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The US Rural Broadband Crisis
Ian Lamont writes "Rural US residents don't have the same kind of access to broadband services as those who live in urban or suburban areas. According to the federal government, just 17% of rural U.S. households subscribe to broadband service. But the problem is more than a conflict between Wall Street and small-town residents wanting to surf the 'Net or play Warcraft — the lack of broadband access prevents many businesses from growing and diversifying rural economies, as it's expensive or impossible to get broadband. From the article: 'Soon after moving to Gilsum, N.H. (population 811), [Kim] Rossey learned that he couldn't get broadband to support his Web programming business, TooCoolWebs. DSL wasn't available, and the local cable service provider wasn't interested in extending the cabling for its broadband service the three-tenths of a mile required to reach Rossey's house — even if he paid the full $7,000 cost. Rossey ended up signing a two-year, $450-per-month contract for a T1 line that delivers 1.44Mbit/sec. of bandwidth. He pays 10 times more than the cable provider would have charged and receives one quarter of the bandwidth.' The author also notes that larger businesses are being crimped, from a national call center to a national retailer which claims 17% of its store locations can't get broadband."
It isn't just Rural economies that are affected by this.
We have a couple of clients in the exurbs who do logistics: mainly deliveries into cities. The warehouses are in the exurbs where land is cheap.
But they can't get broadband at the warehouses. Remote assistance means "bring the laptop to Panera so I can remote in."
Most rural areas have not been deregulated. Unless the area was a "Bell Holdings Company" (owned by Ma Bell before the company was split), regulations still exist preventing competition in that region. Whoever owns the area has every [legal] right to say no to expansion.
I wrote an earlier post on the subject about the same thing going on in my neck of the woods.
I grew up in rural North Dakota. Our small town (population about 500) has the Northwest Communication Cooperative http://www.nccray.com/ They provide phone/dialup/DSL/cableTV access. The co-op seems to have worked fairly well back home. I don't know if that's not normal or not... I just grew up with it there.
Where I grew up (Mojave Desert) there was a Beach Access Crisis. It was far harder for us to enjoy water activities than those people in urban areas like Los Angeles and San Francisco. But the smog and traffic in LA was hideous. In California, we have better access to fresh fruit and vegetables than people in many parts of the country.
Broadband is not "unavailable", it is merely more expensive. Wherever you live, some things will be more available and others will be less available. Get over it. The fees that were (stupidly, I believe) tacked on to all phone bills to fund rural access are still there - just a big pot of cash that the telco's squabble over even though routing phone service to rural areas is no longer a real issue.
Whenever I hear talk of rural access fees, I wonder why the same people aren't championing an urban affordibility fee. Tacking a huge additional fee onto transfer and property taxes in rural areas to help fund the ability to live in San Francisco or Silicon Valley makes about as much (non)sense.
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"You are not remembered for doing what is expected of you." - Atul Chitnis
I'm in the same situation. I was originally going to move the 56Kb line out to the new house in the country and host my webserver there. Sure, it would cost a lot per month (same as his T) but that's the price of doing business. Then I got a sweetheart deal from my local ISP: help in exchange for hosting, plus a 384Kb frame relay line to my house. That was great for a few years, but it wasn't costing them any less, and when they quit using frame relay, they had to drop my home connection.
No cable on our road; too far out for DSL. I had used dialup, but I'd rather choke myself to death with a hampster. Tried satellite, but interactive use over a satellite is like shooting yourself in the foot, day after day. Finally found a local business which had cable with line of sight. I pay him $20/month rent to host a cablemodem, router, and antenna on the roof. I pay the cableco for a 5MB/512KB business connection, and I'm all set.
Don't piss off The Angry Economist
Regardless. Federal taxes have been collected and redistributed to the ISP's to fund rural "information superhighway" infrastructure. Where did the money go? Did the ISP's just steal it and refuse to build the infrastructure? Do we need to recover the funds through taxes on the ISPs themselves? It has been paid for, now it needs to be built.
Second, internet access in rural areas is a huge boon to job growth in those areas where land is cheap. It is a win for everyone involved. I'd rather "outsource" to rural America than to India.
Third, huge urban sprawl is an ecological nightmare. The government needs to provide incentives to redistribute populations on a wider geographic basis. Not having access to basic business infrastructure makes this very very hard.
I moved to a rural locations about a year ago. Before moving I gave the address and set up an appointment with time warner to install the road runner service. The guy came out a week after I moved in and couldn't find the cable lines to the house. Evidently it had never been hooked up at this address but was in their database for coverage. SO i Figure good, they will run another cable the 200 yards from the drop at one of the neighbors house. No, they didn't do that. Instead the sent an engineering guy out who surveyed the property and did some study and sent me a letter 2 weeks after that saying it wasn't financially feasible to connect me to the network. I couldn't get specifics of what stopped them just that they wouldn't make money from it.
Fortunately, I can get a 3 meg DSL connection that seems to do a little better at times so I wasn't too disappointed outside not having the Internet for almost 2 months after being told it would be hooked up a week after my move. My neighbor on one (about 200 yards away) side can get road runner and on the other side (about 6-700 yards away) uses satellite but there is a $1500 installation fee in my area that needs to be paid before you get the service.
Checking this stuff out first might not always work. AS for the article, I'm sure there would be something available cheaper then $450 a month but there is a need to service these areas. Time Warner and the Telco's offering DSL or Internet are doing so because they had all the competition blocked while they were setting up their networks and running the infrastructure. They have an unrepairable advantage over any startup that might want to service the area and would likely use this advantage to undercut pricing models and run the other companies out of business if there ever did turn out to be a market worth having (profitable).
Seriously, one of the towns/villages along my normal work route - population under 1500 - is halfway up a mountain, far enough from the city to be pain to install high-speed, and yet still has internet.
See here for more info. Commercial broadband internet has been available for years, and residential popped in more recently. Here's another town with a population of a little under 3000. We've got areas that are little more than a smudge on the map that have decent broadband, since both Telus and Shaw cable have a good trunk. On top of that, smaller or more-local providers such as OCIS provide internet via shared/leased connections (with their own infrastructure added to make the last mile) and other technologies such as wireless etc... without being strangled off by the big guys
Sorry, but if we Canucks can manage it, the US can too. I'm fairly sure it's a case of piss-poor implementation, support, and just basic greed that keeps it from happening.
And before people start pointing out that the US has more population to reach, I'd like to point out that Canada has plenty of area, and plenty of open space between locations but still manages to for the most-part get internet out to nowheresville across plenty of long-empty distance and nasty unpleasant environmental conditions (no, we don't have 365 snow here, we go range from as much as +40c/104F in summer to -40C/-40F in winter, so we get it *all*)
This is true, but the fact that businesses basically get held up at gunpoint for T1 lines with a fraction of the bandwidth at 10x the price that residential users can get is unconscionable.
I personally believe that the greed of the phone companies with respect to T1 pricing is at the very core of why the US is losing (and losing badly) on the bandwidth front with respect to the rest of the world. We are getting worse broadband, at higher prices than EVERYONE else in the WORLD. Sometime in the next decade this is going to technologically cripple the US and we will lose the rest (we've lost a lot already) of the leadership we have in the internet. The next google, youtube, myspace, etc. may well have incredible multimedia potential and come from another country, and be unusable by most of the people in the US. Eventually, the world will make use of their expanded bandwidth, and will leave us behind.
And its all because the telcos were addicted to their premium prices they've always charged for T1 lines....
Those are all natural monopolies because physical items need to travel along the lines from provider to customer, and cannot be mixed with other customer's items (with the possible exception of phone, which I'll get to later). When you order water from the water company, it has to physically travel from the reservoir controlled by the utility to your house, and the water company owns all the lines in between. The water you order can't be mixed with water your neighbor orders, if your neighbor orders from a different water company. Water, electricity, and natural gas don't have routing addresses.
The difference with internet is that only the last mile is a natural monopoly. Many different companies could plug their backbones into the last mile going to your house, and in fact many different companies could share the same backbone lines, and your traffic would not be "mixed" or confused with your neighbor's traffic like it would if many water companies were plugged into an analogous hub. The internet is a very unique utility in this way. In fact, the phone system works the same way, but only recently (since digital telephone transmission), and of course telephone providers still maintain their "natural monopoly" status along the whole length of the line, left over from the analog days.
So the solution in this case is, I think, to separate the last mile providers from the connection providers. Allow the last mile providers to be a natural monopoly, either run by a city/town/village or heavily regulated, just like the rest of the utilities (but separate from the data providers). However, allow free market competition from companies providing Internet service to that last mile hub. This would be even further aided if the last mile providers created a universal standard for providers to plug into, which only requires a software change in order to change providers, instead of a truck changing a physical plug. All data (internet, phone, cable) would come into your home with the same type of cable, whether it comes from a telephone company, a cable company, or some other newcomer. When customers can switch Internet providers easily (as they could when the last mile is owned by the city and software switchable) there will be a real market at work, and all the wonderful pro-consumer effects of supply and demand would suddenly kick in.
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