TELECOMMUNICATIONS

Projects and Policies 

Related to Deploying 

Broadband in 

Unserved and 

Underserved Areas

Report to Congressional Requesters

April 2014

GAO-14-409

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-409, a report to 

congressional requesters

April 2014

TELECOMMUNICATIONS

Projects and Policies Related to Deploying 

Broadband in Unserved and Underserved Areas

Why GAO Did This Study

Broadband service provides users with 

many opportunities to improve 

communications and broadband 

deployment is particularly critical in 

rural areas to provide advanced 

communications to remote users and 

communities. In 2010, FCC estimated 

that 7 million U.S. housing units—

about 5 percent of the nation’s housing 

units—did not have access to wireline 

broadband service, mostly in rural 

areas. Some municipalities, 

cooperatives, and non-traditional 

private providers are exploring ways to 

sponsor and fund broadband projects

in unserved and underserved areas. 

GAO was asked to provide information 

on options for broadband deployment 

in unserved and underserved areas. 

This report examines (1) what is known 

about the alternative approaches 

unserved and underserved areas have 

used to deploy broadband and some 

factors considered in deployment 

decisions; (2) stakeholders’ views on 

broadband deployment in unserved 

and underserved areas; and (3) efforts 

FCC has undertaken to foster 

broadband deployment in unserved 

areas. GAO reviewed relevant 

documents and interviewed FCC 

officials, representatives from industry, 

and incumbent providers. GAO also 

conducted an in-depth review of 21 

geographically dispersed broadband 

projects selected to include various 

sponsor types, such as municipalities, 

non-traditional private providers, and 

cooperatives, and various ownership 

and financing approaches. GAO 

provided FCC with a draft of this report 

for comment. In response, FCC 

provided technical comments, which

have been incorporated as 

appropriate.

What GAO Found

The unserved and underserved areas that GAO reviewed used alternative 

approaches and considered various factors to deploy broadband. Broadband 

project sponsors in those areas included municipalities, non-traditional private 

providers, consortiums of sponsors in a region, and cooperatives. In making 

broadband deployment decisions, project sponsors said they considered diverse 

factors related to their ability to fund successful projects, such as the (1) 

likelihood of near-term service upgrades by incumbent providers, (2) potential 

demand for new services, (3) potential broadband technologies, and (4) existing 

infrastructure and potential local assistance available to providers. For financing 

approaches, some project sponsors used local private and public funds while 

others leveraged federal funds. In addition, project sponsors used a variety of 

ownership structures that ranged from public ownership to local private investors. 

Stakeholders and project sponsors GAO contacted cited economic, legal, and 

policy concerns in deploying broadband in unserved and underserved areas. For 

example, regarding funding, stakeholders said that remote areas generally face 

high broadband deployment costs due to the expense of deploying technologies 

over long distances or difficult terrain and that often the return on investment is 

low since there are relatively few potential subscribers in those areas. Project 

sponsors and industry experts noted legal concerns, including concerns with 

laws in some states that limit or ban companies that are not telecommunications 

companies from deploying broadband due to concerns about unfair competition. 

For example, in Louisiana, a city official GAO contacted said state laws bar any 

municipality from deploying broadband directly to consumers, so the city is 

planning to build and own a fiber-optic network, but to comply with the state law, 

will not offer retail service. Stakeholders also noted several policy concerns, 

including concerns over the accuracy of federal broadband-mapping efforts and 

whether the Federal Communications Commission’s (FCC) broadband-speed 

benchmark is set high enough. While there may be valuable lessons in the 

examples profiled in our case studies, their limited number does not allow us to 

generalize findings to the broader universe of all entities seeking to deploy 

broadband networks.

FCC has several efforts under way to increase broadband deployment in 

unserved areas, efforts that help address the economic and policy concerns

raised by stakeholders. FCC established the Connect America Fund in 

November 2011 to support voice and broadband access in areas where no 

private business case exists to provide broadband—one of the key challenges 

these areas face in deploying broadband. Additionally, in January 2014, FCC 

adopted an order in which it stated that it will solicit proposals from non-traditional 

providers, including utilities and municipalities, to deploy broadband technologies 

in rural, high-cost areas. Through this effort, FCC plans to explore broadband

policy issues and gather information on viable business models for deploying 

fiber-optic or next-generation wired technology in rural areas. FCC plans to also 

gather information on the conditions under which rural consumers would prefer 

View GAO next-generation wireless services over wireline. -14-409. For more information, 

contact Mark Goldstein at (202) 512-2834 or 

goldsteinm@gao.gov.
Page i GAO-14-409 Broadband Deployment

Letter 1

Background 3

Unserved and Underserved Areas Used Alternative Approaches 

and Considered Various Factors to Deploy Broadband 10

Stakeholders Cited Economic, Legal, and Policy Issues in 

Deploying Broadband in Unserved and Underserved Areas 20

FCC Has Undertaken Various Efforts to Foster Broadband 

Deployment in Unserved Areas 25

Agency Comments 28

Appendix I Objectives, Scope, and Methodology 29

Appendix II Selected Information on Broadband Projects in 21 Case Study Areas 34

Appendix III GAO Contact and Staff Acknowledgments 40

Tables

Table 1: List of Telecommunications Industry Stakeholders 

Interviewed 29

Table 2: Attributes of Broadband Projects in 21 Case Study Areas 34

Table 3: Selected Examples of Wireline and Wireless Broadband 

Technology and Speeds for Alternative and Existing 

Networks 38

Figure

Figure 1: Broadband Technologies and Examples of Applications 

Performing at Various Speeds 6

Contents
Page ii GAO-14-409 Broadband Deployment

Abbreviations 

4G fourth generation wireless

BTOP Broadband Technology Opportunities Program

DSL digital subscriber line

EC Fiber East-Central Vermont Community Fiber-Optic Network 

ETC eligible telecommunications carrier

FCC Federal Communications Commission

Gbps gigabits per second

kbps kilobits per second

LTE Long Term Evolution

Mbps megabits per second

NRTC National Rural Telecommunications Cooperative 

NTIA National Telecommunications and Information

Administration

Recovery Act American Recovery and Reinvestment Act of 2009 

RUS Rural Utilities Service

USAC Universal Service Administrative Company 

USF Universal Service Fund

UTOPIA Utah Telecommunication Open Infrastructure Agency

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Page 1 GAO-14-409 Broadband Deployment

441 G St. N.W.

Washington, DC 20548

April 23, 2014

The Honorable Henry A. Waxman

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Anna G. Eshoo

Ranking Member

Subcommittee on Communications and Technology

Committee on Energy and Commerce

House of Representatives

The Honorable Edward J. Markey

United States Senate

Broadband Internet service provides users and their communities with 

many opportunities to improve communications, including enhancements 

in e-commerce, telemedicine, and educational tools, and can drive 

economic growth, productivity, and innovation. Broadband is particularly 

critical to provide advanced communications to remote communities and 

offer rural Americans new ways to participate in our economy and society.

The American Recovery and Reinvestment Act of 20091 (Recovery Act) 

directed the Federal Communications Commission (FCC) to develop a 

national broadband plan to ensure every American had access to 

broadband service. In March 2010, FCC issued the National Broadband 

Plan that included a centralized vision for achieving affordability and 

maximizing use of broadband to advance community development, health 

care delivery, education, job creation, and other national purposes.2

Throughout most communities in the United States, cable and telephone 

companies have upgraded their networks or deployed new technologies 

to provide broadband services to their customers. Nevertheless, in 2010, 

FCC estimated that 7 million of the 130 million American housing units did 

 1

Pub. L. No. 111-5, § 6001(k)(1), 123 Stat. 115, 515-516 (2009).

2

Federal Communications Commission, Connecting America: The National Broadband 

Plan (Mar. 16, 2010).
Page 2 GAO-14-409 Broadband Deployment

not have access to wireline broadband service.3 Most of those who lack 

access live in rural areas where low population density makes expanding 

cable and telephone networks considerably more expensive than in urban 

areas. FCC estimated in 2010 that it would cost $23.5 billion to reach all 

unserved areas, of which $13.4 billion would be needed to just reach the 

most remote 250,000 households.4

In this report, we refer to areas that lack broadband as “unserved,” and 

areas that have access to low quality broadband service and may have 

some households without access as “underserved.” In some unserved 

and underserved areas, entities other than traditional telephone or cable 

Internet service providers—such as municipalities, non-traditional private 

providers, consortium of sponsors in a region, and cooperatives—are 

exploring ways to sponsor and fund broadband projects. However, these 

entities face a range of challenges in deploying broadband in unserved 

and underserved areas.

Furthermore, deployment costs vary 

according to the broadband technology and type of construction used. For 

example, according to FCC, the costs for new fiber construction can 

range from $11,000 to $24,000 per mile for aerial construction to $25,000 

to $165,000 per mile for buried construction.

You asked us to provide information on options for broadband 

deployment in unserved and underserved areas. This report examines (1) 

what is known about the alternative approaches unserved and 

underserved areas have used, or attempted to use, to deploy broadband 

and some factors considered in broadband deployment decisions; (2) 

stakeholders’ views on broadband deployment in unserved and 

underserved areas; and (3) efforts FCC has undertaken to foster 

broadband deployment in unserved areas.

To address these objectives, we conducted a review of relevant published 

literature and interviewed FCC officials and a broad array of stakeholders 

 3

According to the National Broadband Plan, the availability of satellite broadband service 

is not considered in determining whether an area is served. The National Broadband Plan

defines housing units as a house, apartment, or single room, etc. that is occupied or 

intended for occupancy as separate living quarters. The National Broadband Plan, 

endnote 30.

4

These estimates include capital expenditures and operating costs to provide service 

minus anticipated revenues from service, and are present value in 2010 dollars. See 

National Broadband Plan, p. 136-139. 
Page 3 GAO-14-409 Broadband Deployment

from 40 organizations, including associations representing consumers 

and industry, broadband consultants and providers, and officials from 

local agencies in selected areas where broadband projects were 

deployed or attempted. In selecting industry experts and incumbent 

providers, we considered relevant published literature and stakeholders’

recommendations. We conducted an in-depth review of 21 broadband 

projects, selected because they were geographically dispersed and 

included various sponsor types, such as municipalities, cooperatives, 

economic development agencies often in regional consortiums, or private 

companies. For the 21 projects, we reviewed the broadband options that 

project sponsors considered and factors affecting their decisions. We 

interviewed project sponsors to obtain their views on economic, legal, and 

other issues they believe affected their ability to deploy a network. The 

economic, legal, and other issues identified by project sponsors should 

not be viewed as identifying all issues that could affect broadband 

deployment in unserved and underserved areas; however, project

sponsors consistently raised the issues presented. Also, the economic, 

legal, and other issues that we report on should not be viewed as being 

representative of all entities deploying broadband in unserved or 

underserved areas. We also interviewed incumbent providers on their 

views of municipalities and cooperatives providing broadband service. We 

interviewed industry experts, incumbent providers, project sponsors, and 

stakeholders about FCC’s efforts to facilitate broadband deployment in 

unserved areas and what further actions, if any, FCC might take. Further 

details of our scope and methodology are provided in appendix I.

We conducted this performance audit from May 2013 to April 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Broadband allows users to access information via the Internet through 

one of several high-speed transmission technologies. Broadband 

capacity, typically referred to as “speed,” is described in download and 

upload capabilities and is measured by the number of bits of data 

transferred per second and include kilobits (1 thousand bits per second—

kbps), megabits (1 million bits per second—Mbps), and gigabits (1 billion 

bits per second—Gbps). Download speed refers to the rate at which data 

Background
Page 4 GAO-14-409 Broadband Deployment

is transferred from the Internet to the consumer. Upload speed refers to 

the rate at which data is transferred from the consumer to the Internet.

A range of broadband technologies provides high-speed Internet access.

• Digital subscriber line (DSL) service is delivered by local telephone 

companies over upgraded copper-wire telephone networks that were 

originally built to provide traditional wireline voice service.

• Cable modem service is delivered by cable television companies 

through the same coaxial cables that deliver sound and pictures to 

television sets.

• Fiber-optic lines are a wired technology that converts electrical signals 

carrying data into light and sends the light through transparent glass 

fibers about the diameter of a human hair. Telephone companies 

provide most fiber-optic broadband service.

• Satellite is a wireless technology that transmits data using a 

subscriber’s receiver dish and a satellite in a fixed position above the 

equator.

• Other wireless services, such as Long Term Evolution (LTE)—a 

commercial data standard for wireless technologies—use cellular 

radio links for consumers to access the Internet using their smart 

phones, tablets, and other portable devices.5

Broadband speeds vary significantly depending on the particular type of 

service provided and may range from as low as 256 kbps to 1 Gbps.6

 5 LTE is the standard created and adopted by the Third Generation Partnership Project, a 

standards organization, and is the closest standard to fourth generation wireless (4G) 

technology. LTE has been accepted and adopted by national and international 

communities as the foundation for future mobile telecommunications.

In 

2010, the National Broadband Plan stated that every household and 

business in America should have access to affordable broadband service 

with a speed of at least 4 Mbps download and at least 1 Mbps upload. In 

2011, FCC adopted this 4 Mbps/1Mbps benchmark for broadband 

6 Data transfer rates (speeds) vary depending on a number of factors including the 

distance of users from core technology elements such as nodes or cell towers and the 

number of users on shared networks among other factors.
Page 5 GAO-14-409 Broadband Deployment

projects to be eligible to receive universal service support.7

 7 According to FCC, nearly 100 percent of urban residents have access to 3 Mbps or 

higher download speeds, and about 94 percent of nonurban residents have access to 

such speeds as of December 2012.

The federal 

benchmark allows for such Internet applications as accessing websites, 

emailing with attachments like pictures, and simple video conferencing, 

but does not support some of the newer Internet applications that require 

faster speeds to use, as shown in figure 1. For example, applications 

such as distance learning, telecommuting, and telemedicine, which can 

involve transmitting large amounts of data and images in real-time, 

cannot perform acceptably at the federal benchmark speed of 4 

Mbps/1Mbps.
Page 6 GAO-14-409 Broadband Deployment

Figure 1: Broadband Technologies and Examples of Applications Performing at Various Speeds

a The figure above depicts applications, and the off-site activities they allow, that perform well at given 

speeds. While it is possible for the applications to perform at speeds lower than those indicated 

above, that performance is generally at a fair or unacceptable level, and is therefore undesirable for 

business and residential users.

b Many people telework (also known as telecommuting), which is the ability for an organization’s 

employees and contractors to perform work from locations other than the organization’s facilities. 

Most teleworkers use remote access, which is the ability for an organization’s users to access its nonpublic computing resources from external locations other than the organization’s facilities. National 
Page 7 GAO-14-409 Broadband Deployment

Institute of Standards and Technology, Guide to Enterprise Telework and Remote Access Security, 

Special Publication 800-46 Revision 1 (Gaithersburg, MD: 2009), page 2-1.

c Distance learning today can take many forms and is defined by federal law and regulation as 

education that uses one or more specified technologies (e.g., the Internet or audio conferencing) to 

deliver instruction to students who are separated from the instructor and to support regular and 

substantive interaction between the students and the instructor. 20 U.S.C. § 1003(7) and 34 C.F.R. § 

600.2.

d Telemedicine technologies can allow rural patients to receive, through remote access, medical 

diagnosis or patient care, often from specialists who are located in urban areas or university 

hospitals. Increased use of video consultation, remote patient monitoring, and electronic health 

records enabled by telemedicine technologies hold the promise of improving health care quality, 

safety, and efficiency. GAO, Telecommunications: FCC’s Performance Management Weaknesses 

Could Jeopardize Proposed Reforms of the Rural Health Care Program, GAO-11-27 (Washington, 

D.C.: Nov. 17, 2010).

Unserved and underserved areas tend to have conditions that increase 

the cost of constructing and maintaining broadband networks. These 

conditions include low populations who might also be widely dispersed

and in remote areas that might have challenging terrain, such as 

mountains, that increase construction costs. The choice of broadband 

technology and the ability to use or extend existing infrastructure also 

affects the costs of constructing and maintaining broadband networks. 

Certain technologies like cable and fiber, which must be buried 

underground or placed on raised poles, could be more expensive to 

deploy in remote areas than wireless technologies, such as cellular 

towers.

Within the federal government, FCC, the Department of Commerce, and 

the Department of Agriculture (USDA) have roles in broadband 

deployment. In particular, Congress gave FCC a large role in fostering 

broadband deployment when it directed FCC to “encourage the 

deployment on a reasonable and timely basis of advanced 

telecommunications capability to all Americans.”8

 8

47 U.S.C. § 1302(a).

In responding to that 

directive, FCC developed goals to broaden broadband deployment to 

unserved areas and encourage investment and innovation in broadband 

technologies and services. As part of the Recovery Act, the Department 

of Commerce’s National Telecommunications and Information 

Administration (NTIA) received $4.7 billion to create the Broadband 

Technology Opportunities Program (BTOP). Through this program, as of 

September 2013, NTIA had awarded 233 competitive grants for a total of 

$4 billion to a variety of entities for broadband infrastructure, public 
Page 8 GAO-14-409 Broadband Deployment

computer centers, and innovative projects to stimulate demand for and 

adoption of broadband. In addition, the Department of Commerce’s 

Economic Development Administration also had programs in 2008 

through 2012 that supported the construction of public infrastructure, 

which could include broadband infrastructure.9

As of December 2012, the National Broadband Map

USDA administers 

programs that support broadband deployment, including three Rural 

Utilities Service (RUS) programs: the Rural Broadband Access Loan and 

Loan Guarantee Program, the Community Connect Grant Program, and 

the Telecommunications Infrastructure Loan Program. USDA provided 

over $7 billion in grants and loans for broadband projects from 2008 

through 2012.

10 depicted 

approximately 2 percent of the U.S. population as living in unserved 

areas—that is, those not having access to wireline or wireless broadband 

service of 3 Mbps download and 768 kbps upload.11 The map shows 

broadband access by census block—if a single house or building in a 

census block has broadband access, the block is categorized as 

served.12

 9

Programs include Economic Adjustment Assistance, Public Works, Disaster Supplement 

Appropriations, Global Climate Change Mitigation Incentive Fund, Community Trade 

Adjustment Assistance Program, and the Disaster Relief Opportunity Fund. The focus of 

these programs is to support economic recovery, promote regional competiveness, or to 

help areas recover from a natural disaster, rather than explicitly fund the construction of 

broadband infrastructure.

Although FCC does not define underserved areas, NTIA 

created a definition and used it in reviewing projects for consideration to 

10See www.broadbandmap.gov. The map is a joint effort of NTIA and FCC to report 

broadband speeds and technology available across the United States. According to NTIA 

and FCC, the map represents the most comprehensive nationwide data on broadband 

availability. 

11Although FCC’s broadband speed benchmark is 4 Mbps/1Mbps, FCC and NTIA report 

on 3 Mbps download and 768 kbps upload because it is the closest speed to the FCC 

benchmark about which data is collected for the National Broadband Map. 

12The U.S. Census Bureau defines a census block as a statistical area bounded by visible 

features, such as streets, roads, streams, and railroad tracks, and by nonvisible 

boundaries, such as selected property lines and city, township, school districts, and 

county boundaries. A block is the smallest geographic unit for which the Census Bureau 

tabulates decennial census data. Many blocks correspond to individual city blocks 

bounded by streets, but blocks—especially in rural areas—may include many square 

miles and may have some boundaries that are not streets.
Page 9 GAO-14-409 Broadband Deployment

receive BTOP grants.13

The National Broadband Plan noted that because Internet service 

providers are unlikely to earn enough revenue to cover the costs of 

deploying and operating broadband networks in unserved areas, it is 

unlikely that private investment alone will bring service to these areas. To 

improve Americans’ access to broadband, the National Broadband Plan

recommended that FCC create the Connect America Fund to provide 

funds in geographic areas where there was no private sector business 

case to provide broadband. FCC established the Connect America Fund 

in 2011 as part of the Universal Service Fund (USF).

Since the National Broadband Map does not 

show underserved areas, it is unknown how many of these areas exist or 

what percentage of the population they represent.

14 In doing so, FCC 

reformed the USF high-cost program and adopted new rules to allow USF 

monies to be used to support voice and broadband capable networks. 

FCC established a $4.5-billion annual program budget for the Connect 

America Fund for 6 years.15

 13NTIA’s definition of underserved is one in which (1) 50 percent or less of households 

have access to the minimum broadband speed, (2) no provider offers service speeds of at 

least 3 Mbps, or (3) 40 percent or less of the households choose to subscribe to a 

broadband service. American Recovery and Reinvestment Act of 2009 (74 Fed. Reg. 

33104, July 9, 2009).

14The federal USF includes four programs designed to ensure access to affordable 

communications for schools, libraries, health care providers, and rural and low-income 

consumers. The high-cost program provides subsidies to telecommunications carriers that 

serve rural and other remote areas with high costs of providing telephone service. The 

other three USF programs are intended to reduce costs for low-income consumers, 

schools and libraries, and rural health care providers.

15We have previously reported on FCC’s efforts to reform the USF high-cost program and 

create the Connect America Fund. See GAO, Telecommunications: FCC Has Reformed 

the High-Cost Program, but Oversight and Management Could be Improved, GAO-12-738

(Washington, D.C.: July 25, 2012).
Page 10 GAO-14-409 Broadband Deployment

Project sponsors we spoke with pursued various approaches for financing 

and deploying broadband in unserved and underserved areas that 

differed from more traditional commercial project models, such as those 

often built by incumbent providers in more urban areas. In particular, 

types of project sponsors included (1) municipalities, (2) non-traditional 

private providers, (3) a consortiums of sponsors in a region, and (4) 

cooperatives. The following examples describe some of the alternative 

ownership and financing approaches we found (for summaries of all our 

21 case study projects, see app. II).

Municipal networks are eligible to receive federal funding, but not all 

municipal networks discussed in this report received federal funding. 

Some municipalities support broadband deployment by funding, building, 

and operating networks to provide broadband access to their 

communities, much as some cities offer utilities such as water and 

electricity. The municipal entity providing this service may be, for 

example, a department within the city government or a cooperative 

formed among several communities. Communities have used federal 

funds, issued bonds, and taken out loans to fund the construction of 

municipal broadband networks. In some instances, voter referendums 

have been required for the city to take out loans or bonds for this 

purpose.

• East-Central Vermont Community Fiber-Optic Network (EC 

Fiber); publicly owned, privately funded. A group of 23 Vermont 

municipalities collaborated to build this “open-access” fiber-optic 

network to provide Internet and voice service to homes and 

Unserved and 

Underserved Areas 

Used Alternative 

Approaches and 

Considered Various 

Factors to Deploy 

Broadband

Alternative Ownership and 

Financing Approaches

Municipalities
Page 11 GAO-14-409 Broadband Deployment

businesses.16 EC Fiber contracts with a non-profit Internet service 

provider to operate the network. Construction costs were 

approximately $5 million, most of which was financed through local 

private investors. By December 2013, EC Fiber had 550 subscribers 

and had raised $4.7 million from 365 investors—90 percent of whom 

are residents of towns the network serves or will serve. The founders 

decided on a local private-funding model after the 2008 financial crisis 

made private financing from the U.S. capital markets difficult to obtain 

and after the project did not receive the Recovery Act’s broadband 

deployment funds. However, project sponsors said one of the 

challenges of privately funding a publicly owned network was that the 

time frame for completing the network depends on the rate at which 

investments can be raised, which can vary according to the economic 

circumstances of each area’s residents. For example, the construction 

of the network is progressing in phases, with new segments being 

built as investments are raised by residents, a process that makes 

rapid expansion difficult. The service provider operating the network 

leases 39 miles of middle-mile and last-mile fiber-optic capacity from a 

statewide open access network being built by the Vermont 

Telecommunications Authority, a state agency that in 2013 provided 

EC Fiber a grant of $167,569 that funded an expansion into unserved 

portions of two communities.17

• Utah Telecommunication Open Infrastructure Agency (UTOPIA); 

publicly owned, publicly funded. UTOPIA is a local government 

agency owned by 16 Utah municipalities, 11 of which raised public 

funding through bonds to build a $177-million fiber-optic open-access 

network over which private providers offer Internet, voice, and video 

services. Five municipalities decided not to raise funds, but remain on 

the network’s board and can decide to pursue financing for their cities 

 16“Open access” generally refers to a structural requirement that would prevent a 

broadband network provider from bundling broadband service with Internet access from its 

own in-house Internet service provider and would require the network provider to make its 

broadband transmission capability available to independent Internet service providers on a 

nondiscriminatory basis. Congressional Research Service, Telecommunications Act: 

Competition, Innovation, and Reform, RL33034 (Updated Jan. 13, 2006). 

17Middle-mile infrastructure provides a link from the Internet backbone to the last-mile 

networks of local providers (such as cable or phone companies) that provide broadband 

service to end users. The availability of broadband service to end users depends on

access to adequate middle-mile facilities, which can be costly to deploy in rural areas. 

Middle-mile capacity, also known as “backhaul,” refers to the installation of a dedicated 

line that transmits a signal to and from an Internet backbone that is typically located in or 

near an urban area. 
Page 12 GAO-14-409 Broadband Deployment

at a later date. Some of the network’s municipalities own 

infrastructure, such as utility poles, which sponsors said helps reduce 

the cost and increase the speed of deploying broadband. Project 

sponsors said their goal is for the network to be financially selfsufficient, but said that goal has yet to be attained for various reasons. 

The project used $16.2 million of BTOP funds to connect 288 

community institutions with middle-mile service over UTOPIA’s fiber 

backbone. In addition, UTOPIA received partial funding from a $66 

million RUS loan for broadband deployment to rural areas. After 

disbursing $21 million to UTOPIA, RUS suspended the loan until 

UTOPIA could demonstrate improved financial performance. Project 

sponsors told us that they have taken steps to improve the 

performance and that 3 years ago they began deploying the network 

to areas that promise greater return on investment.

Private networks are eligible to receive federal funding but not all private 

networks discussed in this report received federal funding. Some private 

companies fund, build, and operate networks to provide broadband 

access to communities. In some instances, companies have used federal 

funds, contributed capital, and taken out loans to fund the construction of 

broadband networks. Some private companies we contacted used 

municipal resources, such as fiber-optic infrastructure or took construction

loans backed by the federal government.

• Lit San Leandro; privately owned, privately and publicly funded.

Lit San Leandro is a private venture that built, owns, and operates an 

11-mile fiber-optic network providing Internet service directly to over 

150 businesses and some community institutions in San Leandro, 

California. The network cost approximately $5 million to build, and 

was financed in two stages. The owner of a local software company, 

who committed a total of $3 million to the project, paid for initial 

construction; the second construction phase, covering the last 7.5 

miles, was paid for with a $2.1 million grant from the Department of 

Commerce’s Economic Development Administration. The project was 

designed to use “dark fiber”—fiber-optic cable that had already been 

installed by the city but was not being used—and 10 percent of that 

capacity was reserved for the city’s current and future municipal 

needs. In exchange for financing and constructing the network, the 

city waived leasing costs for the first 10 years of Lit San Leandro’s 

operation, at which time the costs revert to prevailing market rates, 

should the venture be profitable.

• Valu-Net; privately owned, privately funded. This fiber-optic 

network in Emporia, Kansas, provides Internet, voice, and video 

services directly to over 300 businesses and over 400 residences. 

Non-Traditional

Private Providers
Page 13 GAO-14-409 Broadband Deployment

While a survey issued by the city’s Chamber of Commerce indicated 

strong demand by business owners for broadband, project sponsors 

said there was substantial opposition against the city using tax 

revenue to deploy a broadband network, and there was a general 

consensus that a private service provider should develop the 

infrastructure and provide the service. The network is being built first 

to areas where the most businesses operate, and project sponsors 

told us they would only connect a home once a subscriber requests 

service. They told us the company financed approximately $5 million 

of the construction cost so far through community investors and 

approximately $5 million through bank loans, including a low-interest 

Small Business Administration loan. They anticipate needing up to $3 

million more to complete construction. In addition, a healthcare firm in 

the northern part of the city that desired higher capacity broadband 

service helped finance part of the construction costs to deploy fiberoptic cable under a highway.

Regional networks are eligible to receive federal funding and all regional 

networks discussed in this report either received federal funding or are 

planning to apply for it. These networks focus on building middle-mile 

infrastructure and providing broadband services to schools, medical 

providers, public safety agencies, and other community anchor 

institutions. The availability of broadband service to end users depends 

upon access to adequate middle-mile facilities, which can be costly to 

deploy in rural areas, especially in mountainous or heavily forested areas 

where additional infrastructure can be required. In some cases, regional 

networks also provide the last-mile service to end users.

• MassBroadband 123; publicly owned, publicly funded. Built by a 

state economic development agency, this open-access, middle-mile 

network provides 122 towns in western and central Massachusetts 

with a fiber-optic backbone over which private service providers offer 

Internet, voice, and video directly to community institutions across 

western and central Massachusetts. The project is owned by a state 

technology agency and includes a public-private partnership with a 

company to sell network capacity to Internet service providers on a 

wholesale, open-access basis. Officials said they assigned the risk for 

operating and maintaining the network to the company, and structured 

a revenue-sharing agreement with it so that it would be motivated to 

operate the network efficiently. The project cost approximately $90 

million to build and was financed through a $45.5 million BTOP grant 

in combination with $44.5 million in state funds.

Consortiums of Sponsors

in a Region
Page 14 GAO-14-409 Broadband Deployment

New Hampshire FastRoads; publicly owned, privately and publicly 

funded. This open-access middle-mile and last-mile network provides 

last-mile connectivity to 233 community institutions in 19 communities, 

and 1,300 residences and businesses in two towns. Four private Internet 

service providers use the network to serve customers directly. The 

venture is a wholly-owned limited liability corporation of a local economic 

development non-profit, and officials structured the network as a for-profit 

to allow them to raise additional private equity to expand service in the 

future. Two local economic development organizations and 42 towns 

collaborated on the project, which cost $7.6 million to build, and was 

financed using $5.4 million of BTOP funds, as well as additional funding 

from a variety of sources including banks, a county economic 

development corporation, individual donors, and vendors who offered inkind contributions.

Networks that are owned by cooperatives may qualify to receive federal 

funding. According to project sponsors for the cooperative networks we 

contacted, three rural electric cooperative networks received no federal 

funding and the fourth plans to seek support payments from FCC’s 

Connect America Fund. Rural electric cooperative networks serve areas 

that have lower customer-per-mile density levels than those of privately 

owned or municipal utilities, levels that can make return on investment 

projections for broadband deployment less attractive to investors. Some 

cooperative networks link their broadband deployment efforts with “smart 

grid” efforts that allow two-way communications between the cooperative

and the customer.18

• Douglas Fast Net; privately owned, privately funded. This 

subsidiary of the Douglas Electric Cooperative in southwest Oregon 

owns and operates a hybrid fiber-optic, DSL, and wireless network in 

collaboration with five other rural electric cooperatives and one Native 

American tribe, and provides connectivity, Internet, and voice services 

to businesses, residences, schools, and medical and community 

 18According to the Department of Energy, a “smart grid” is an automated, widely 

distributed energy delivery network characterized by a two-way flow of electricity and 

information made possible by distributed computing and communications. Smart grid 

systems can monitor everything from power plants to customer preferences and individual 

home appliances.

Cooperatives
Page 15 GAO-14-409 Broadband Deployment

institutions in Douglas County.19 In extremely rural areas, rather than 

using wireless technology to reach residences, the fiber-optic network 

uses leased copper telephone lines—DSL. Like most rural electric 

cooperatives, Douglas Electric is a non-profit corporation incorporated 

under state statutes; however, its broadband subsidiary was 

established as a for-profit entity, so it can declare dividends and 

channel excess funds back to the electric cooperative. Officials 

financed $6.5 million in construction costs using a $300,000 grant 

from a county economic development entity, a loan of $4.2 million 

from the electric cooperative, and $2 million from customer installation 

charges. Project sponsors said existing infrastructure and personnel 

improved the project’s business case, and they cited experienced line 

crews and ownership of most of their own plant—with the exception of 

a limited number of leases from third parties—as beneficial project 

components. While they have not sought federal funds for commercial 

deployment yet, officials said USF E-Rate funding allowed them to 

deploy broadband to schools and libraries, which lowered the 

deployment costs when they subsequently expanded the network to 

businesses and homes.20

• Midwest Energy Cooperative, Pilot Project; privately owned, 

privately funded. Midwest Energy is building a 243-mile fiber-optic 

network to create a high-speed communication link to allow smart grid 

applications. As part of that effort, project sponsors said the 

cooperative has begun building a $9.5-million pilot project connecting 

963 homes and businesses with fiber-optic cable in order to assess 

the feasibility of a potentially larger future network deployment. 

Officials said they hope to reach 24,000 homes and 2,500 businesses 

by potentially financing approximately half the construction costs for 

the larger project with monies from FCC’s Connect America Fund, 

should they be eligible for those funds in the future. Project sponsors 

cited the cooperative’s experience maintaining utility rights-of-way and 

 19 he National Rural Electric Cooperative Association defines Rural Electric Cooperatives 

as private, not-for-profit businesses governed by their consumers (known as consumermembers), and lists two federal requirements for all cooperatives, including electric 

cooperatives, as (1) democratic governance and (2) operation at cost. 

20The federal E-Rate program is one of four USF programs. It assists eligible schools and 

libraries through discounted telecommunications and information services. Discounts are 

available for local and long-distance telephone service, Internet access, and internal 

connection projects. See, e.g., In the Matter of Schools and Libraries Universal Service 

Support Mechanism, 25 FCC Rcd. 18762, 18831-18850 (2010). 
Page 16 GAO-14-409 Broadband Deployment

electrical power infrastructure as factors that would allow them to 

deploy a broadband network quickly and cost-effectively.

In making broadband deployment decisions, project sponsors told us they 

considered various factors related to their ability to fund successful 

projects, including the (1) likelihood of near-term service upgrades by 

incumbent broadband service providers; (2) potential demand for new 

service; (3) potential broadband technologies; and (4) existing 

infrastructure and potential local assistance for providers.

Project sponsors told us that in evaluating the market, they considered 

existing broadband service, including speed available from current 

providers in their area, and whether further deployment or upgraded 

service from these providers was likely. The following examples describe 

some of the projects for which sponsors told us they considered existing 

service, including by asking incumbent providers about their plans to 

expand or improve service:

• Camino Fiber Network Cooperative, Northern California

(Planned, but currently inactive). This municipal network was 

planned as a consumer telecommunications cooperative corporation, 

and was designed to provide open-access fiber-optic broadband 

service to about 50,000 mostly rural residences in El Dorado County, 

California. Officials told us that while planning the network, they asked 

the incumbent provider companies whether they had plans to extend 

broadband service to currently unserved areas in the county and were 

told the population density was too low in many areas to justify the 

cost of extending service. As a result, officials said they decided to 

attempt to build their own fiber-optic service over an open-access 

network. However, officials told us they could not secure enough 

public or private funding to hire engineering consultants to design the 

network and plan the business, and as a result the project is inactive.

• Greenlight, Wilson, North Carolina. Project sponsors for this 

municipal network said they approached both local cable and 

telephone incumbent carriers to ask if they had plans to improve their 

cable and DSL broadband networks for underserved areas or to 

extend their networks to unserved areas, and were told the 

companies had no plans to do so. Officials said they then asked if the 

companies would consider entering into a public-private partnership 

with Wilson; the companies declined to do so. As a result, officials 

said they decided to build, own, and operate their own fiber-optic 

network, and to use existing city-owned infrastructure, such as

Factors Considered

Likelihood of Service Upgrades 

by Incumbent Providers
Page 17 GAO-14-409 Broadband Deployment

telephone poles and utility rights-of-way, to do so. Officials said they 

decided to offer retail Internet, voice, and video services directly to 

customers to secure enough subscribers to support the network. To 

finance the $35 million cost of construction, the city issued certificates 

of participation—a form of extended lease agreement secured by city 

property, payments on which are subject to annual appropriation by 

the city, and which are not considered a long-term obligation or debt.

Project sponsors told us they considered potential demand for new 

service in their area. The following examples describe some of the ways 

sponsors told us they estimated potential demand for new service to 

ascertain the business case for deployment:

• Gold Country Broadband Consortium, Northern California 

(Planned). Project sponsors for this open-access regional network 

are investigating potential technologies and partners to bring 

broadband service to residential and commercial customers across

five counties in the foothills of the Sierra Mountains. Officials told us a 

non-profit economic development agency leads the consortium. To 

determine the demand for broadband service, the agency held 

community meetings and conducted telephone and Internet surveys 

about current and desired levels of service and willingness to pay a 

competitive rate to subscribe. Currently the agency is presenting this 

demand data to independent Internet service providers at community 

meetings to determine when and if they are planning to offer service, 

and to investigate technologies they could use to deploy broadband. 

The agency helped potential Internet service providers apply for state 

and federal grants, and plans to use the knowledge gained to pursue 

other opportunities in the future.

• Vermont Telecommunications Authority, Montpelier, Vermont.

This state-chartered entity provides infrastructure grants to finance 

regional open-access fiber-optic and wireless broadband networks, 

and develops infrastructure such as dark fiber, on which it leases 

capacity to multiple private service providers that serve customers. 

Authority officials told us they helped lower the cost of deployment in 

rural areas where population density is low by building and funding 

telecommunications infrastructure that is open to multiple uses and by 

gauging the combined demand of businesses, municipal 

governments, healthcare facilities, and community institutions such as 

libraries and state colleges that want broadband service and working 

to meet their broadband requirements. They said aggregating demand 

in this way, when combined with lowering the capital costs of the 

infrastructure, improves the business case for investing in broadband 

Potential Demand for

New Service
Page 18 GAO-14-409 Broadband Deployment

networks, and may encourage providers to consider investing in 

network construction.

Project sponsors told us they considered various broadband technology 

options available to meet potential demand for service. The following 

examples describe some of the technologies sponsors told us they are

using, have considered using, or have been unable to use:

• Rappahannock Electric Cooperative, Fredericksburg, Virginia. 

Officials from the rural electric cooperative said they have investigated 

various technologies and are considering using any one of them, or a 

combination of different technologies, to make broadband service 

available to cooperative members. They acknowledged that it might 

not be possible to deploy fiber-optic cable because of the high cost. 

Previously, the cooperative invested in a wireless company to provide 

broadband service, but the company went bankrupt before it could 

complete the network. Rappahannock officials said they are now 

considering marketing the services of a satellite broadband provider to 

customers, rather than constructing a network, primarily due to the 

expense of building a network.

• Co-Mo Comm, a Subsidiary of Co-Mo Electric Cooperative, 

Tipton, Missouri. Officials told us they considered deploying a 

wireless broadband network, but decided that the terrain in their area 

would obstruct wireless signals. They also considered satellite 

broadband, but cited concerns about speed and latency—that is, the 

time it takes for a set, or packet, of data to travel from one designated 

point to another in a network.21

 21According to a 2013 FCC report, a new generation of satellites has greatly improved 

overall satellite broadband performance, resulting in decreased latency and improved 

quality of service. FCC reported that latency for satellites unavoidably remains much 

higher than for terrestrial services, but with the improvements afforded by the new 

technology, satellite service will support many types of popular broadband services and 

applications. FCC, Measuring Broadband America: A Report on Consumer Wireline 

Broadband Performance in the U.S. (Feb 3, 2013).

They were also concerned about caps 

on data use that would make satellite service too expensive for largercapacity users such as businesses. Officials said they decided to 

deploy a $1.3 million fiber-optic pilot network, and possibly a larger 

$60 million expansion project mainly because their members will need 

increasing amounts of bandwidth capacity in the future as new 

applications emerge.

Potential Broadband 

Technologies
Page 19 GAO-14-409 Broadband Deployment

Project sponsors told us they considered their existing available assets as 

well as the extent to which assets or assistance from local governments is 

available to reduce costs for broadband providers. The following are 

examples of project sponsors who told us using existing assets can 

improve the business case for deploying broadband:

• Google Fiber, Kansas City, Missouri. This private network received 

assistance from Kansas City to deploy broadband. Kansas City 

officials counted among the city’s available assets ownership of the 

rights-of-way and city properties, including public parks. The city 

helped facilitate an agreement for use of certain utility easements—

the areas surrounding power lines—for approximately 90,000 utility 

poles owned by Kansas City Power and Light, a local utility owned by 

private investors. The city negotiated with Google Fiber the use of 

these rights-of-way and of city properties free of charge in exchange 

for the company’s construction of a $250—$300 million fiber-optic 

network to serve homes with Internet and video service, as well as an 

agreement to provide free Internet connectivity to 300 public buildings, 

schools, community centers, and libraries. As the authority in charge 

of local regulation, the city streamlined the regulatory process 

governing permitting, fee waivers, and other requirements to allow for 

the accelerated construction of the Google Fiber network, and of any 

other potential future broadband networks. As part of that effort, the 

city utilized its online permitting system and expedited its reviews of 

pole attachment applications.

• Municipal Power Utility, Princeton, Illinois. The municipality initially 

installed fiber-optic cable to enhance its internal communications 

capacity. Princeton officials said the town’s mayor then led a 

subsequent effort to deploy broadband on a larger scale as part of an 

economic development initiative to attract industrial companies. They 

said the combined cost for equipment, design, and construction for 

both networks was approximately $1.2 million, and they told us they 

considered their utility crews’ previous experience installing the fiberoptic cable as an asset that helped attract an independent service 

provider to provide broadband service to customers over the network.

Existing Infrastructure and 

Potential Local Assistance

to Providers
Page 20 GAO-14-409 Broadband Deployment

Stakeholders we contacted, including project sponsors, broadband 

providers, and industry experts, told us that broadband deployment 

projects in unserved and underserved areas face challenging economic 

issues. As noted above, remote areas generally have high costs to deploy 

broadband due to the expense of deploying technologies over long 

distances and potentially difficult terrain to often relatively few potential 

subscribers. For these reasons, stakeholders told us that being able to 

cover costs with potential revenues and thus make a return on investment 

is a key issue to deploying broadband in unserved and underserved 

areas. Stakeholders told us that deployment costs can be reduced if there 

is easier access to rights-of-way, public facilities, and conduits already 

underground. For example, the opportunity to install cellular antennas on 

public water towers or thread fiber into existing conduit can reduce 

construction costs while leveraging public infrastructure. Stakeholders 

also told us that the costs of financing projects affect the projects’ overall 

costs. Project sponsors that could use public-financing, such as municipal 

bonds, had lower capital costs than private companies and thus could 

more cheaply finance their projects. Project sponsors that could use 

revenues from existing services, such as electricity subscribers, had 

funds available to deploy broadband which allowed them to leverage 

financing.

Project sponsors noted that the projects receiving federal funds were able 

to reduce their own costs of the project and obtain better financing terms 

due to the federal subsidy. However, project sponsors we contacted told 

us they are challenged by a lack of clear information about which federal 

funds are available for broadband deployment, which entities can make 

use of the funds, and how to apply for them. One sponsor from a small 

town said his staff lacked the expertise necessary to meet reporting 

requirements tied to using federal funds and his department did not have 

the financial resources available to hire consultants to assist. Another 

sponsor in a rural area said paying for telecommunications-engineering 

Stakeholders Cited 

Economic, Legal, and 

Policy Issues in 

Deploying Broadband 

in Unserved and 

Underserved Areas

Economic
Page 21 GAO-14-409 Broadband Deployment

consultants to estimate construction and operating costs was the main 

challenge the project faced, because without such estimates, the project 

could not apply for federal funds. We found some trade associations 

provided educational materials about federal broadband programs, but 

such associations typically only provided information or resources to their 

members. We also found the mission of some trade and industry groups 

steered them to advocate for a particular technology, rather than offering 

neutral advice on technological alternatives.

Project sponsors and industry experts we contacted told us that some 

states have laws that limit or ban companies that are not 

telecommunications companies from deploying broadband, on the basis 

that it creates unfair competition. As a result, project sponsors told us 

they considered their state’s legal environment when considering 

alternate broadband service options. For example, in Vidalia, Louisiana, 

an official told us that state laws bar any municipality from deploying 

broadband directly to consumers, so the city is planning to build and own 

a new fiber-optic network, but will not offer retail service in order to 

comply with the law and avoid competing with incumbent cable and 

telephone companies. Instead, a Vidalia official said they will seek to 

improve broadband service options by offering independent service

providers the opportunity to provide Internet, telephone, and video 

services over the network to the town’s approximately 4,000 residents. 

According to one legal expert who works with states that we contacted, as 

of May 2013, 20 states had in place restrictions on community broadband 

services or other public communications initiatives.22

 22“State Restrictions on Community Broadband Services or Other Public Communications 

Initiatives (as of May 2013).” The Baller Herbst Law Group, Washington. D.C. May 2013.

Some of the project 

sponsors we interviewed said that they had been affected by such laws. 

For instance, some, but not all, existing public providers in North Carolina 

are partially exempt from such requirements and can offer broadband 

service. We spoke to officials from one such provider, the city of Wilson, 

who said that they built their fiber-optic network before the state law that 

limits municipalities providing broadband service and were granted an 

exemption to operate the network which serves 6,000 accounts. 

However, the officials said they are not permitted to expand the network 

or otherwise provide telecommunications services outside the county due 

to the state’s requirements, which limit their ability to bring broadband 

Legal
Page 22 GAO-14-409 Broadband Deployment

service to unserved and underserved areas in the region. While California 

public entities are generally allowed to provide communications services, 

Community Service Districts have the authority to provide 

communications services only as long as no private person or entity is 

willing to do so.23 However, if such a private-sector operator emerges, the 

Community Service District must sell or lease its communications system 

to that person at “fair market value,” which could be below cost. An official 

from Lit San Leandro, a private California alternative provider, said two 

companies were formed as protection against incumbent provider 

lawsuits, which he said have been directed at some California 

municipalities for allegedly gaining unfair advantage by using city-owned 

conduit to compete against a private entity. A cable broadband provider 

told us that cable companies generally will not invest in broadband 

deployment in municipal areas that are already receiving public 

deployment funds because the public funds amount to subsidized 

broadband service, against which it is difficult for private companies to 

compete. According to the National Broadband Plan, Congress should 

make clear that state, regional, and local governments have the right to 

build broadband networks in the absence of private investment.24

Stakeholders we contacted, including project sponsors and industry 

participants, noted that there are several policy issues that affect 

broadband deployments in unserved and underserved areas. First, 

stakeholders expressed concern that an area’s inaccurate designation on 

the National Broadband Map can have financial consequences when the 

map deems an area as served even if not all premises in the area have 

access to broadband service. For example, an official from an industry 

group told us accurate mapping is important because without it, areas 

that are served only by dial-up service can be ruled ineligible for federal 

broadband deployment funds. In one case, the official said the National 

Broadband Map shows the top half of an Indiana county as covered by 

broadband service and the bottom half as not covered, but in reality the 

entire county only has access to dial-up service (which is not considered 

broadband). Stakeholders stated that it could be difficult to obtain funding 

for broadband projects if the entire area is deemed served, so the 

accuracy of the National Broadband Map is very important. The data on 

 23Cal. Govt Code § 61100 (af).

24National Broadband Plan, recommendation 8.19, page 153.

Policy
Page 23 GAO-14-409 Broadband Deployment

the National Broadband Map is displayed at the census block level and if 

one house or building has broadband access, the entire census block is 

deemed served. Stakeholders told us that this is an issue particularly for 

remote areas that are part of large census blocks and have premises 

located long distances from one another and from existing broadband 

networks.25

Second, project sponsors told us that while they are required to meet the 

federal benchmark of 4 Mbps download/1 Mbps upload when applying for 

some types of federal funding, this benchmark generally does not allow 

for the use of advanced Internet applications such as video conferencing 

for online education and telemedicine, which project sponsors said their 

communities would like to have. Stakeholders told us that often 

universities and hospitals are located far from rural communities and 

therefore the ability to use online education and telemedicine could 

reduce the need to drive long distances to get a higher education or see a 

medical specialist. However, stakeholders stated it was difficult to garner 

political support and funding for broadband technology projects that 

provide the higher speeds needed for these advanced applications when 

the areas have been designated as served by the National Broadband 

Map. Moreover, stakeholders told us that federal universal service funds 

were provided to projects that met the federal benchmark although 

communities wanted projects that provided higher speeds. Stakeholders 

told us that federal funds could be more effectively used by granting funds 

to projects that provided the highest broadband speeds rather than to 

projects providing the federal benchmark. On the other hand, officials 

from a cable association told us municipal projects in particular result in a 

mismatch between demand for service and the costs of providing that 

service, because they tend to deploy the most advanced technology—

fiber-optic—to the most remote areas with the least demand.

Third, stakeholders representing cable and telecommunications 

companies stated that they have policy concerns related to public funds—

both federal and local—being used in areas in which there was an 

existing broadband provider. A trade association representing cable 

companies noted that federal funds such as Recovery Act grants have 

been used in areas already served by private broadband providers, such 

 25A discussion of FCC actions that can help address National Broadband Map accuracy is 

discussed later in this report.
Page 24 GAO-14-409 Broadband Deployment

as cable companies, which built their networks with no public funds. The 

stakeholders representing cable and telecommunications companies 

stated that municipalities have used local public funds such as tax 

revenues to back municipal bonds in areas already served by private 

broadband providers. A trade association representing cable companies 

and an industry group representing small-community telephone 

companies told us that they believe that using public financing to 

“overbuild” in already served areas is unfair competition in that the private 

broadband provider has built its network with private capital and does not 

have the same financial advantages as the municipality. For example, an 

official from an industry group representing small community telephone 

companies told us that rather than overbuilding, municipalities should 

work with telephone companies to upgrade existing broadband 

infrastructure. The official said municipalities should not be in the 

business of providing broadband services themselves and, as evidence, 

cited bankruptcies and judicial opinions involving municipal networks in 

cities such as Provo, Utah, and Philadelphia, Pennsylvania. In addition, 

we heard from incumbent service providers that project sponsors that are 

public entities, such as municipalities, can use their existing infrastructure, 

property, and facilities to install broadband technologies which can reduce 

their deployment costs—an advantage that private companies do not 

have. These incumbent service providers noted that broadband networks 

proposed by alternate project sponsors generally have not targeted 

unserved areas without including already served areas, as it is more 

financially attractive to deploy networks in more densely populated areas 

that are often already served.
Page 25 GAO-14-409 Broadband Deployment

As one of its primary goals, FCC has several efforts under way to 

increase broadband deployment, efforts that help to address the 

economic and policy issues raised by stakeholders. In particular, FCC 

established the Connect America Fund in the November 2011 USF 

Transformation Order26 to provide funds for voice and broadband capable 

networks in areas where there is no private business case to provide 

broadband—one of the key challenges to deploying broadband.27 As of 

March 2014, FCC had authorized the Universal Service Administrative 

Company (USAC)28 to distribute almost $438 million from the Connect 

America Fund for projects that, according to FCC, would reach an 

estimated 637,000 households and businesses by 2016.29 As a condition 

of receiving funds, FCC requires an eligible telecommunications carrier 

(ETC) to offer voice and broadband services in its supported service area, 

meet certain broadband performance requirements, and report regularly 

on associated broadband performance measures.30 Many project 

sponsors we contacted said they would like the opportunity to receive 

support from the Connect America Fund to deploy broadband in unserved 

and underserved areas, but since they do not have the ETC designation, 

they are not eligible to receive funding. FCC told us that any entity, 

including cooperatives and municipalities that meet the requirements for 

becoming an ETC under Section 214 of the Communications Act, can 

petition for ETC designation.31

 26In the Matter of Connect America Fund, 26 FCC Rcd. 17663, 27 FCC Rcd. 4040 (2011).

However, project sponsors told us they 

27Within the Connect America Fund, FCC created a Remote Areas Fund with a budget of 

“at least $100 million annually” to ensure that even Americans living in the most remote 

areas of the nation, where the cost of providing terrestrial broadband service is extremely 

high, can obtain service. FCC sought comment on various issues relating to the fund, and 

in January 2013, FCC sought further comment on the design of the fund. Id., 17657. 

28USAC is an independent, not-for-profit corporation designated by FCC as the USF 

administrator. USAC collects contributions from telecommunications carriers and 

administers universal service support payments.

29This funding was provided under “Phase I” of the Connect America Fund to spur 

immediate broadband deployment to unserved locations. Id., 17657. For more information 

on FCC’s establishment of the Connect America Fund, see GAO-12-738.

30Only ETCs are allowed to receive financial support from the Connect America Fund. 

ETCs are designated by their states or FCC and have requirements that they must meet, 

including offering phone service to all premises in the designated service area, reduced 

rates for voice service plans for low-income populations, and the ability to operate during 

emergencies. 26 FCC Rcd., 17673.

31See 47 U.S.C. § 214(e)(2), (e)(6).

FCC Has Undertaken 

Various Efforts to 

Foster Broadband 

Deployment in 

Unserved Areas
Page 26 GAO-14-409 Broadband Deployment

believe they are ineligible to become an ETC because they do not provide 

the type of phone service that would make them eligible. Although project 

sponsors we contacted said they provide, or could provide, Voice over 

Internet Protocol (phone service that is provided over the Internet), they 

told us they believe such service does not satisfy the ETC phone service 

requirement. FCC officials told us that FCC has guidance on becoming an 

ETC and that Voice over Internet Protocol can be acceptable to satisfy 

ETC requirements.32

In addition, FCC has taken other actions related to broadband 

deployment in unserved areas and to address some of the policy issues 

noted above. For example, FCC acknowledged that some have claimed 

that the National Broadband Map is not completely accurate and adopted 

a process by which parties can challenge whether a location was in fact 

served by an existing provider.33 Furthermore, as part of FCC’s January 

30, 2014 Technology Transition Order, FCC adopted an experiment in 

which it intends to solicit proposals from non-traditional providers, 

including utilities and municipalities, to deploy wireline or wireless 

technologies in rural, high-cost areas.34

 32According to FCC officials, FCC has acknowledged that a provider of Voice over Internet 

Protocol phone service can obtain the rights available to telecommunications carriers 

under Title II of the Communications Act if it voluntarily holds itself out as a 

telecommunications carrier and complies with appropriate federal and state requirements. 

IP-Enabled Services, 20 FCC Rcd. 10245, 10268 (2005).

Providers will be eligible to 

receive Connect America Funds for projects in high-cost areas and must 

meet requirements similar to those of ETCs including providing service to 

all those in a designated service area, reduced rates for voice service 

plans for low-income populations, and the ability to operate during 

emergency situations. Providers are not required to be ETCs to apply but, 

if selected for the program, must be designated an ETC before receiving 

funding. FCC has stated that it will use the experiment to gain experience 

and generate data that could help inform its future policy decisions, 

33Locations served by existing providers are ineligible for support from the Connect 

America Fund. According to FCC, over 80 interested parties participated in the first 

challenge process to, for example, challenge the status of a census block as shown on the 

National Broadband Map.

34In the Matter of Technology Transitions, GN Docket No. 13-5 et al., FCC 14-5, 2014 WL 

407096 (F.C.C.) (January 31, 2014).The order is aimed at allowing FCC and the public to 

evaluate how customers are affected by the historic technology transitions that are 

transforming voice communications from copper wires to an all-Internet Protocol network 

using copper, co-axial cable, wireless, and fiber as physical infrastructure.
Page 27 GAO-14-409 Broadband Deployment

including those related to streamlining the ETC designation process and 

whether and how to make support from the Connect America Fund more 

widely available. In addition, FCC has stated that it will collect information 

on viable business models that could support the deployment of fiberoptic or other next-generation wired technology in rural areas, despite the 

challenges in doing so. FCC plans to also gather information on the 

conditions under which consumers would prefer next-generation wireless 

services instead of wireline services. Most recently, in April 2014, FCC 

told us that the FCC Chairman indicated that he had circulated to his 

fellow Commissioners a draft notice of proposed rulemaking to review the 

broadband speed benchmark, as well as other issues relating to 

implementation of the Connect America Fund.35

FCC also provides assistance to help unserved areas deploy broadband 

by participating in a federal working group that looks at streamlining 

policies and permitting on federal properties.36 Many rural areas have 

federal highways and lands and stakeholders told us that attaining rightsof-way is costly, so streamlining federal policies and permitting could 

expedite broadband deployments and lower costs. The Broadband 

Deployment on Federal Property Working Group consists of seven 

federal agencies that plan to develop recommendations to create a more 

coordinated and consistent approach in implementing agency 

procedures, requirements, and policies related to access to federal 

assisted highways, lands, buildings, and rights-of-way and the leasing of 

federal assets for broadband deployment.37

 35As of April 16, 2014, this draft notice of proposed rulemaking was an agenda item for 

FCC’s open meeting scheduled for April 23, 2014.

FCC also provides policy 

assistance by looking at ways in which broadband capacity and 

infrastructure could be shared, a step that could lower deployment costs 

and leverage private participation in broadband projects. For example, in 

response to a request from FCC’s chairman, FCC’s Intergovernmental 

Advisory Committee identified potential ways to use excess fiber capacity 

to accelerate broadband deployment through public-private partnerships 

36FCC was named as a member of the working group established by Accelerating 

Broadband Infrastructure Deployment, Exec. Order No. 13616, § 2, 77 Fed. Reg. 36903 

(June 14, 2012).

37Other members of the Broadband Deployment on Federal Property Working Group are 

the Departments of Defense, Interior, Agriculture, Commerce, Transportation, and 

Veterans Affairs, and the U.S. Postal Service.
Page 28 GAO-14-409 Broadband Deployment

in January 2013.38 Such opportunities include the lease, sale, or trade of 

broadband capacity with public and private partners, where such an 

arrangement advances public purposes.

We provided a draft of this report to FCC for its review and comment. 

FCC provided technical comments, which we incorporated into the report

as appropriate.

We are sending copies of this report to the Chairman of FCC and 

appropriate congressional committees. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Contact information and major contributors to 

this report are listed in appendix III.

Mark L. Goldstein

Director, Physical Infrastructure Issues

 38Intergovernmental Advisory Committee to the Federal Communications Commission 

Policy Recommendation 2013-2 Regarding Public-Private Partnerships in the Expansion 

of a World-Class Broadband Infrastructure (Sharing of Federally-Funded Broadband). 

Washington, D.C. January 7, 2013.

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-14-409 Broadband Deployment

This report provides information on (1) what is known about the 

alternative approaches unserved and underserved areas have used, or 

attempted to use, and some factors considered in broadband deployment 

decisions; (2) stakeholders’ views on broadband deployment issues in 

unserved and underserved areas; and (3) efforts FCC has undertaken to 

foster broadband deployment in unserved areas.

To gather information on the alternatives unserved and underserved 

areas used, or attempted to use, to deploy broadband, and on 

stakeholders’ views on deployment, we conducted a review of relevant 

published literature that included government reports, industry articles, 

and publications from associations, non-profits, and public policy research 

organizations. We also interviewed telecommunications stakeholders 

involved in broadband deployment to unserved and underserved areas to 

obtain their views on the deployment alternatives that unserved and 

underserved areas used, or attempted to use, their views on broadband 

deployment issues, and the extent of FCC’s role in broadband 

deployment in these areas. We reviewed and analyzed reports provided 

by these stakeholders as appropriate. Those we interviewed included 

associations representing consumers and industry, broadband 

consultants and providers, and officials from local agencies in selected 

areas where broadband projects were deployed or attempted. To identify 

stakeholders, we referred to prior published literature, and we considered 

the recommendations stakeholders made during our interviews. Table 1 

contains a detailed list of the stakeholders included in our study.

Table 1: List of Telecommunications Industry Stakeholders Interviewed

Stakeholder category Name 

Broadband consultants Jim Baller, Telecommunications Lawyer

Design Nine Consultants

Lookout Point Communications

Case study projects: cooperative broadband 

networks 

Camino Fiber Network Cooperative, El Dorado County, CA (a consumer 

telecommunications cooperative corporation)

Co-Mo Electric Cooperative, Tipton, MO

Douglas Electric Cooperative, Douglas County, OR

Midwest Energy Cooperative, Cassopolis, MI

Rappahannock Electric Cooperative, Fredericksburg, VA

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-14-409 Broadband Deployment

Stakeholder category Name 

Case study projects: municipal broadband 

networks

East Central Vermont Community Fiber Network, Royalton, VT

Greenlight, Wilson, NC

Powellink, Powell, WY

Princeton, IL

Utah Telecommunication Open Infrastructure Agency, UT

Vidalia Broadband Initiative, Vidalia, LA

Case study projects: private company broadband 

networks

Google Fiber, Kansas City, MO

Lit San Leandro, San Leandro, CA

Valu-Net, Emporia, KS

Vermont Telephone Company, Springfield, VT

Case study projects: regional consortiums 

broadband networks 

Gold Country Broadband Consortium, Auburn, CA

MCNC, Research Triangle Park, NC

MassBroadband 123, Westborough, MA

New Hampshire FastRoads, Keene, NH

Golden Bear Broadband—Northern California Regional Middle Mile Infrastructure, 

Northern CA

Vermont Telecommunications Authority, Montpelier, VT

Consumer advocacy group Institute for Local Self-Reliance 

Incumbent broadband providers Midcontinent Communications

Windstream Telecommunications

Municipal officials Kansas City, MO

National non-profit Connected Nation

Trade and industry groups American Public Power Association

Fiber to the Home Council

National Association of Regulatory Utility Commissioners

National Cable and Telecommunications Association

National Rural Electric Cooperative Association

National Rural Telecommunications Cooperative

National Telecommunications Cooperative Association

Rural Broadband Initiative

United States Telecom Association

Utilities Telecom Council

Source: GAO.

To gather in-depth information on the deployment alternatives that 

unserved and underserved areas used, or attempted to use, 

stakeholders’ views on deployment, and the extent of FCC’s role in 

deployment to these areas, we interviewed officials from 21 broadband 

network project cases studies and analyzed documents they provided to 

us. To select the 21 case studies, we analyzed the results of our literature 
Appendix I: Objectives, Scope, and 

Methodology

Page 31 GAO-14-409 Broadband Deployment

search and stakeholder interviews to assemble a list of potential 

broadband network projects in unserved and underserved areas and 

assigned each to one of four categories of networks established by: 

municipalities, private companies, regional consortiums, and 

cooperatives. The potential projects included some networks that were 

planned but did not come to fruition for various reasons. From these, we 

selected 21 case studies that represented all four project types and that 

included public, private, or a mixture of both types of funding. We sought 

geographic variety by assigning the cases to six U.S. regions: Midwest, 

Northeast, Northwest, South, West, and Mid-Atlantic, and as we selected 

cases, we included ones from each region. While there may be valuable 

lessons in the examples profiled in our case studies, their limited number 

does not allow us to generalize findings to the broader universe of all 

entities seeking to deploy broadband networks. The information we 

present on the deployment alternatives that have been used in our 21 

case studies represents information provided by project sponsors. It was 

beyond the scope of our work to assess the reliability of this 

information. It was also beyond the scope of our work to determine 

whether all, or any, of the examples deployed, or not deployed, are the 

most effective models for broadband network deployment to unserved 

and underserved areas.

To assess what existing broadband speeds and technologies were 

available in the case study areas and to compare them to those offered 

by our case study projects, we took a sample of 6 of our 21 case studies 

and collected data from those areas from the National Broadband Map, 

which measures national access to broadband as of December 2012, and 

depicts available broadband technologies and maximum advertised 

speeds that are available in the United States.39

 39See 

Our sample included 

projects from three municipalities and one each from the private 

company, regional consortiums, and cooperative categories. Because the 

National Broadband Map was designed to provide data for one address 

or one town, and 14 of our 21 networks operated regionally, covering 

multiple towns, we did not try to determine broadband speeds for all 21 of 

our case study locations. Instead, we took a sample of the case study 

networks. To choose the sample, we considered the 7 networks (4 

http://www.broadbandmap.gov. The National Broadband Map reports maximum 

advertised speeds, not speeds actually delivered. When cities are entered, as they were 

for our analysis, the map displays providers offering service in the census block that is in 

the center of that city.
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-14-409 Broadband Deployment

municipals out of 6, and 3 private companies out of 4) that operated in 

discrete locations, and chose 4 of those: 3 municipals and one private 

company. We chose a higher number of municipal networks because 

there were 6 in our case study sample, versus 4 private companies. 

Because we wanted to include examples of all 4 network types, we also 

chose one regional consortium network and one cooperative network. 

Even though all the networks from these two categories were regional in 

nature, and served large areas with multiple towns, we searched for and 

found one from each category that served a smaller population for a 

discrete area that was appropriate to enter into the National Broadband 

Map. For that reason, we included New Hampshire FastRoads, a regional 

network that directly serves customers with broadband in two New 

Hampshire towns, and Co-Mo Comm, a cooperative that serves 

customers in two Missouri towns as part of a broadband pilot project.

To gather information on stakeholders’ views on economic, legal, and 

other issues they believe affected their ability to deploy a network, we 

interviewed project sponsors where projects were deployed or attempted 

and associations representing consumers and industry. The economic, 

legal, and other issues identified by project sponsors should not be 

viewed as identifying all issues that could affect broadband deployment in 

unserved and underserved areas; however, the issues presented were 

consistently raised by the project sponsors. Also, the economic, legal, 

and other issues that we report on should not be viewed as being 

representative of all entities deploying broadband in unserved or 

underserved areas.

To gather information on actions, if any, FCC has taken to foster 

broadband deployment in unserved areas, we interviewed FCC officials 

and analyzed documents they provided us. We also interviewed industry 

experts, incumbent providers, project sponsors, and stakeholders. In 

addition, we analyzed the 2010 National Broadband Plan and its 

recommendation that FCC create the Connect America Fund to provide 

universal service funds in geographic areas where there is no private 

sector business case to provide broadband. We analyzed the 2011 USF

Transformation Order40

 40In the Matter of Connect America Fund, 26 FCC Rcd. 17663, 27 FCC Rcd. 4040 (2011). 

and the January 2014 Technology Transition 
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-14-409 Broadband Deployment

Order,41

We conducted this performance audit from May 2013 to April 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

and we interviewed FCC officials about how, if at all, FCC has 

made enhancements to Connect America Fund eligibility.

 41In the Matter of Technology Transitions, GN Docket No. 13-5 et al., FCC 14-5, 2014 WL 

407096 (F.C.C.) (Jan. 31, 2014).
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 34 GAO-14-409 Broadband Deployment

We gathered data on broadband projects in our 21 case study areas from 

interviews we conducted with project sponsors and, in some cases, from 

documents they gave us. As described in appendix I, we assigned each 

project to one of four categories. We collected information on scope, 

status, construction costs, and funding from officials we interviewed. 

Table 2 summarizes the information we collected from the project 

sponsors.

Table 2: Attributes of Broadband Projects in 21 Case Study Areas 

Project category

Project name and 

operating status Project description and infrastructure scope 

Project construction costs 

and federal funding

Cooperative Camino Fiber Network 

Cooperative

Planned (Inactive)

Network was to provide fiber-optic broadband 

service over an open-access network for 

approximately 50,000 residences in El Dorado 

County, California

New middle-mile infrastructure for multiple 

private Internet service providers to offer lastmile service

Construction cost estimates 

unavailable from sponsor

No federal funding

Cooperative Co Mo Comm, Co-Mo 

Electric Cooperative

Pilot broadband network: 

Operational

Potential expansion of pilot 

into larger broadband 

network: Planned

Fiber-optic network for residences and some 

businesses with Internet, telephone, and video 

services in central Missouri

New middle and last-mile infrastructure

$1.3 million pilot project

$60 million (estimated) 

network expansion

No federal funding 

Cooperative Douglas Fast Net, Douglas 

Electric Cooperative

Operational

Hybrid fiber-optic, DSL, and wireless network for 

residences and businesses with Internet and 

telephone service in Douglas County, Oregon

New middle and last-mile infrastructure

$6.5 million

No federal funding 

Cooperative Midwest Energy Cooperative

Internal communications 

network: Operational

Pilot broadband network: 

Operational

Potential expansion of pilot 

into larger broadband 

network: Planned

2 existing and 1 potential fiber-optic network 

projects involving new middle and last-mile 

infrastructure

Communications network delivers smart grida

applications for electric utility customers

Pilot and potential broadband networks are for 

serving residences, businesses, and community 

institutions in southwest Michigan with Internet 

and telephone service (with video service likely 

in the future)

$9.5 million utility

communications network, 

including $1.4 million USDA 

RUS loan

$2.9 million for pilot network

$52.8 million (estimated) for 

planned broadband network

Sponsors plan to seek FCC 

Connect America Fund 

funding for 50 percent of the 

construction cost of planned 

network

Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 35 GAO-14-409 Broadband Deployment

Project category

Project name and 

operating status Project description and infrastructure scope 

Project construction costs 

and federal funding

Cooperative Rappahannock Electric 

Cooperative

Marketing relationship with 

third-party satellite 

broadband provider: Planned

Rappahannock Electric Cooperative is 

considering a partnership with the National 

Rural Telecommunications Cooperative (NRTC) 

to offer its mostly residential customers in 22 

Virginia counties third-party satellite broadband 

Internet service which it will market to its 

members, with NRTC responsible for 

installation, customer service, and billing

No new Rappahannock Electric Cooperative 

infrastructure 

No cost to Rappahannock 

Electric Cooperative, all costs 

borne by NRTC

No federal funding

Municipal network East Central Vermont 

Community Fiber-optic 

Network

Operational

Fiber-optic Internet and telephone service for 

residences and businesses in 23 Vermont 

municipalities

New infrastructure for last-mile service 

$5 million (estimated)

No federal funding 

Municipal network Greenlight

Operational

Fiber-optic Internet, telephone, and video 

service for businesses, residences, schools, and 

municipal utilities in Wilson, North Carolina

New infrastructure using existing city-owned 

utility lines for last-mile service 

$35 million

No federal funding

Municipal network Powellink

Operational

Fiber-optic Internet, telephone, and video 

service for businesses, residences, schools, a 

hospital, a junior college, and municipal 

government entities in the 6,000 person town of 

Powell, Wyoming

New infrastructure using existing city-owned 

utility lines initially for one exclusive private 

Internet service provider to offer last-mile 

service, with other providers able to offer service 

in the future

$5 million

No federal funding 

Municipal network Princeton

Fiber-optic and broadband 

over powerlineb networks: 

Operational

Fiber-optic Internet service to 9 residential 

customers, 75 businesses, schools, a hospital, a 

library, and municipal entities in the 7,800 

person town of Princeton, Illinois

Limited-capacity broadband over powerline 

Internet service to residents desiring basic 

service

Both networks: new infrastructure using existing 

city-owned utility lines for last-mile service 

$1.3 million for both networks

No federal funding

Municipal network Utah Telecommunication 

Open Infrastructure Agency

Operational

Fiber-optic broadband service over an openaccess network connecting municipal 

government entities and community institutions, 

and leasing access to private service providers 

that provide Internet, telephone, and video 

services to customers in 10 Utah municipalities

New middle-mile infrastructure using existing 

city-owned utility lines in some locations for 

multiple private Internet service providers to 

offer last-mile service

$177 million, including $16.2 

million NTIA BTOP grant, $21 

million of an up to $66 million 

USDA RUS loan (withdrawn 

by RUS after $21 million was 

loaned)
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 36 GAO-14-409 Broadband Deployment

Project category

Project name and 

operating status Project description and infrastructure scope 

Project construction costs 

and federal funding

Municipal network Vidalia Broadband Initiative

Planned

Fiber-optic network for advanced utility 

applications will be expanded into hybrid fiberoptic and wireless network for Internet, 

telephone, and video services to customers in 

the 4,000 person town of Vidalia, Louisiana

New middle-mile infrastructure using existing 

city-owned utility lines for private Internet service 

providers to offer last-mile service 

$11.7 million

No federal funding

Private company Google Fiber

Operational

Fiber-optic broadband service providing Internet 

and video service to residences in Kansas City, 

Missouri

New infrastructure using existing utility-owned 

lines for last-mile service

$250-300 million (estimated)

No federal funding 

Private company Lit San Leandro

Original network: 

Operational

Network expansion

operational by the end of 

2014: Planned

Fiber-optic network Internet service over 150 

businesses and some community institutions 

including schools, hospitals, and a library, in 

San Leandro, California

Original and expansion: new and existing 

infrastructure using city-owned conduit to install 

fiber-optic lines for last-mile service

$4-5 million (estimated)

$2.1 million grant from 

Economic Development 

Administration

Private company Valu-Net

Operational

Fiber-optic network serving over 305 businesses 

and over 400 residences with Internet, 

telephone, and video in the 28,000 person town 

of Emporia, Kansas

New infrastructure for last-mile service 

$12-13 million (estimated)

No federal fundingc

Private company Vermont Telephone 

Company

Operational

Hybrid fiber-optic and wireless network serving 

businesses, residences, a local energy utility, 

and community institutions in 14 Vermont 

villages with Internet, telephone, and video

New middle-mile infrastructure using existing 

telephone utility lines for middle-mile and lastmile service 

$129.5 million, including 

$81.69 million USDA RUS 

grant, $35.01 million USDA

RUS loan, $8.96 million NTIA 

BTOP grant 

Regional consortium Gold Country Broadband 

Consortium

Planned

Broadband network for 5 counties in northern 

California to be built, owned, and maintained by 

private Internet service providers using a variety 

of technologies

New middle-mile infrastructure for multiple 

private Internet service providers to offer lastmile service

Construction cost estimates 

unavailable from sponsor

No federal funding

Regional consortium MCNC 

Operational

Fiber-optic, open-access network providing 

connectivity to 2,700 community institutions in 

82 North Carolina counties, with capacity leased 

to a variety of private telecommunications 

companies, cooperatives, and local government.

New middle-mile infrastructure for multiple 

private Internet service providers to offer lastmile service to residences and businesses. 

$144 million

$104 million NTIA BTOP 

grant
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 37 GAO-14-409 Broadband Deployment

Project category

Project name and 

operating status Project description and infrastructure scope 

Project construction costs 

and federal funding

Regional consortium MassBroadband 123

Operational

Fiber-optic, open-access network serving 122 

towns in western and central Massachusetts 

over a middle-mile backbone that connects 

more than 1,200 community institutions, 

including schools, libraries, and hospitals

New middle-mile infrastructure for multiple 

private Internet service providers to offer 

Internet, telephone, and video services 

$90 million (estimated)

$45.5 NTIA BTOP grant

Regional consortium New Hampshire FastRoads

Operational

Fiber-optic, open-access network providing 

connectivity to 233 community institutions in 19 

communities in western New Hampshire, and 

1,300 homes and businesses in 2 towns, with 

last-mile capacity leased to private providers

New middle-mile infrastructure to connect 19 

towns, which can be expanded for last-mile 

service by private Internet service providers 

$7.6 million

$5.4 NTIA BTOP grant

Regional consortium Golden Bear Broadband -

Northern California Regional 

Middle Mile Infrastructure

Planned (Inactive as of 

February 2014)

Hybrid fiber-optic and wireless open-access 

network for businesses, residences, and 

community institutions in 16 counties in northern 

California with Internet, future service was to 

include telephone (through a 3rd party 

contracted company), and video

New middle-mile infrastructure for multiple 

private Internet service providers to offer service

$138 million (estimated)

No federal funding, although 

sponsors had planned to seek 

grants from FCC’s Connect 

America Fund and loans from 

USDA’s Rural Broadband 

Access Loan and Loan 

Guarantee Program

Regional consortium Vermont 

Telecommunications 

Authority

Operational

The state-chartered Authority provides grants 

using a variety of technologies for open-access 

middle and last-mile broadband projects in 

unserved and underserved areas, which 

recipients use for broadband expansion, cellular 

service infrastructure, and fiber-optic 

infrastructure projects for businesses, 

residences, local government, and community 

institutions

New middle and last-mile infrastructure leased 

to multiple Internet service providers to offer 

service 

$60 million (since 2007 

inception, however besides 

deploying broadband 

infrastructure, funds also 

have gone toward broadband 

mapping and cellular projects)

$35.8 million in federal 

funding, including $33.4 

million NTIA BTOP grant, 

$1.6 million Economic 

Development Administration 

grantd $219,898 Northern 

Borders Regional 

Commission grant

Source: GAO based on project sponsor interviews and documents.

a According to the Department of Energy, a “smart grid” is an automated, widely distributed energy 

delivery network characterized by a two-way flow of electricity and information made possible by 

distributed computing and communications. Smart grid systems can monitor everything from power 

plants to customer preferences and individual home appliances, and they allow real-time information 

that can better balance supply and demand.

b FCC defines broadband over powerline as the delivery of broadband over the existing low- and 

medium-voltage electric power distribution network. Broadband over powerline speeds are 

comparable to DSL and cable modem speeds, and can be provided to homes using existing electrical 

connections and outlets. See http://www.broadband.gov/broadband_types.html.

c Valu-net received a low interest Small Business Administration loan through a local bank.
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 38 GAO-14-409 Broadband Deployment

d The Department of Commerce’s Economic Development Administration has programs that support 

the construction of public infrastructure, which could include broadband infrastructure.

We compared existing broadband network speeds to those offered by 

alternative fiber-optic networks for a sample of our case study locations, 

as shown in table 3. We found that speeds for wired services in some of 

our case study project areas varied depending on the extent of fiber-optic 

technology deployed, and that alternative network speeds were generally 

faster than speeds offered by existing networks. Our results showed that 

some alternative networks offered speeds substantially higher than 

existing networks, while for others the differences were slight. Alternative 

network speeds differed less from incumbent cable company network 

speeds than they did from telephone company DSL networks. As shown, 

wireless service was available in all the six areas, though speeds were 

much slower than wired technologies. Because each of the six areas 

featured multiple wireless providers, for our illustrative purposes, we 

chose the one provider that served all areas, Verizon, for inclusion in the 

table.

Table 3: Selected Examples of Wireline and Wireless Broadband Technology and Speeds for Alternative and Existing 

Networks

Case study project 

network Existing wired networks

Existing

wireless network

Municipal: Greenlight

Fiber-optic network

Download: 100 Mbps – 1 

Gbps

Upload: 100 Mbps – 1 

Gbps

@ Communications

DSL network

Download: 10 – 25 Mbps

Upload: 1.5 – 3 Mbps

Centurylink

DSL network

Download: 10 – 25 Mbps

Upload: 1.5 – 3 Mbps

Time Warner Cable

Cable network

Download: 50 – 100 

Mbps

Upload: 3 – 6 Mbps

Verizon

Mobile Wireless

Download: 768 kbps –

1.5 Mbps

Upload: 200 – 768 kbps

Municipal: Powellink

Fiber-optic network

Download: 10 – 25 Mbps

Upload: 3 – 6 Mbps

Centurylink

DSL network

Download: 10 – 25 Mbps

Upload: 768 kbps – 1.5 

Mbps

CSC Holdings

Cable network

Download: 10 – 25 Mbps

Upload: 768 kbps – 1.5 

Mbps

Verizon

Mobile Wireless

Download: 768 kbps –

1.5 Mbps

Upload: 200 – 768 kbps

Municipal: Princeton

Fiber-optic network

Download: 1 Gbps +

Upload: 1 Gbps + 

Comcast

Cable network

Download: 100 Mbps – 1 

Gbps

Upload: 10 – 25 Mbps

Frontier Communications

DSL network

Download: 3 – 6 Mbps

Upload: 768 kbps – 1.5 

Mbps

MTCO

DSL network

Download: 6 – 10 Mbps

Upload: 768 kbps – 1.5 

Mbps

Verizon

Mobile Wireless

Download: 10 – 25 Mbps

Upload: 3 – 6 Mbps
Appendix II: Selected Information on 

Broadband Projects in 21 Case Study Areas

Page 39 GAO-14-409 Broadband Deployment

Case study project 

network Existing wired networks

Existing

wireless network

Private: Valu-Net

Fiber-optic network

Download: 50 – 100 

Mbps

Upload: 25 – 50 Mbps

AT&T

DSL

Download: 10 – 25 Mbps

Upload: 768 kbps – 1.5 

Mbps

Cable One

Cable

Download: 50 – 100 

Mbps

Upload: 1.5 – 3 Mbps

Verizon

Mobile Wireless

Download: 10 – 25 Mbps

Upload: 3 – 6 Mbps

Regional: New 

Hampshire FastRoads

Fiber-optic network

Download: 5 – 50 Mbps

Upload: 5 – 50 Mbps

Comcast

Cable network

Download: 100 Mbps – 1 

Gbps

Upload: 50 – 100 Mbps

Fairpoint

DSL network

Download: 1.5 – 3 Mbps

Upload: 768 kbps – 1.5 

Mbps

Verizon

Mobile Wireless

Download: 768 kbps –

1.5 Mbps

Upload: 200 – 768 kbps

Cooperative: Co-Mo 

Comm

Fiber-optic network

Download: 100 Mbps – 1 

Gbps

Upload: 50 – 100 Mbps

Centurylink

DSL network

Download: 10 – 25 Mbps

Upload: 1.5 – 3 Mbps

Verizon

Mobile Wireless

Download: 10 – 25 Mbps

Upload 3 – 6 Mbps

Source: GAO analysis based on data gathered from the National Broadband Map and project sponsors.
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 40 GAO-14-409 Broadband Deployment

Mark Goldstein, 202-512-2834, or goldsteinm@gao.gov.

In addition to the contact mentioned above, Sally Moino, Assistant 

Director; Amy Abramowitz; Gary Guggolz; Bert Japikse; Maureen LunaLong; SaraAnn Moessbauer; Joshua Ormond; and Hai Tran made key 

contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(543325)
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