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Faster internet is coming, but only for a few

Data: FCC; Note: Non-mobile broadband speeds are 25 Mbps download/3 Mbps upload, Mobile LTE are 10 Mbps/3 Mbps; Chart: Andrew Witherspoon/Axios

Broadband technologies are getting better and faster — but access to them is still concentrated in metro areas and suburbs, leaving vast swaths of the country with marginal service or nothing at all.

Why it matters: Benefits of the broadband advances are mostly going to consumers who already have plenty of options for robust internet connections. Despite efforts to narrow the digital divide, rural areas, small towns and low-income neighborhoods in big cities still struggle to have access to reliable and affordable broadband service.

Driving the news: The Federal Communications Commission last week voted to require broadband service providers to report more detailed data about where their networks are available after criticism that the agency's data overstates broadband access. The agency also proposed directing $20 billion over 10 years to fund network expansion in unserved places.

Last week, Verizon announced that 5G is now available in parts of four additional cities — Washington, D.C., Atlanta, Detroit and Indianapolis — and says it plans to have 5G service in more than 30 cities by the end of the year. However, its new service in some cities like Chicago has been spotty and limited. (Here's a rundown of the rollouts.)

  • AT&T has expanded its 5G access to 20 cities since launching in December of last year.  It’s now focused on acquiring more “mid-band” wireless spectrum to bring 5G to less populated areas. To date, most of its efforts are concentrated in cities and focus on servicing businesses. 

T-Mobile and Sprint, who pitched their merger as a way to help narrow the urban-rural digital divide, now have regulator approval for the deal under the condition that the companies unload assets to Dish to create a fourth national wireless carrier.

  • FCC regulators told reporters last week that the two companies could face billions in penalties if they don’t commit to using their combined spectrum, including a lot of coveted “mid-band” spectrum, to meet build-out requirements for rural populations. 
  • Yes, but: State AGs have sued to block the deal, and there's skepticism about Dish's execution of that plan.

The big picture: Even though many rural households may have the ability to connect to the internet, consumers with low download speeds won't be able to participate in the online economy by video chatting, streaming video or telecommuting.

  • Demand for mobile services is exploding: Gig economy workers, such as Uber and Lyft drivers or those who make deliveries for InstaCart and DoorDash, rely on smartphone connections to schedule jobs and find routes.
  • Lower-income families are more likely to rely on smartphones for internet access.

Between the lines: 5G networks using the highest-speed airwaves won't reach rural areas for years because the signals can't travel very far.

The subsidies proposed by the FCC will be open to companies like small community providers, co-ops and locally run wireless providers who serve rural areas where the national carriers won't build.

  • $20 billion is a good start, but "it's still going to be tough to get coverage everywhere," said Shirley Bloomfield, CEO of NTCA, which represents rural, community internet providers.

What to watch: New advanced technologies are aiming to fill the gaps left by traditional telecom providers.

  • SpaceX and OneWeb are launching constellations of satellites to beam broadband down to earth.
  • A startup called UbiquitiLink is testing the first "cell towers in space" to provide satellite-powered internet service directly to consumers' cellphones in rural areas.
  • The catch: Signals from space have to travel a long way, so the connection is slower than earth-bound internet options. But in unserved places, it's better than nothing.

The bottom line: There's significant overlap between the parts of the country that have been left behind economically over the past decade and those that are broadband deserts.

What's next: Expect rural broadband to be a become a talking point on the presidential campaign trail in the coming year.

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