Putting IT into Community

With some new initiatives and cooperation, rural areas are leveling the high-tech playing field.

by / April 16, 2002
If you want to get as far away from Boston as possible and still be in Massachusetts, your best bet is to head for Williamstown. Located in the northwest corner of the state, near the Vermont border, Williamstown is the home of Williams College and a small but well-renowned art museum, a village center and rolling countryside for miles around. Williamstown has managed to maintain its charm because of its remote location, far from major highways and suburban sprawl.

But remoteness has its drawbacks, especially in the age of high-speed telecommunication networks. That's what some Williams College graduates found out when they started an Internet business called Tripod several years ago. A T1 line from Verizon cost $2,200 a month, more than four times the rate in larger jurisdictions. That's a pretty steep price for a start-up firm to pay, but those same high costs were also hurting established businesses, such as Berkshire Health Systems, which manages nursing homes and hospitals in the area. And the high costs were keeping some businesses, such as law firms and small hotels, out of the broadband picture altogether.

Businesses in Berkshire County decided to fight back rather than pay. They started an initiative, called Berkshire Connect, which pooled local demand so they could attract other telecommunications carriers to step in and offer more affordable services. Today, the use of high-speed data connections in the county has taken off, thanks to lower costs and better services. It's a remarkable story of how rural communities can enjoy the economic benefits of today's high-tech world without the hassles of today's suburban and urban areas. But success in the Berkshires took years of hard work.

"Rural areas in America will always present a challenge to telecom firms," said Don Dubendorf, a lawyer in Williamstown and a founding member of Berkshire Connect. "We are not low-hanging fruit."

Rural Realities

America's rural communities have always struggled when it came to building better roads, schools or hospitals. It's no different with telecommunications. They tend to be the last served by broadband and have to pay some of the highest prices. Those negatives can hurt economically. The small businesses that dominate the rural economy have to pay a disproportionate price for their information infrastructure.

High-tech firms, which often pay good wages, are less likely than low- and medium-tech-oriented firms to locate in rural areas, according to a study by the Small Business Administration. The report, "High-Tech Rural Renaissance?" cited several factors for the lack of high-tech jobs in rural areas, including the lack of infrastructure.

The nation's governors have grown concerned about the challenges facing rural communities as the rest of the nation's economy churns forward. Last June, the National Governors' Association called for more federal-state coordination in keeping America's rural communities productive and competitive, citing the high economic and social costs when a large segment of the labor force is left behind.

Last January, a group of senators led by Jay Rockefeller, D-W.V., introduced legislation designed to bring affordable high-speed Internet services to rural and low-income areas around the country. The bill featured a 10-percent tax credit per year for five years to companies that will bring existing broadband telecommunications technologies to both residents and businesses in rural or underserved urban areas.

In November, President George W. Bush signed into law a bill containing low-interest loans designed to spur rural broadband deployment. The bill provides about $80 million in direct loans for building out high-speed Internet access in rural areas.

Whether that proves to be the spark for building out telecommunications infrastructure in rural America remains to be seen. For now, initiatives to bring broadband to America's rural communities have been largely at the behest of state governments. For example, North Carolina has created the Rural Internet Access Authority, which has the ambitious goal of providing local dial-up Internet access from every telephone exchange in North Carolina within one year and to provide high-speed access at competitive prices for residents and businesses within three years.

Boosting the Berkshires

In Massachusetts, the story of Berkshire Connect starts with the frustrations of businessmen like Dubendorf who were confounded by the high prices and poor services of their telecom carrier. But the change in their fortunes may never have taken place if it weren't for the Massachusetts Technology Collaborative (MTC), a quasi-state government organization established to boost the state's knowledge-based economy.

MTC conducts knowledge-based research and also supports collaborations among businesses, the academic world and government. "We're a resource facilitator, providing businesses with best practices; we show them the options that reduce barriers and improve growth," explained Patrick Larkin, MTC's senior vice president. MTC also provides small amounts of funding to help get projects off the ground.

Back in 1997, businesses in the Berkshires, both traditional and new, were struggling with the fact that high telecommunications costs were putting them at a huge disadvantage economically. The nearest point of presence for the region was in Springfield, Mass., more than 60 miles away. That meant businesses were paying three or four times more than companies in Springfield and Boston for telecommunications services.

Knowing something should be done, but not sure what to do about it, a small group of businessmen turned to MTC for help. Working with the Berkshire Regional Planning Commission, MTC helped set up a task force, which tried to gauge demand for broadband. However, problems arose over technology issues, so a new steering committee composed of technical experts from the area took over and gave the group new direction.

The committee quickly coalesced around the need for new infrastructure, rather than pushing for a solution through legal and regulatory changes that would force Verizon to lower its access fees. "We decided to create an alternative to Verizon," said Dubendorf. "Verizon had a legacy of phone-centric, not data-centric service. They didn't believe the investment was worth it. But we did if we could find the right private partner."

With Berkshire Connect beginning to take form in terms of members, the group realized they had to fully understand the structure of returns on investment in the telecommunications universe in order to find out what it would take to attract a new provider to the area. They studied the available technologies and what worked best in their geography, and they learned what it would take to aggregate demand to attract a new provider.

One thing they found out was Verizon had been distorting the level of demand in the area, making it appear to be less than it actually was, according to Dubendorf. That made them realize the telecommunications market in the Berkshires was larger than originally thought. Second, they realized the importance of sticking together if they were to succeed in attracting a telecom provider. This led Berkshire Connect to decide that all members would get the same pricing, whether they were General Electric, which has a plant in Pittsfield, or a two-person dot-com firm.

Finally, Berkshire Connect decided to pursue a partner that would deliver telecommunications services that weren't part of the existing Verizon network. While some providers were offering services besides Verizon, it was done over Verizon's network. Without new infrastructure, the businesses and institutions in Berkshire County could not benefit from true competition.

Equal Opportunity

Seven providers responded to Berkshire Connect's RFP, which was awarded to Global Crossing, in partnership with local firm Equal Access Networks, to build and manage a new infrastructure for the Berkshires and members of the Berkshire Connect initiative. Two years ago, Equal Access came in to the region and began providing voice and data services via a combination of fiber-optic lines and wireless connections via rooftop antennas.

The arrangement is somewhat unconventional, according to Daniel J. Kelley, president of Equal Access Networks. "The project was a leap of faith. I'm relying on [Berkshire Connect] to continue giving us their business as a group and to make a best effort in bringing new business to my firm. While the project is based on the classic model of supply and demand, the foundation in this case is trust."

So far, that trust has paid off in spades for the members of Berkshire Connect. To date, benefits include:

  • Facilities investment in excess of $3 million.

  • Savings on voice and data services for members, ranging from 40 percent to 80 percent.

  • Over 50 businesses use Berkshire Connect for long distance, T1, Internet, data, frame relay and private line services.

  • Over 70 T1 lines to members.

  • As for MTC, its role was information broker and overall facilitator for the members of Berkshire Connect who were having to think regionally, something that doesn't come naturally to the independent-minded attitude that prevails in the Berkshires. "We played technology guru, filling in the gaps and helping them think through the various technology options they faced," explained MTC's Larkin.

    Given Berkshire Connect's high degree of success, MTC is working with a number of other rural regions in Massachusetts and New Hampshire to help fashion similar arrangements. Both Larkin and Kelley admit that what worked in the Berkshires won't necessarily work elsewhere. Already two other projects (not with MTC) have failed because the affinity group splintered when the local telecommunications carrier got wind of the project and dropped prices to save market share.

    But with hard work, rural communities can succeed in attracting high quality telecommunications service to their area. "Rural areas are hard to serve," admitted Dubendorf. "But by working on the demand side we thought we could improve the market for providing telecommunications services."

    And they did.
    Tod Newcombe Features Editor