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January 19, 2009 10:41 AM

Misconceptions About Rural Broadband

One of the more frustrating things I've had to deal with in advocating for the Rural Fiber Fund are the many misconceptions about what it'll take to crack the rural broadband nut.

But by clarifying a few key points we will better understand the challenge and therefore be better able to craft a more effective legislative solution. Let's jump right in:

All rural areas are uneconomical to deploy broadband to without grants.
Not true: some fiber deployers actually prefer to build in rural areas as they're able to realize extremely high take-rates. And while there are remote areas that will need grants to get connected, all the deployers in the Rural Fiber Fund Working Group require to start bringing world-class broadband to rural America are partial loan guarantees.

Rural networks need continuing government subsidies like the USF to stay afloat.
Absolutely not. All of the projects that will be enabled by the Rural Fiber Fund will be self-sustaining, based on business models that offer great services at fair prices without government having to write a support check every month.

Rural America doesn't need/deserve world-class broadband.
While in theory most would disagree with this, actions speak louder than words. By setting lower speed requirements for rural areas than urban and suburban communities we're basically saying that we're OK with rural America getting left behind again. That bringing them up to today's broadband is good enough and that we don't care if or when they actually get the world-class connectivity that they need to compete in the global economy and that only fiber can deliver.

The market will eventually bring them world-class broadband.
The whole point of government intervention is that the market isn't working. So what that means is these communities will likely only get whatever broadband government incentivizes the deployment of. This means if we spur today's broadband that'll be all they have tomorrow, which is why we should focus at least some attention on equipping them with tomorrow's broadband so that they can be competitive well into the 21st century and not just the next few years.

Government has all the solutions and should make all the decisions.
By focusing solely on a top-down approach of federal grants prioritized by state governments we do nothing to empower local communities to make decisions or leverage market forces to guide investments. The Rural Fiber Fund provides a mechanism that's both community-centric and market-driven, a bottom-up approach that supports financially viable projects and rewards communities that are engaged, committed, and ready to move versus those that are politically well-connected.

Rural America can wait for world-class broadband.
These government grants won't even start to be distributed until the second half of '09. By that point billions worth of shovel-ready Rural Fiber Fund projects could have already been deploying for months. Deploying new networks takes time, so the sooner we can get people moving the better. And the rest of the world isn't waiting around for us to catch up. The longer it takes to stimulate deployment the further behind rural communities will fall.

$6 billion in grants is enough to make a difference in rural America.
Now $6 billion is nothing to sneeze at, and it's supposed to lead to $10 billion in rural investment, but that's not enough. In total it's going to take upwards of $50 billion to lay fiber to every last home in rural America. So enabling anything less than $20 billion in investment will have limited impact, at best incremental rather than transformative. And simply giving out grants will only benefit those lucky few projects that receive them, whereas the Rural Fiber Fund can be a tool that benefits all rural fiber projects.


So there we have it: we can get rural America sustainable world-class connectivity sooner rather than later so long as we don't let these misconceptions get in the way of establishing a community-centric, market-driven approach to spurring deployment.

We can change the course of history and secure the future of rural America through the establishment of the Rural Fiber Fund.

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Comments (1)

The statement that, "world-class connectivity that they need to compete in the global economy and that only fiber can deliver" is simply not true. There are alternate technologies available that allow for world class broadband that do not need fiber networks. LaJolla Networks has demonstrated a developing technology that offers; speed, reach, scale and an attractive ROI for the end user in rural areas.

Posted by Dan Burmeister on January 28, 2009 7:38 PM

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