The U.S. broadband industry continues to invest record amounts of money into infrastructure to close the digital divide. USTelecom recently reported that providers spent $94.7 billion in 2023, the second highest industry capex in 22 years and more than 23 percent above the historic annual average. 

Overall, broadband providers have put more than $2.2 trillion into network capital investment since 1996. The spending comes at a time when there are also record taxpayer funds allocated toward broadband expansion across the United States. The Broadband, Equity, Access, and Deployment (BEAD) Program will dole out $42.5 billion for infrastructure growth, with more than 100 other federal programs handing out tens of billions of dollars more. That doesn’t even account for state and local grant programs that allocate yet more taxpayer money. This $42 billion will be spent over the course of a number of years.

If history is any guide, the BEAD money will be slowly spent and wasted, as evidenced by past wasteful spending on government broadband. The $94 billion shows that the private sector is taking the lead on deploying broadband while the federal government lags.   

The year 2023 trails only 2022 for provider infrastructure spending over the past two decades. Providers invested $102.4 billion in 2022. 

“Investment this past year reflects a range of activities, including expansion of fiber deployments, integration of fiber and mobile networks, increased rural broadband construction, and network capacity additions to keep pace with advances in artificial intelligence and other applications that are fueling rising bandwidth demands among consumers and across the economy,” USTelecom noted.

The organization pointed to “an intensely competitive marketplace” and “strong consumer demand” as the reasons investment was so high in 2023. 

The industry aggregate comes from capital expenditure data from major wireline, wireless, and cable broadband providers. USTelecom noted that the $94.7 billion figure is a conservative estimate because of the difficulty in obtaining consistent and comparable data from smaller wireline providers, electric cooperatives, and satellite broadband providers. The overall spending is likely at least $2 billion more. 

The report noted that broadband is among the most cost-effective consumer services, with internet costs going down in many instances. 

As investment increases, prices go down and speeds get faster. USTelecom’s 2023 Broadband Pricing Index showed an 18 percent drop year-over-year in the price of providers’ most popular broadband speed tier and a 6.5 percent drop in the price of providers’ fastest speed tier. Meanwhile, the cost of overall goods and services were up 5 percent during the same period. When accounting for inflation, prices for both the most popular tier and the fastest tier are down about 55 percent since 2015. 

The USTelecom report shows that private broadband providers continue to push investment and innovation in the marketplace, and that taxpayer funds should supplement and not be the main driver of the efforts to connect all Americans to high-speed internet.