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The Cost Of Broadband In Every Rural Home
dave562 writes "In an analysis of the effectiveness of the the 2009 stimulus program (American Recovery and Reinvestment Act of 2009 or ARRA), one of the programs that was investigated was the project to bring broadband access to rural America. Some real interesting numbers popped out. Quoting the article: 'Eisenach and Caves looked at three areas that received stimulus funds, in the form of loans and direct grants, to expand broadband access in Southwestern Montana, Northwestern Kansas, and Northeastern Minnesota. The median household income in these areas is between $40,100 and $50,900. The median home prices are between $94,400 and $189,000.' So how much did it cost per unserved household to get them broadband access? A whopping $349,234, or many multiples of household income, and significantly more than the cost of a home itself.'"
Keep in mind that this study was conducted by Jeffrey Eisenach (former head of Newt Gingrich's political action committee and longtime conservative activist) and Kevin Caves of Navigant Economics (a bunch of professional "experts" who spend most of their time testifying in favor of various pro-big oil, pro-energy concerns). The article that cites it is by Nick Schulz, of the conservative think-tank American Enterprise Institute.
And it also includes some data that I'm highly skeptical of, to say the least--like asserting that all but 1.5% of users in Montana had wired broadband access and all but 7 households in the whole state had access to 3G broadband prior to this funding. Those numbers are better than my own state, and we're not nearly as rural or mountainous as Montana.
SJW: Someone who has run out of real oppression, and has to fake it.
While the source of this data is obviously biased, I wonder where the stimulus money was actually spent. Think what a trillion dollars actually is. A new aircraft carrier costs ~10 billion dollars, planes double that cost, meaning that the country could have purchased 50 with the stimulus (we currently have 11). In todays dollars the Apollo program cost 150 billion meaning that we could duplicate it six times with a trillion dollars. A highway bridge near where I live is being replaced for a cost of 300 million, thus a trillion dollars could have replaced that bridge 3000 times. It could have paid the 14 million unemployed, $35000 a year for two years. Where did it go, and what did it do?
So, how did the roads get built? How is the mail delivered? How is power transmitted? How about Plain Old Telephone Service? There used to be some bonafide investment in infrastructure in the US, so where did all that go?
Granted, I understand that water and sewer isn't too common in rural areas, but it's not like it's a backpacking adventure through the rainforest we're talking about.
More Twoson than Cupertino
How do you think they got those phone lines out there? It wasn't the invisible hand.
There were probably people saying "Can't those things be done through the mail?" when they got wired up for phone service.
First of all they're dirt poor and not going to pay for broadband or own a computer. The critical part is the ratio of income to house price. Somewhere around 1:2 is OK but not ideal, 1:4 means extreme poverty, like 99% of your legally declared income must be going toward the house and you never eat anything but ramen, at least until the inevitable foreclosure and bankruptcy. Even commissioned cheerleaders for the home sales/building industry don't have the guts to ask for more than a ratio of 1:3.
Umm. That's wrong. 1:2 is great, 1:4 is still good. It is certainly not extreme poverty. I don't know if you realize this, but those in extreme poverty generally don't own homes at all.
A good explanation of ratios based on interest rate
I own a home and my income:home price ratio is 1:3.2 I comfortably pay for expanded cable and a 20/3 fiber-to-the-home internet connection, and I live in a rural community. Most of the community has access to 3 broadband choices -including fiber from an independent/non-big-telco - which are not payed for through subsidy or tax credits.
I'm not sure where you are from, but $40-50k / year is certainly a livable, comfortable, not-anywhere-near poverty condition for most of the country.