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Georgia’s expensive rural broadband project

Writer’s Note: This is the second of a three-part series about federal dollars paying to expand broadband Internet throughout Georgia. Part One is available here.

According to Gordon County Administrator Jim Ledbetter, the early 21st century has treated his county and its economy well.

Despite this, the federal government believes Gordon County is underdeveloped in one important aspect that free market forces, and not government bureaucrats, usually oversee. Federal officials, wanting to deliver equity to all, plan to spend millions of taxpayer dollars on high-speed broadband services in Gordon County and  throughout Georgia. But before the focus shifts to what’s wrong with Gordon County, we must focus on what’s right.   

Gordon County sits roughly halfway between Atlanta and Chattanooga. Ledbetter said his county is one of Georgia’s fastest growing, and its warehousing industry has flourished in recent years. Ledbetter also noted that the county currently has an unemployment rate of 2 percent or less. 

Oh yeah, and in case you didn’t already know, a new Buc-ee’s opened in the county seat of Calhoun in the summer of 2021. Anyone who visits and sees the sea of people shopping at that particular Buc-ee’s will quickly realize business is exceptional. 

“I can hear the cash registers from here in my office,” Ledbetter said.

“It is amazing what Buc-ee’s can do for the county. It contributes almost $2 million a year in sales tax collections.”

Life in Gordon County benefits residents in other ways.

The county’s most recent U.S. Census, for instance, reported that 75 percent of the people who live there have broadband internet.

The county seems able to carry itself and to offer new opportunities to those willing and able to earn them. But despite all that success, and despite the local business community’s coup of getting a Buc-ee’s, the feds believe too many people in Gordon County got left behind. Specifically, the feds say not enough people in Gordon can access high-speed Internet.

“The location of the needy areas is pretty much a doughnut around Calhoun,” Ledbetter said. 

“Calhoun is the doughnut hole, and it is the fringes of the county [lacking high-speed broadband]. It is important for those areas to receive it. These are the poorest areas.”

Therefore, it is believed, the feds must intervene.

Toward that end, federal taxpayers will pay Gordon County $4.4 million to connect 4,385 locations to high-speed broadband. The Capital Projects Fund, which uses funds from the American Rescue Plan Act, will use $230 million to connect 77,000 people across 28 Georgia counties, according to a list that Georgia Gov. Brian Kemp’s office published this month. 

According to the U.S. Treasury Department’s website, the Capital Projects Fund has awarded nearly $3.7 billion to other states to expand broadband, including Illinois, Indiana, and North Carolina so far.

Kemp, in a press release announcing the program, specifically cited Gordon County as a place that needs government assistance. Members of the Governor’s Office of Planning and Budget and the Georgia Technology Authority decided which of Georgia’s counties were the most unserved and underserved.

The program will pay 12 Internet Service Providers (ISPs) in Georgia to connect people who live in unserved or underserved areas. Cox Communications, for instance, will make $8.1 million off of taxpayers. Spectrum will make $49.5 million, Comcast will make $66.6 million and Windstream Georgia Communications will make $69.4 million. 

Taking a Loss 

Through this program, Bartow County, Georgia will receive $6.7 million to connect 2,934 locations. County Administrator Peter Olsen said too many people in Bartow work from home or have children and thus need broadband.

Olsen said the average location or household in Barton has 2.7 people.

“Much of the homework and schoolwork that children do is now web-based. The anecdotes of parents having to drive their kids to the parking lot of a McDonalds or elsewhere with free Wi-Fi to do homework are real,” Olsen said via email.

“Many persons run business from their property, such as grading companies or trucking companies or construction companies, etc., or knowledge-based jobs such as consultants. All those businesses need high-speed internet. But if their property is too remote, they are stuck with DSL or having to buy a mobile hotspot.” 

Olsen said private ISPs cannot connect broadband to certain fringe areas and expect to profit.

“It’s the economics of running fiber.  I am told fiber costs $50,000 per mile to run (and that was a 2019 number so likely higher now),” Olsen said.

“There must be a certain density of customers to make the investment worth it for the company.  If there are only five customers on a one mile stretch of the highway, the company would never make money selling them internet service for $60 per month.”

So, with that in mind, federal taxpayers who fund this program will likely suffer a loss.  

Among only some of the other Georgia counties that have accepted taxpayer money for high-speed broadband through this Capital Projects Fund:

• Burke County will receive $17 million to connect 6,082 locations

• Decatur County will receive $13 million to connect 3,698 locations 

• Floyd County will receive nearly $13 million to connect 2,987 locations 

• Madison County will receive $18 million to connect 4,033 locations 

• Mitchell County will receive $12 million to connect 4,280 locations 

Olsen said he thinks of the Internet as a utility, as essential as electricity.

“The government had to step in during the 1930s and 1940s to make sure electrification made it to rural areas, because the same economic hurdle was keeping pockets of the country dark. The capital investment to run the wires was too great for rural areas,” Olsen said. 

“I see this kind of investment, partnered with private investment and with no ongoing commitment to financial support, as a similar public good.”

Meanwhile, in Gordon County, Ledbetter said this government-funded broadband will encourage businesses to invest in the poorer sections of his county. Also with broadband, people who reside in remote areas can participate in more telemedicine services, he said. 

Will Gordon County officials eventually use any formal method to measure whether all this taxpayer money is well-spent and generates many bountiful returns? 

“Yes, we don’t have a specific plan in place right now. Our plan is to serve 3,800 plus unserved homes, and we know the target is to lay 370 miles of new fiber,” Ledbetter said. 

“Those metrics are self-fulfilling. As far as what it does to change people’s lives, we will have to have a way to figure it out. It is always good to track returns on taxpayer money.”

As reported, the feds have already dispersed nearly $400 billion nationwide to connect unserved and underserved areas to high-speed Internet.

In November 2022, the Federal Communications Commission (FCC) published their most recent National Broadband Map. According to that map, and based on provider-reported availability data, exactly 97.93 of the United States has fixed internet service (fiber, cable, copper, fixed wireless, or satellite) available at speeds of 25/3 Megabits per second (Mpbs) download speed or greater. That meets the FCC’s standard for broadband Internet. 

How much more must the state and federal governments do to achieve 100 percent? And could the private sector alone already fill those gaps with the work already done, especially in Georgia?

As part three of this series will reveal, members of at least one government watchdog group are asking these questions and also worry about government overreach.