Alaska's unique geography is unlike any other state in the nation when it comes to the rugged, untouched terrain that exists in nearly every region. This also brings unique construction challenges and higher costs for basic infrastructure, especially in rural areas. One of the biggest obstacles for providing cheap affordable broadband for Alaskans so far has been keeping construction and maintenance costs down. On a national index, Alaska ranks as one of the most challenged in basic supply costs. Shipping materials to Alaska is hard and providing the necessary equipment in extreme rural environments like the north and western parts of the state is even harder.
The Problem in Alaska
When a public or private investment or partnerships in broadband become feasible, the population base is often too small to make economic sense because the service cannot be supported by the small number of subscribers and their monthly dues. Unusual barriers also exist when it comes to maintaining existing infrastructure, such as the volatile weather that can render repair efforts too dangerous and the extremely high cost of services making it unaffordable for essential anchor institutions such as schools and hospitals.
The topography of Alaska creates unique hardships around providing effective, affordable broadband.
The vast majority of the population in Alaska, the areas where the largest property tax bases are, are concentrated in the interior, south and southeast areas of the state.
The municipality of Anchorage contains about 40% of the states population and the total population of the state is only 740,000. Alaska has approximately 1.3 people per square mile, the lowest population density of any state in the union by quite a fair amount. Alaska is also the only state in the nation without both an income and sales tax meaning the primary way of collecting money for large capital projects comes from oil royalties and/or oil taxes. When oil prices are depressed, capital spending is also depressed. When a rural community, or even a place like Fairbanks, wants to raise money for public projects like broadband infrastructure there is only a limited amount they can collect without overburdening the relatively small tax base.
A large part of the state, notably rural parts, are inaccessible by roads or other traditional transportation means.
Lack of infrastructure:
Alaska has already done a great deal to develop "last mile" infrastructure, the end locations of broadband such as schools, hospitals and businesses. Our state has also done a great deal of work on retrofitting anchor institutions for broadband. The big lagging factor for Alaska is "middle mile" infrastructure which is the process that gets high speed, consistent, and affordable internet from point A to point B. Currently fiber optic cables only cover a small portion of the state and many rural residents, including many in Fairbanks, don't have access to these cables. Many have to rely on satellites for access or microwave transmissions, both of which can be less reliable and agonizingly slow.
Source: RCA Report 2017
Currently, Alaska faces many economic drawbacks as a result of lack of broadband access. A report commissioned by the state in 2014 shows, based on the census data from 2011, that a 1% increase in broadband connectivity could result in:
direct economic growth in the economy of 67.7 million dollars
$221,743 in saved health care costs
3,276,906 average annual pounds of carbon emissions cut
$49,184,413 in direct annual income growth
Source: Statewide Broadband Task Force Report 2014