to build statewide public middle-mile infrastructure, “one of the largest state investments in public fiber in the history of the United States,” reports Ernesto Falcon for EFF.

The sudden surge in middle-mile investment may bring about confusion over what middle-mile infrastructure is and give rise to questions over the necessity of such investments. A new fact sheet from the California State Association of Counties (CSAC) clarifies commonly held misbeliefs about investing in public middle-mile infrastructure. Read CSAC’s new fact sheet here [pdf].

Investments in Public Middle-Mile Needed to Confront Monopolies

Upon State Governor Gavin Newsom introducing his plan for California’s statewide middle-mile network, opposition from AT&T and the cable industry attempted to reshape the proposal, proclaiming that it would be “overbuilding” or wasteful to spend federal money on public middle-mile infrastructure. Yet, as is explained in CSAC’s fact sheet, “‘Overbuilding’ is merely code for competition. Existing providers oppose a statewide, open access, middle-mile network because it would challenge the de facto monopolies that exist in nearly half the state by making it cheaper to build last-mile networks.”

Investing in public middle-mile infrastructure can be essential to create competition in broken markets. Public middle-mile infrastructure is often needed when existing fiber providers refuse to lease fiber on reasonable terms and is especially conducive to competition when it is open access and can be utilized by multiple providers to connect hard to reach communities. 

Though privately-owned middle-mile networks are common, private providers often do not make information on where those networks are located, what conditions they’re in, or what speeds they supply, publicly available, reports CSAC. In areas with an ISP monopoly - where a single ISP supplies the only middle-mile network available - the ISP tends to charge last-mile providers 6X more to connect to the monopoly middle-mile route than is charged to connect to routes where competitive choices exist, reports The Benton Institute. Constructing open access, middle-mile reduces discrepancies in the prices charged to last-mile providers, as public open access networks often commit to charging nondiscriminatory rates for access – charging larger providers the same rate as smaller providers.

A lack of affordable access to middle-mile infrastructure is a major impediment to broadband provision by non-incumbent providers. This is especially true in rural and Tribal regions, where access to middle-mile infrastructure is extremely limited. For small rural ISPs, building to connect to middle-mile infrastructure is often capital-intensive and comprises a major expense of building networks. For example, the presence of the MassBroadband 123 middle-mile network saved the town of Alford, Massachusetts the cost of building a fiber route 20 miles away to the closest Internet point-of-presence, reports Benton. 

Access to nearby middle-mile at nondiscriminatory rates reduces upfront costs broadband providers pay for middle-mile access, and may ultimately save subscribers money by reducing the overall cost of construction. Lowering residential broadband costs is just one of the benefits public middle-mile networks bring to the communities they serve. Public middle-mile networks also:

• add redundancy to networks. Many are built to prevent widespread network outages, which affect hospitals, public safety, and schools, as well as residents.

• connect business parks to bolster regional economic development. It is estimated that 1,000 new jobs and half of capital investment in Ohio’s Medina County can be attributed to the Medina County Fiber Network, an open access middle-mile fiber ring. 

• reduce costs community anchor institutions pay for access, while providing additional bandwidth.

• allow for future federal dollars that become available for last-mile deployment to be better leveraged, reports CSAC.

The Challenges of Building Public Middle-Mile Infrastructure

Though it may be assumed that last-mile connections inherently follow middle-mile investments, it’s often not that simple. While well-planned public middle-mile networks are sure to reduce the startup costs incurred when building local networks, it’s a mistake to think that building public middle-mile infrastructure will, in and of itself, motivate providers to build last-mile connections in areas previously overlooked. 

Numerous networks, including the MassBroadband 123, have shown that simply building middle-mile is insufficient to incent last-mile investment. It is often necessary but not sufficient because a robust middle-mile does little to change the high upfront capital costs of last-mile builds. In order to achieve last-mile connectivity, it is necessary for communities to develop robust plans and obtain reliable sources of funding in order to benefit from middle-mile fiber infrastructure. 

The best middle-mile strategies take into account the challenges associated with financing last-mile deployments and include funding plans to spur last-mile connectivity. Critical to the success of California’s strategy is the inclusion of state-funded technical assistance teams to provide guidance to communities designing last-mile plans, and a $750 million financing program so municipalities, cooperatives, and nonprofits can access long-term, low-interest financing to build out fiber-to-the-home (FTTH) networks. “An additional $2 billion is (also) available in grants for unserved pockets of the state for private and public applicants,” reports EFF.

Another challenge associated with middle-mile is that it can be difficult to decide where to locate Internet Exchange points, when constructing networks. Middle-mile networks can take a variety of forms, and selecting where to locate Internet Exchange points - intersections where networks connect - can make the process of routing a middle-mile network more difficult. 

When determining the path a network will take, it’s important to remember that the strongest proposals are those that take a comprehensive view of the communities to be served and have engaged as many key members of the communities as possible in developing the projects.

Conducting community surveys and engaging with community leaders to understand the demand and needs of communities can assist in determining where to locate Internet Exchange points. Considering existing infrastructure that can be utilized can also help network planners approach the project realistically. 

If you're interested in learning more about the challenges associated with constructing middle-mile infrastructure, watch Episode 13 of ILSR's Connect This! series, entitled "Middle-Mile Challlenges and Internet Exchange Points".