Fiber and 5G-based fixed-wireless access (FWA) systems are expected to take a significant portion of the federal government’s push to invest nearly $43 billion toward expanding the reach of broadband connectivity through the Broadband Equity, Access and Deployment (BEAD) program, while the chances for satellite connectivity to tap into those funds remain in a distant orbit.

Louisiana was recently the first state to request access to BEAD funds, which then unlocks the ability for the state to move from the planning phase to the implementation phase for the BEAD program. States have until today to submit their initial proposals.

Andrew Fedele, director and technology, media and telecommunications senior analyst at consulting firm RSM, told SDxCentral in an interview that those funds are likely to flow toward fiber and FWA deployments based on the current flow of customers toward those two connection methods. He noted that FWA-based broadband providers like Verizon and T-Mobile US are accounting for a majority of broadband connection growth, while fiber-based broadband providers are currently growing faster than cable-based providers.

“I think those two are going to be the two big winners that are going to see a lot more investment that you wouldn't have otherwise seen,” Fedele said. “If we look at the market without any government funding, we have already seen that transition happen and I expect that trend to continue. If companies are seeing that there's a demand for fixed wireless and fiber out there and now we're getting federal funding to go and do it, why not?”

Fiber is viewed as the biggest beneficiary of BEAD funds based on the ability for fiber runs to reliably support high speeds and a lot of connections. That speed component is an increasingly important consideration being pushed by the Federal Communications Commission (FCC).

FWA is also gaining traction, with deployed networks showing increased capabilities due to operators injecting more spectrum into those systems. FWA networks can also be more easily deployed compared to fiber.

“Fiber has the challenge of getting all the fiber in the ground and getting the connectivity to each house,” Fedele said. “I think that's where companies have to really analyze where they are serving, what are the demographics from both the population and the physical space itself, and decide that maybe fixed-wireless is the best way to go as I can more easily cover more subscribers.”

One significant challenge for expanding both fiber and FWA footprints could come from finding enough people to help with installing the necessary infrastructure. Fedele noted that the current workforce potential was tight and that “it’s going to be hard to find the labor.”

This could have a larger impact on straight fiber deployments that can be more labor-intensive to deploy relative to the number of people served versus a FWA deployment that can rely more on spectrum propagation.

One solution could come from a sustained housing boom where “there could be some synergy in laying the fiber with the increased need for housing in these areas and in these communities, especially with the expanded move to rural during the pandemic and the ongoing repercussions of that,” Fedele said.

While Fedele expects fiber and FWA to benefit most from BEAD investments, the same can’t be said for satellite due to cost and use-case challenges.

“It’s pretty expensive for broadband,” Fedele said of satellite broadband connectivity options. “If you think about participating in affordable connectivity programs it does not really make sense for both parties.”

The FCC recently re-affirmed this hurdle in denying a bid by LTD Broadband and Space Exploration Technologies (Starlink) to receive funding from the Rural Digital Opportunity Fund. LTD Broadband was angling to receive more than $1.3 billion in support and Starlink nearly $900 million.

The government agency last year stated that “funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States.”

“We must put scarce Universal Service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks,” FCC Chairperson Jessica Rosenworcel wrote in the ruling. “We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”

Rosenworcel added that while “Starlink’s technology has real promise,” the need for users to purchase a $600 dish to connect to the service called into the question the use of government funds to further support the development and deployment of the service.

That ruling was reconfirmed earlier this month.

Fedele noted that satellite broadband connectivity options are also best used for more mobile use cases as opposed to fixed services, which are central to the expansion plans tied to BEAD funding.

“The best benefit of Starlink is that it’s really helpful for things in motion,” Fedele said. “People that I know that have it and love it are friends with RVs, or if you need boat connectivity or on cruise liners. … I don't know if it makes the most sense for rural communities for long-term connectivity. Maybe down the line it will and I think maybe as more companies get into satellite IoT service, you'll see more competition and prices coming down. But I think the costs and barriers to entry are still high enough that your average consumer, or maybe your lower-income consumer, probably isn't going to gravitate there. And if they do, what happens when the funding runs out? They likely don't stay there.”

Regardless of connection method, the BEAD program is set to boost U.S.-based production of infrastructure equipment needed to support the expansion of broadband connectivity. The government has linked BEAD funding with the need for nearly all components to be built in the U.S., which has fueled a rush by equipment providers to bolster their domestic manufacturing capabilities.

Fedele noted that this is indeed a significant opportunity for domestic manufacturing, though vendors will need to stay vigilant in tracking that production.

“It will be something that the companies will have to track and make sure that they are meeting all the requirements of the funding to make sure that they're not out of compliance,” Fedele said. "There's just a ton of opportunity for companies to take these funds and really build out more access to Americans, to really bridge the digital divide.

"I think companies are gonna have to be smart to make sure that they're in compliance with any regulation, whether it be cybersecurity regulation, government funding regulation or tax regulation. But if deployed accordingly, there really could be a large user-base growth for companies that successfully take the funds and do bridge that digital divide."