October 20, 2009

Yankee Group: Broadband Stimulus Not Enough

The $7.2 billion in stimulus funds earmarked for extending broadband service across the United States is woefully inadequate, reaching less than a third of the investment necessary to connect every U.S. household, according to research from Yankee Group in its report “Ubiquitous U.S. Broadband Will Cost At Least Triple the Current Stimulus Package.”

Currently, about 12 percent of U.S. households have no access to broadband service, landing the U.S. at 15th in broadband penetration worldwide. The report examines four possible approaches to addressing the problem: an ultra-cost-conscious “Discount” option, a leverage-what’s-in-place “Duct Tape” method, a “Pragmatic” middle-of-the-road approach and an all-fiber-to-the-home “Gold-Plated” scenario. While all reach the goal of at least one broadband connection per home, none are perfect. And at a minimum, they all require unprecedented vendor cooperation and regulatory foresight.

“Achieving ubiquitous broadband in the U.S. will hasten economic recovery and put the nation back where it belongs in terms of technology leadership, but it will take a concerted effort on the part of all stakeholders,” said Vince Vittore, principal analyst at Yankee Group and author of the report, in a statement. “A minimum of $24 billion is required, and that’s only if networks are deployed in the most efficient manner and much of the middle-mile infrastructure already is in place. While the stimulus is a good start, it’s just that: a start.”