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The Real Obstacle to Rural Broadband Internet Access

Aug 17, 2007
The "Real" obstacle to deployment of high-speed internet access in rural areas is cost. I can say that because our company provides high-speed wireless internet access in seven small communities and their surrounding areas.

The services offered in each community are profitable, some more than others, but, still, profitable. In any given community from one quarter to one half of the revenues go to paying for the backend internet access from a Telco, either Verizon or AT&T.

In our area a single T1 running at 1.54 mbs costs about $700 per month. There are ads online for T1's for as low as $299 but you have to be in a large metro area. So why is ours so high priced. There is only one reason. Verizon is the only local phone company with no competition so they can charges as much as the market will bear.

There are numerous towns we could provide service in where we might wind up with maybe 10 customers. If I cannot link wirelessly from one of our existing facilities to one of these towns then we simply cannot provide service. So those people are out of luck.

In the past several Presidential election cycles one of the clarion calls has been to provide high speed internet access in rural communities. This pronouncement goes back at least 12 years. So what happened? Most campaign rhetoric is just that, a bunch of hot air. I recently attended the announcement of one of the current Democratic Presidential Candidates and sure enough one of his ideas was "the laying of broadband lines in rural communities". I do not think he even knows what he was talking about.

The lines are already there. Every community in this country has some type of phone system that is connected to the greater national grid. But Verizon has a strangle hold on using that installed infrastructure. Even though there are lots of small companies who might be willing to provide the services, it is unaffordable.

Verizon has started to provide DSL service in a few towns in this area. They picked the biggest towns first. Most small communities still have only dial-up if they are lucky enough to have a provider with a local number for them to use.

There are also costs for a Telco like Verizon to provide DSL services in a community. But the costs are one time equipment costs and not the ongoing expense of internet backhaul. For a company like Verizon to provide DSL service across their entire service area the expense would be considerable. So it is understandable why it is not happening.

There are probably lots of small companies like ours that would like to be able to provide high-speed internet access to smaller communities. If, years ago, the government had actually wanted broadband in rural areas, they could have simply told the Telcos to loosen up their hold on bandwidth and help those local companies step up to be the local internet provider. The equipment costs would be spread across numerous small companies and a lot more people in rural areas would have the benefit of broadband internet access.
About the Author
Michael Dappert is a co-founder of Winco, Inc., a provider of wireless internet access to small communities in West Central Illinois. Everyone is invited to discuss a wide range of issues at Flyoverfolks.com .
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