Connecting Country Roads

The environment may finally be right for rapid broadband deployment in rural areas.

by / July 29, 2003
The struggle to bridge the digital divide has been under way since the Internet's establishment as a legitimate communication medium. Though various pieces of legislation have been passed and numerous programs adopted to attempt to solve the problems of the digital divide, little has changed.

Of particular concern is the gap between broadband deployment in metropolitan and rural areas. A recent Federal Communications Commission (FCC) study confirms this disparity. Rural citizens may equal their urban counterparts in conventional dial-up connectivity, but rural areas lag in broadband penetration. According to the National Telecommunications and Information Administration, more than 56 percent of all cities with populations over 100,000 have broadband available, but less than 5 percent of cities with populations less than 10,000 have such service.

"Rural America already faces huge economic challenges and is being left behind because they simply can't compete without affordable high-speed access to the Internet. That is where the jobs are, and that is where businesses invest," said Damian Kunko, CEO of the Rural Broadband Coalition, an advocacy group promoting greater broadband development in underserved rural areas.

But rural communities' access to broadband may be changing.

Creating Incentives
In late May, the Senate passed an economic growth package with an amendment -- the Broadband Expensing Amendment -- that allows communications service providers a tax deduction for installing broadband in rural and underserved areas. Some supporters say this amendment -- authored by Sens. Conrad Burns, R-Mont., and John Rockefeller, D-W.Va. -- has the best chance to make a difference.

The primary reason behind slow rural broadband deployment has been economic. Until recently, carriers were forced under federal law to lease their lines to competitors at discounted rates. However, the FCC recently overturned that mandate. Carriers also traditionally see rural areas as a poor risk of attracting enough profit to make their efforts worthwhile. The combination of the overturned FCC ruling and the tax credits may drive more rapid broadband deployment.

"The current market is looking for any incentives to make the risky investment to deploy and to have certainty through tax credits or tax breaks," said Grant Seiffert, vice president of global policy for the Telecommunications Industry Association (TIA). "Incentives help make the decision to deploy much easier for carriers."

Seiffert said the TIA has supported many initiatives throughout the years, but transforming initiatives to reality is another story.

"We've been working on a broadband tax credit bill for three years," he said. "It's taken us that long just to get a vote in the Senate, and we still don't have one in the House. It takes time."

But the shaky economy may help push the Broadband Expensing Amendment, since many think it may help the economy through improved efficiency and productivity.

"A lot of it is educating members of Congress and the administration about the industry and the impact new technologies will have on the economy," Seiffert said.

Alternative Approaches
Some organizations aren't waiting for federal legislation, opting instead to push their own efforts to bridge the broadband divide. In May, the U.S. Department of Agriculture awarded $20 million in broadband community grants to 40 communities in 16 states and a U.S. territory. Most of the grants have matching requirements and were awarded to companies working on broadband or telecommunications projects in a particular community. The USDA also announced a $1.4 billion loan program to encourage high-speed startups to deploy broadband in rural locations .

Meanwhile, a unique, grassroots partnership between mPhase Technologies, the Georgia Tech Research Institute and Hart Communications has provided residents and businesses in rural Hart County, Ga., access to bundled telephone, Internet and digital television services over DSL. The mPhase technology uses a rate adaptive digital subscriber line (RADSL) -- a variation of
asymmetric digital subscriber line -- which takes advantage of the fact that bandwidth and distance are inversely related. According to the TIA, the RADSL-based solution adjusts dynamically to varying lengths and signal qualities.

Unique solutions have also popped up in foreign countries. In May, Samsung Electronics announced the launch of its largest social program outside Korea, called Samsung DigitAll Hope. The program will donate $600,000 to organizations supporting technology use to bridge the digital divide. The program is being simultaneously launched in eight countries: India, Australia, Thailand, Vietnam, Indonesia, Philippines, Malaysia and Singapore.

Meanwhile, British Telecom and regional development agencies recently launched a pilot broadband deployment project called actnow (Access for Cornwall through Telecommunications to New Opportunities Worldwide). Already demand has proven high enough to likely extend the program to seven more UK areas, including Edinburgh, Glasgow and West Sussex. The project could bring an extra 45,000 residents and small businesses within broadband's reach.

No matter how broadband gets to rural areas, Seiffert said the key is simply that it gets there.

"There is quite a bit of build-out to be done for Americans in rural environments, and they should not be left behind," he said. "Broadband is not in rural areas, because there are market barriers, regulatory barriers and economic barriers. Whether those are overcome through legislation or regulatory agencies or grants or whatever, we support that activity."
Justine Brown Contributing Writer