Lake County is getting a little more attention this week in the form of a report from the Navigant Economics entitled, Evaluating the Cost-Effectiveness of RUS Broadband Subsidies: Three Case Studies. The executive summary calls out the purpose/findings of the report…

The evidence indicates that RUS’ history of funding duplicative service has continued under BIP, and that the current program is not a cost-effective means of achieving universal broadband availability.

According to their web site…

Navigant Economics, a subsidiary of Navigant Consulting, provides economic and financial analysis of legal and business issues to law firms, corporations and government agencies.

Here’s the breakdown of the data they have on Lake County:

Area (Sq. Miles) – 2,675
Households – 11,637
Median HH Income – $45,499
Median Home Value (Owner Occupied) – $111,339

And their stats on broadband (broadband is defined as 768 Kbps down/200 Kbps up
Unserved Households 22.9%
Unserved Households (houses that also lack 3G access) 3.6%
(They have two definitions of unserved because they think 3G is close enough to count, especially given that 3G sets the stage for 4G.)

There are 8 providers in the area.

They use this information to figure out the price being spent to access each household ($3,153) and the cost of providing access to the households have no wireline broadband ($13,746) and households with no wired or wireless access ($87,231).

I don’t know about the veracity of the numbers. I don’t doubt it – but I thought that the federal funding was intended to reach areas that were not economically viable – if so those numbers help make the case. Also I think the area has real concerns about redundancy. Last winter, they experienced problems with redundancy when an incident took out telecommunications throughout the area. Maybe we need to look at this funding as an investment in redundancy.

I understand the concern about discouraging investment from local business. However, I recall from notes about the project written when RUS was making their announcements about successful applications that the providers said that it would take 10-15 years to build fiber network in the area. Assuming that information is correct, I think we can assume that the providers were already disinvesting. Again the numbers above might help make the case as to what discouraged them.

I think the question comes back to classifying broadband as a utility or a luxury. Can we as a country/state/community afford to leave residents at the far end of the digital divide?