Billions for old when new appears cheaper
Residents of remote villages in rural Alaska are singing the praises of Starlink – a SpaceX satellite array that beams the internet to anywhere on the planet – and yet the U.S. government is preparing to spend billions of dollars to bring similar broadband service to remote areas of the state.
In Koyuk, a village of 330 on the north edge of Norton Bay in Western Alaska, Charles Swanson is left scratching his head at this expenditure coming on the heels of $3 billion already poured into a government-funded broadband project.
First, there was “the Terra Project (with) GCI spending millions of dollars for microwave towers,” he messaged via Facebook. “Then they went to Quintillion’s fiber optic cable. And now back to the (Terra) microwave after the damage to the cable.”
Quintillion’s 1,200-mile cable across the Arctic was severed by bottom-scouring sea ice in June. The cable has yet to be repaired. As of yesterday, Quintillion was reporting a “repair vessel has been cleared by ice forecasters to proceed around Point Barrow and then to the area of operation/fault repair.”
The various problems with government-funded efforts to bring broadband led some like Swanson to turn to Starlink, and he said the results have been eye-opening.
“Personally, I think it is as good as Anchorage’s internet, maybe better, here in Koyuk,” he said.
Astronomical cost differences
And the Starlink cost – a one-time equipment purchase of $549 plus $99 per month for service – amounts to a fraction of the amount of money the government is throwing at broadband in its latest effort to improve internet connectivity in rural areas.
How much of a fraction?
Well, the U.S. Department of Agriculture (USDA) Broadband ReConnect Program reports that Arctic Slope Telephone has been provided a grant of just shy of $31 million to connect 151 households on the North Slope to high-speed internet.
Broken down to a per household cost, USDA plans to spend just a few cents shy of $205,100 to serve each home.
For a cost of $59,949 per home, the government could buy each one a Starlink base ($549) and contract for Starlink service to that base for the next 50 years ($99 x 12 months = $1,188 per year x 50 years = $59,400.)
At $59,949 per household, it would cost a little over $9 million to provide all of this. But because things break and it’s hard to get a serviceman in for repairs in rural Alaska, let’s say the government bought the necessary base units, contracted for Starlink service for the next 50 years for each household and then bought an extra 175 base units to keep on hand for backup in the village if one fails.
This would bring the cost to close to $9.15 million, still less than a third of what the government is preparing to spend.
And these are the cost savings today in a world where the well-established history of telecommunications technology is that it gets both better and cheaper over time while moving ever farther from the need for massive ground stations let alone wires.
That phone drove a sea change shift in communications, both verbal and later text, from moving the data through wires to moving it through the air.
By 2021, according to the data website Statista, there were 7.1 billion people around the globe connecting to the internet via the airwaves, and this number is projected to grow to 7.49 billion by 2025.
The U.S. Centers for Disease Control, which has been tracking “wireless substitution” in this country, reports that 72.6 percent of Americans have cut the cord with the trend especially pronounced among those of prime working age.
More than 86 percent of those aged 25 to 44 have gone wholly wireless.
SpaceX and a handful of other satellite companies have exploited this societal shift by taking business to the edge of the final frontier, as Star Trek long ago labeled space, to free people from local telecommunication centers.
And yet the U.S. government appears to be wired to wire in some form.
An even bigger spend
Consider this, along with the grant to Arctic Slope Telephone in the USDA files is another to the Palau National Communications Corporation.
Palau is a former U.S. trust territory in Micronesia, a cluster of 2,000 small islands in the Northwestern Pacific Ocean made famous by former Secretary of State Henry Kissinger who in the 1970s is reputed to have dismissed concerns about the testing of nuclear weapons in the area with the flippant observation that “there are only 90,000 (people) out there. Who gives a damn?”
Obviously, the U.S. government now gives a damn and in a big way.
The USDA grant to Palau is for just shy of $35 million “to deploy a fiber-to-the-premises network to connect six people and three educational facilities to high-speed internet in Angaur, Babeldaob, Kayangel, Koro, Meyuns and Peleliu in Palau.”
The grant does not say whether the six people live in one house or six houses, but if it’s the maximum six, the spending amounts to almost $3.9 million per building to connect to the internet.
“This project will serve socially vulnerable communities in Palau,” the grant says.
That’s commendable, but an objective observer can hardly avoid wondering what those six individuals and three educational facilities might decide if they were allowed to make their own choices on how to spend a $35 million grant from the U.S. government.
Would they purchase the proposed service they are slated to be delivered, or turn to Starlink – or one of its eight major competitors in the satellite communications business – to provide a cheaper service and then use the rest of the money for other needs in Palau, where The Borgen project reports nearly a quarter of the population lives in poverty.
Borgen – a Tacoma, Wash., nonprofit committed to ending world hunger and providing clean water – says most of the poor in Palau “are among the rural population, who rely on small-scale agriculture and fishing for their livelihoods.”
They face a myriad of problems the internet won’t solve.
“The mortality rate for children under the age of five is 18 per 1,000 live births,” three times higher than in the U.S., according to the Borgen website, and “in 2014, the amount of Palau’s population considered obese was 47 percent. A 2006 school health survey found 35 percent of children were either overweight or at risk. The prevalence of obesity and malnutrition can be attributed to the introduction of the Western diet, which provides consumers more calories for less money and nutritional value.”
Palau might be well served by some money directed at helping reduce this problem. The Global Nutrition Reports says that in Palau “62.1 percent of adult (aged 18 years and over) women and 55.8 percent of adult men are living with obesity.
“Palau’s obesity prevalence is higher than the regional average of 31.7 percent for women and 30.4 percent for men and among the highest in the world. At the same time, diabetes is estimated to affect 23.4 percent of adult women and 26.8 percent of adult men.”
Those numbers should cause someone to at least ask this question: Are better internet connections, which have been shown to increase sitting times linked to both obesity and diabetes, even in the best interests of the people of Palau?
Forget the cost that most Americans might find outrageous, and ponder whether this is really helping the residents of Palau.