The Cost Of Broadband In Every Rural Home

dave562 writes "In an analysis of the effectiveness of the the 2009 stimulus program (American Recovery and Reinvestment Act of 2009 or ARRA), one of the programs that was investigated was the project to bring broadband access to rural America. Some real interesting numbers popped out. Quoting the article: 'Eisenach and Caves looked at three areas that received stimulus funds, in the form of loans and direct grants, to expand broadband access in Southwestern Montana, Northwestern Kansas, and Northeastern Minnesota. The median household income in these areas is between $40,100 and $50,900. The median home prices are between $94,400 and $189,000.' So how much did it cost per unserved household to get them broadband access? A whopping $349,234, or many multiples of household income, and significantly more than the cost of a home itself.'"

Comments

Warning, not exactly objective research here

[elrous0]

Keep in mind that this study was conducted by Jeffrey Eisenach (former head of Newt Gingrich's political action committee and longtime conservative activist) and Kevin Caves of Navigant Economics (a bunch of professional "experts" who spend most of their time testifying in favor of various pro-big oil, pro-energy concerns). The article that cites it is by Nick Schulz, of the conservative think-tank American Enterprise Institute.

And it also includes some data that I'm highly skeptical of, to say the least--like asserting that all but 1.5% of users in Montana had wired broadband access and all but 7 households in the whole state had access to 3G broadband prior to this funding. Those numbers are better than my own state, and we're not nearly as rural or mountainous as Montana.

Re:Warning, not exactly objective research here

[MickyTheIdiot]

Question from a lazy person: does anyone have any idea what was said about the TVA back in the day. Getting rural broadband to me seems to have a lot in common with rural electrification... including all the people saying that it isn't a necessity, people who crying about "market forces" and all that.

I know everyone seems to have their biases, but it seems like every study that has come out over the last 2 years is two biased to consider no matter what "side" it supports.

Re:Warning, not exactly objective research here

[Vario]

This is clearly a study that is not worth much without the raw data open and accessible for everyone.

Maybe a single household near a mountaintop would cost several million dollar to connect but quite a few others could be done for a thousand. So before someone can make any political conclusions it is definitely worth to look at the actual data behind this.

Of course it does not increase trust, that the website (Social science research network) is currently down.

Re:Warning, not exactly objective research here

[iceaxe]

I think the problem is there in your last sentence: "every study that has come out"

Where "come out" means reported on by various popular media, with varying degrees of selectivity and 'spin'.

There's actually quite a lot of good research going on in the world. You just don't have it thrust in front of you unless it can be twisted or abused to support someone's political or financial agenda.

Re:Warning, not exactly objective research here

[hjf]

In a modern capitalist world, the role of the state is making sure that minorities (not in the racial sense, but in the economical sense) have access to the same tools and benefits the "majority" has. The problem with corporate thinking is that it tends to concentrate its resouces in developments that will offer an assured AND short-term return of investment. While this is an efficient policy for corporate, it leaves outside the game to basically everyone not living in a big city. Mid-sized are second, and small cities and towns are often ignored - but can easily be served by a small individual with enough capital.

But rural areas are vast extensions of nothing. Long range WiFi access has been a blessing to many of these communietes - all over the world. These are often working with "lower" grade equipment. Sometimes MikroTik or many other economical wifi solutions (NanoStation), others run on off the shelf hardware. Very few run in true long-range outdoors solutions like WiMAX or Motorola Canopy, because the initial cost is too high for individuals to afford. And this is where "stimulus" funds should go.

The growth (explosive growth) of the internet was ONLY due to the ease of access available through simple phone lines. It was an already-installed network, across the nation. HIGHLY REGULATED, which resulted in a service that was available in even the most remote locations. Broadband was never regulated that way, and as a result of that, there is a huge breach between people with access to broadband, and people still on dialup.

Some argue if there should be stimulus funds at all. Leaving aside that most big companies receive money from the govenrment one way or another (tax breaks to money from their military/aerospace branches, to subsidies), there shouldn't be a discussion IF people in remote locations want or need broadband. They might not want it now, but they surely need it - or will, eventually.

This is an online world. For most people in cities, Internet is a part of their lives, just like electricity and phone service. Do we want people from rural areas coming to the Big City for a better life, because we couldn't provide them with a good life where they lived? Do we want mom and pop farms to disappear because their kids and grandkids got fed up with the country lifestyle? Do we want all farms to be property of Monsanto? Because that's where we're heading.

Disclaimer: I'm not american but here in Argentina we have the same problems. Big cities have good internet and phone service, while smaller cities often have 1 ISP, and small towns either don't have anything or have a single 1mbit connection (that cost $500 a month, really) shared between 100 people over wifi. Local farms either have been bought by corporations, or their owners have been pushed to plant only soybean (which isn't consumed in the country, but exported to China) instead of wheat (which, because of our italian roots, is heavily consumed: bread - which the chinese don't seem to eat), which is missing in supermarkets. Bread price has gone up considerably, and there are days when you just can't get flour.

Pay no attentiont to anti-government conservatives. They all want what's good for companies - not for people. You have the right to bear arms, the civil rights, why can't you have "the right to broadband access" too? Oh yes, because it's the government spending money. We better spend it in warfare, right? Cause the US doesn't really have a big enough budget for "security" and military.

Re:Warning, not exactly objective research here

[coolgeek]

I don't care if the numbers are real or not. It costs between $1,000,000-$9,000,000 per lane mile of highway out to those rural homes. If we're talking 2-4 homes/mile, the road costs many more times than the cost of the homes too. And $350K to give them broadband is pretty cheap by comparison. Broadband deployment should be viewed as a similar infrastructure to homes, power lines, etc.

Re:Warning, not exactly objective research here

[Grishnakh]

Shhhhhhhhh! This is part of the Republican 2012 election plan - the old story of painting Democrats as wasteful of tax dollars

The problem is, they're exactly right: Democrats ARE wasteful of tax dollars. Just look at all these stupid stimulus programs that amount to handing giant piles of cash to giant corporations, thinking they're going to do something useful with it, and then being "surprised" when instead they just take the cash and keep it.

But the other problem is that the Republicans are ALSO wasteful of tax dollars. Did Federal spending go down during Bush's term? No way. The Republicans want to get us involved in as many wars as possible, so that their buddies in the defense industry can make more profit. Strangely enough, Obama is also a big fan of giant defense spending.

What's the solution? Well, I think it should be fairly obvious the answer isn't electing more Democrats or more Republicans, but apparently this concept is beyond the ability of the voting public to grasp.

Re:Warning, not exactly objective research here

[es330td]

You have the right to bear arms, the civil rights, why can't you have "the right to broadband access" too?

You misunderstand the definition of "right." In the US Constitution it means a person has the choice to do something free from government interference. You *may* own a gun, if you so desire. You may say, or write, whatever you wish without restriction. You may associate with whomever you choose. Nowhere in there does it say that the method to exercise that right will be provided, only that it is allowed without interference. I am free to publish a newspaper but I have to pay for it. A "right" to something that requires delivery of a service or product places everybody but the receiver in a position of slavery. If a person has a "right" to medical care, some doctor or medical profession MUST provide that service. If a person has a "right" to broadband, some company must string wire, another must provision access to their networking hardware and yet another must provide electricity to run it all.

Re:Warning, not exactly objective research here

[QuantumRiff]

Keep in mind, ISDN (and partial ISDN) is available almost everywhere.. and according to the Feds, 128Kb/s is broadband..

Re:Warning, not exactly objective research here

[mrsam]

I'm using a perfectly valid term to describe a group of people stupid enough to support Sarah Palin.

It's no worse than "Democraps", "Rethuglicans", etc.

There was a show on the Discovery Channel, I think it's off the air now, because my Tivo hadn't found it in a while, "Dirty Jobs". The host, Mike Rowe, went around the country, talking to folks whose jobs are the menial, thankless tasks that actually make civilized life possible for the rest of us. Like garbage collectors and people who work in sewer treatment plans. People who build highways, or maintain the nation's bridges and tunnels.

I can't help but to notice a somewhat curious thought experiment here. What happens if we try a word association game, here. What would be the first thing that comes to one's mind, at the mention of the word "Tea Party". I'd bet that if you were to ask this to the average, salt-of-the-earth people that I've seen profiled on "Dirty Jobs", the typical answer we'll hear are things like "Boston Harbor", "The Liberty Bell", "George Washington crossing the Potomac", "taxation without representation", and many other historical images that relate and recall our nation's violent birth.

But if the same thing were to be asked of you, or many other left-wing extremists, the first thing that comes to their mind is their face being slapped by a hairy scrotum.

Just some food for thought.

As someone who is looking at rural homes..

[Anonymous Coward]

I live in Canada, but we also have this same sort of pledge to bring high speed internet (not broadband specifically) to rural areas. I've been looking at rural homes, and to be honest, it's a real pain.

As someone who torrents heavily, games a lot, and generally uses about 300gb/month at least in traffic, I need a fast connection. There is literally nothing in most parts of rural Ontario that exceed 3mbps down / 1mbps up, and with unlimited (or at least, overage charges that won't make you go broke) caps. If you go the 3G/4G route (which I would love to), many areas don't actually have coverage even if they claim they do, and the caps are 5gb if you're lucky. If you go satellite.. well, it sucks. Latency is awful. And if you go Xplornet or something (wireless antenna), they all block torrents, are known to be highly unreliable, have low caps, and the speed is 3/1 at best.

It's kind of sad, because I don't want to live in the city, yet there's no real options out there either.

Re:I think we're overthinking this

[dbc]

Hang on city boy, that's not true at all. My brother has been paying high fees for a satellite feed out on the farm so that he can get weather and market reports and trade commodity futures in a timely fashion. An internet connect is as important to progressive farmers as it is to any other business these days. The sad thing is that his satellite feed out in an area with less that one family per square mile is a better connection than my DSL connection here in the middle of Silicon Valley in an area of $1M+ homes.

the circle of pork

[CrAlt]

1) Comcast/ATT/Cablevision/COX/etc all get their lobbyists push for this in the bill.
2) The Gub-ment pays these mega corps billions to build out in the mountains.
3) The people in these areas now have "access" to broadband... for only $79/month.
4) They don't sign up... Comcast/ATT/cablevision/etc don't care. They already made $300K per house passed in the build out already.
5) PROFIT!

What was the trillion dollar stimulus spent on?

[xzvf]

While the source of this data is obviously biased, I wonder where the stimulus money was actually spent. Think what a trillion dollars actually is. A new aircraft carrier costs ~10 billion dollars, planes double that cost, meaning that the country could have purchased 50 with the stimulus (we currently have 11). In todays dollars the Apollo program cost 150 billion meaning that we could duplicate it six times with a trillion dollars. A highway bridge near where I live is being replaced for a cost of 300 million, thus a trillion dollars could have replaced that bridge 3000 times. It could have paid the 14 million unemployed, $35000 a year for two years. Where did it go, and what did it do?

Re:What was the trillion dollar stimulus spent on?

[jedidiah]

The auto manufacturers and airlines and banks that were bailed out NEEDED TO DIE.

They were diseased things that really should not have been allowed to live any longer under anything resembling a true free market economy.

Actually rebuilding some of our crumbling infastructure would have been a great idea. Too bad not much of that actually happened.

Broadband is infrastructure, so stop complaining

[Quantum_Infinity]

Broadband should be considered as an infrastructure and not as a luxury. Good infrastructure leads to economic development. The cost of providing infrastructure might be high initially but in the long run it has tremendous benefits for the economy of the area where that infrastructure was provided. Providing broadband in rural areas will attact outside businesses, help local businesses grow, make easier to provide education. The benefit will far outweigh the cost in the long run. Oh and what about steaming HD pr0n? Don't people in rural areas have needs?

It's infrastructure

[Applekid]

So, how did the roads get built? How is the mail delivered? How is power transmitted? How about Plain Old Telephone Service? There used to be some bonafide investment in infrastructure in the US, so where did all that go?

Granted, I understand that water and sewer isn't too common in rural areas, but it's not like it's a backpacking adventure through the rainforest we're talking about.

Re:I think we're overthinking this

[Duradin]

How do you think they got those phone lines out there? It wasn't the invisible hand.

There were probably people saying "Can't those things be done through the mail?" when they got wired up for phone service.

Re:Unnecessarily expensive

[blair1q]

Yeah, because Europe is entirely government-free.

Re:Fake numbers

[dnahelicase]

First of all they're dirt poor and not going to pay for broadband or own a computer. The critical part is the ratio of income to house price. Somewhere around 1:2 is OK but not ideal, 1:4 means extreme poverty, like 99% of your legally declared income must be going toward the house and you never eat anything but ramen, at least until the inevitable foreclosure and bankruptcy. Even commissioned cheerleaders for the home sales/building industry don't have the guts to ask for more than a ratio of 1:3.

Umm. That's wrong. 1:2 is great, 1:4 is still good. It is certainly not extreme poverty. I don't know if you realize this, but those in extreme poverty generally don't own homes at all.

A good explanation of ratios based on interest rate

I own a home and my income:home price ratio is 1:3.2 I comfortably pay for expanded cable and a 20/3 fiber-to-the-home internet connection, and I live in a rural community. Most of the community has access to 3 broadband choices -including fiber from an independent/non-big-telco - which are not payed for through subsidy or tax credits.

I'm not sure where you are from, but $40-50k / year is certainly a livable, comfortable, not-anywhere-near poverty condition for most of the country.

Re:Think harder...

[Zan Lynx]

Personally, I think the subsidies for farmers should stop.

Of course, the city folks won't like it much when the prices of food triple to reflect real costs, but that's life and a fair market economy.

I suspect plenty of "blue" city congressmen and senators support farm subsidies for this very reason, because the current system takes the money from the rich folks and makes basic food stuff more affordable for the poor folks.

Um...

[rsilvergun]

you do know what subsidies are for, right? They're to ensure a steady and affordable food supply and prevent starvation. Unless you're really, really rich, you want this.

Then live in the city???

[brunes69]

Seriously. People think they can have it all these days.

Why should you get to live in the country, pay super low taxes, and have someone else in the city pay super high taxes to subsidize YOUR high speed?

Move to the country and pay for your own broadband hookup. Or live with satellite access. Or stay in the city. But don't ask for my tax dollars to pick up the bill for your personal choice to live in an inefficient location.

Re:Think even harder...

[hairyfeet]

If that were true why was there parts of downtown Nashville with No cable or DSL when I was there a few years back? is the middle of music row in a cornfield?

No friend it is called 'cherry picking" and something the teleco duopoly has done for years. When my mom built her home more than 20 years ago the cable stopped exactly 2 blocks from her house. Now more than 30 households live on this small 2 mile stretch and how far is that cable now? Exactly 2 block from my mother's door, same as it was more than 20 years ago. They haven't moved a single inch in ANY direction in more than a decade here, despite ever more houses being built, because that would mean they would have to invest rather than put the money into their pockets and in the USA it is "damn everything but the quarterly report!" and has been for ages.

No we are gonna have to open up the last mile to competition and we are gonna build it ourselves if the companies won't, just as they refused to run electrical lines and water to most of the rural areas. And how much of that "cost" is private contractors and no bid contracts? If one would let the cities and the states build instead of having them buried in teleco lawsuits which is ironic since they are suing for customers they refuse to serve even if they win, well then I bet you'd see that price plummet.

The problem is the current system like the "stimulus" bullshit was done classic government style, which means it doesn't get done if Sen Porkus and Congressman Kickbackus don't get to throw some to their cronies who promptly raise their bids by 600% and act like they won the lotto. We should do it ourselves and demand that the 200 billion we gave the telecos back in 96 for nationwide broadband (who said "Gee thanks! and then gave us the finger, just like GE who took a bailout and used it to send another factory to India) be paid WITH interest in 90 days or we seize the last mile.

The ONLY way we are ever gonna catch up with the rest of the world is to stop tying the hands of the local and state governments and bust up the teleco monopoly on lines. They want a monopoly? Fine we'll give you 20 years for every currently underserved or unserved neighborhood you give FTTH. Make it 15 for every large city you change out, 20-25 for every small town. Otherwise all we are gonna get is ever nastier caps while the CxOs get extra hookers to snort blow off of while we get the short bus to the information superhighway.

Re:Think harder...

[brit74]

Heh. Let's not forget that Republicans are also firmly behind farm subsidies. Heck, farm country is where a lot of Republicans get votes.

Republicans dodge farm subsidy cuts
June 15, 2011

Republicans have quietly maneuvered to prevent a House spending bill from chipping away at federal farm subsidies, instead forging ahead with much larger cuts to domestic and international food aid.

The GOP move will probably prevent up to $167 million in cuts in direct payments to farmers, including some of the nation’s wealthiest. The maneuver, along with the Senate’s refusal Tuesday to end a $5 billion annual tax subsidy for ethanol-gasoline blends, illustrates just how difficult it will be for Congress to come up with even a fraction of the trillions in budget savings over the next decade that Republicans have promised.
...
Direct payments to farmers have been a frequent target of fiscal conservatives and other critics of farm programs because they are paid regardless of crop price or yield. They have survived for years, along with tens of billions annually in other subsidies for farmers, because a powerful coalition of farm state lawmakers in both parties has protected them.

http://articles.boston.com/2011-06-15/news/29661688_1_farm-subsidy-cuts-farm-programs-direct-payments

Re:Think even harder...

[hairyfeet]

Oh you want to hear a story that'll piss you off? In early 00 I had a decent amount of money from a settlement (rich asshole playing with his cell instead of watching where he was going, took the entire side out my car and laid me up for a couple of months) so I decided "fuck this I'm gonna help my mom and these folks out". So I went down the road and got EVERY house to sign they would be happy to have service, in fact most wanted the full boat, all the channels and every package they had.

So I march down there to the cableco with this petition and the knowledge of how much it would cost to run the line, as I talked to a linemen that actually went out and measured and the cost was $12,000 to run the entire length at the time. so I tell them "Here is the list of people that want it, i'll pay for the line, just hook it up" and you know what I got? They wanted $30,000 just to consider it and contracts for FIVE YEARS with a 25% markup. They said unless I could "guarantee the profit potential of the area" then they couldn't do it!

So I say it is time We, The People, whose land their wires cross, take back what is ours. it is time to seize the last mile and open it up to REAL competition! sadly if we don't those like you and my mom will NEVER EVER get service, just the finger while they raise rates on those of us that have it and give the CxOs more bonuses for hookers and blow.