Sunday, February 11, 2018

Rural broadband - its expansion and the various approaches and challenges

Broadband internet is a necessity for participation in the modern economy. Much of our business is conducted online, schools are increasingly offering online courses and entire degree programs, and the social networking opportunities available are unparalleled. There are entire portions of the country that are however cut off from being able to participate in the broadband world. The federal government has largely tried to address this issue by offering grants to private entities. However, is this the best approach? Would the federal government be better served to model the expansion of broadband on their own expansion of electricity in the 1930s? 

There seems to be little disagreement that broadband is an essential part of any modern economy and that it is essential for any community to have access to it in order to grow. However, there has been remarkably little progress on the national level to address this issue.  In 2011, the "Connect America Fund" was created to expand broadband by giving subsidies to private companies to expand into rural communities. Despite these efforts however, a 2016 Congressional Research report found that 55% of rural Americans have access to internet with download speeds of at least 25 Mbps and only 32% have access to download speeds of 100 Mbps. 

The federal government currently defines "broadband" as internet with download speeds that exceed 25 Mbps, though there is a pending FCC proposal to reclassify access to cell phone data through a smartphone as having "access" to broadband. Since the Connect America Fund allocates funding based on need, this reclassification could result in areas that need to be served going unserved and the inflation of the number of people who have access to broadband. There are also questions about the accuracy of current FCC reports on broadband access and its affect on the ability of high need areas to be adequately served. Rob Hinton, chairman of the West Virginia Broadband Enhancement Council, recently alleged that a recent FCC report greatly inflated the number of West Virginians who have access to broadband, an allegation that the FCC even admitted was possible due to its reporting mechanism. 

The states could try to take action to address the issue. In New York, Governor Andrew Cuomo's office announced a couple of weeks ago that it was entering into the final phase of a three phase program that was designed to ensure that all New Yorkers have access to broadband internet by the end of 2018. This program, titled "New NY Broadband," operates similarly to other programs with the same intention, it expands broadband to rural areas by providing grants to private companies in order to make that possible. The program has seen a reasonable amount of success. According to the governor's office, when the program started in 2015, thirty percent of New Yorkers lacked access to broadband internet. Today, only two percent lack access. However, New York is a high wealth state with a bustling economic center that provides massive amounts of tax revenue that allows it to pursue such ventures. A state like West Virginia or even North Carolina would struggle to afford such a venture. 

I have always been a proponent of treating rural broadband expansion similarly to how the expansion of electricity was treated in the 1930s. In 1936, the Rural Electrification Act was signed and it created a mechanism for providing low-interest loans to locally owned coops to expand the electrical grid into rural communities. Many of these coops even still exist. That approach, which eschewed the idea of giving subsidies to private actors, empowered local communities and provided money to local people who were then able to invest it in their community and start a locally owned utility. 

There have been pockets of rural America that have tried to take this approach in regards to broadband. In 2010, Wilson, North Carolina was able to create a city-owned broadband network, the first gigabit network in the state. A year after its deployment however, the state legislature passed a law that banned municipalities from expanding their broadband networks outside of its borders. In 2015, the FCC voted to block these laws, which had also been passed in other states. After the vote, Wilson expanded access to their network to a nearby small town. However, a court ruling invalidated the FCC vote resulting in 200 people losing access to Wilson's network, including a family farm that employed 250 people. 

New York's approach has yielded results so far. However, we have to look at New York as an anomaly. Most states do not have the wealth that New York has and cannot afford to fund a three phase multimillion dollar expansion project. There are also questions of sustainability. Will private actors maintain service in rural spaces? Is there a way to stop Verizon or FairPoint or Comcast from simply leaving if the venture proves unprofitable (even with the subsidies)? In an ideal world, we would empower cities like Wilson to create and develop broadband networks for their local communities.

The expansion of broadband is a necessity and a sustainable approach is needed to ensure that the service remains in place over the long term.

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