Speed the Plow -- and Broadband, Too

Rural America wants fast Internet connections, but the cost of hooking up new subscribers is prohibitive. Satellites and Congress may hurry things along

Sally Cope works at an Internet service provider (ISP) in La Junta, Colo. Her region, filled with ranches and fields of watermelon and cantaloupe, isn't exactly a high-tech Mecca. Still, at the Eastern Colorado branch of Internet Commerce & Communications Co., which offers broadband access to 12,000 people, Cope gets calls every day from customers who want speedier service.

"Everybody wants something faster," she says. The company has customers from Illinois to Utah to Washington, and 70% want connections zippier than what their 28.8 or 56.6 kbps dial-up modems offer. Says Cope: "When you can't have something, everybody wants it."

Last year, 38.9% of rural dwellers used the Internet, compared to 41.5% of the nation as a whole, according to the Federal Communications Commission. Yet despite almost equal demand for Net access, broadband availability continues to lag across rural America. Telecoms and cable companies refuse to upgrade rural systems because of the higher per-customer costs inherent in serving lightly populated areas. According to tech consultancy Forrester Research, only 1.7% of all rural residents have broadband connections, vs. 4% in urban areas.


  "The reason that adoption is different is because of availability, not demand," says Jed Kolko, an analyst at Forrester. According to the Center for the Study of Rural America in Kansas City, Mo., less than 1% of towns with populations lower than 1,000 have cable connections capable of broadband. None of these towns offer digital subscriber line (DSL), another form of broadband access.

Given that demand for high-speed broadband access is rising everywhere and telecoms and cable companies are mounting sustained pushes to increase high-speed Web availability, it's doubtful rural Americans will continue to fall behind on broadband. For one thing, overlooking rural America would mean missing almost one-quarter of the U.S. population -- a market of more than 65 million people. Nascent satellite broadband companies could give speedier access where wires remain too costly. Legislation winding through Congress would provide tax incentives and grants to businesses that build out broadband access. And plummeting prices of broadband gear will likely lend a hand to network builders.

Long distances between homes could actually be the biggest obstacle in rural areas. According to Kinetic Strategies Inc., 69% of North American residential broadband access is via cable. But cable-TV providers are usually unwilling to extend broadband into areas with less than 10 homes per square mile, according to Insight Research.

Still, Internet access is as much in demand in rural regions -- in some cases even more so -- than it is in many urban and suburban areas. For example, farmers rely on the Net for up-to-the minute weather reports and checking commodity prices. Broadband is especially important because it would enable better health care through rural telemedicine services, as well as more comprehensive higher education through distance-learning programs.


  The Net also allows people living in remote areas to develop marketable cyberskills, thus opening up employment options. That's where the RITE-Link project comes in, a high-tech distance-learning program at Dakota State University in South Dakota. It teaches participants tech skills such as HTML and Java script, which they can use to work remotely from home or any other place with an Internet connection. With a high-speed connection, RITE-Link could run streaming videos of lectures, provide online counseling via video, and make class interactive, says Jeremy Pauli, who works for RITE-Link.

RITE-Link participant Tari London, a 35-year-old mother of two who lives in Colume, S.D., hopes learning via the Internet will give her the skills to move up from her current job at an in-town medical clinic. "We're in the rural area, so there aren't a lot of opportunities for women unless you're a nurse or clerk," she says.

The governments of both the U.S. and Canada have embraced programs such as RITE-Link. In the U.S., the E-RATE program, passed as part of the 1996 Telecommunications Act, has provided funds to wire rural hospitals, libraries, and schools for broadband. In Alberta, Canada, the regional government has spent $193 million on a program dubbed "Supernet" that aims to extend a high-speed network to every school, hospital, library, and government office in the province. Programs such as Supernet -- aided by investment from cable companies --helps explain how 28% of the Internet users in Canada already have broadband access, according to Forrester. Even though most Canadians live in the nation's high-density cities, the country has done much more to connect its vast rural areas than the U.S., analysts say.


  In the U.S., satellite communications may offer the best prospects for closing the rural-metro gap. Unlike cable, which requires massive building out, satellite covers a huge area once it's operational and can offer Internet access anywhere in the country. And the cost is the same in rural and metropolitan areas. To receive broadband signals from the satellite Starband service, all one needs is a clear view of the Southern sky. Already, some satellite companies, such as Pegasus, are also offering high-speed Internet services to rural areas.

The down side is satellite Internet connections are usually slower and pricier than landline broadband. The satellite systems can cost up to $500 -- plus up to $200 for installation and $70 in monthly access fees. That's far higher than city cable rates, which start at around $40 per month and often come with free installation.

But cheaper and faster satellite alternatives may be on the way. Denver-based WildBlue Communications plans to launch a satellite into a new, unused communications frequency early next year. WildBlue claims that it will be able to offer a 24-hour connection (most satellite services offer broadband connections at only certain times of the day), with faster uploading speeds than existing satellite services. "We can go dollar-for-dollar with cable and DSL," boasts WildBlue President Erwin Hudson.


  Still, some rural residents worry that market forces and innovation won't be enough to attract broadband upgrades to their regions. They're looking to the government for help. Several bills are pending in Congress. But the most likely to pass is the Broadband Internet Access Act, sponsored by Senator Jay Rockefeller (D-W.Va.) and Representative Phil English (D-Pa.). The bill offers investment tax credits for companies that build out broadband for undeserved areas. The bill has been sent from committee to the full House for consideration. And although it hasn't reached the Senate yet, the bill already has been co-sponsored by more than half the Senators.

The bill's passage could give rural broadband a big boost, and might even be the precursor for a universal broadband access mandate, similar to those enacted for electricity and telephone access early in the 20th Century. The question: "Whether broadband is a basic human right," says Forrester's Kolko. Given the opportunities that will be shut off from small communities if don't have high-speed Internet service, rural Americans will probably push for nothing less.

By Diwata Fonte in Washington

Edited by Thane Peterson

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