I just finished reading Service Unavailable, a new book by Frederick L. Pilot. It’s a quick and easy read for anybody in the broadband industry and covers the rural broadband crisis we have in the US.
The first two-thirds of the book are a great history of how we got to where we are today. Pilot explains the decisions made by the FCC and by the large ISPs in the country that have brought us to today’s broadband network. In far too many places that network consists of old copper wires built to deliver voice; these have deteriorated with age and are wholly inadequate to deliver any meaningful broadband. The large ISPs have poured all of their money into urban networks and Pilot describes how the networks in the rest of the country have been allowed to slowly rot away from lack of maintenance.
It’s a shame that his book went to press right before the FCC took an action that would have been an exclamation point in Pilot’s story of broadband policies gone amuck. The FCC just gave away billions of dollars to the largest telcos to upgrade rural DSL to 10 Mbps download speeds – a speed that is already inadequate today and that will be a total joke by the time the last of the upgrades are done over a six year period. The FCC seems not to have grasped the exponential growth in consumer broadband demand that has doubled about every three years since the early 90s.
Pilot goes on to recommend a national broadband program that would direct many billions of dollars to build fiber everywhere, much in the same way that the federal government built the interstate highways. He says this is the only way that places outside of the urban areas will ever get adequate broadband.
I certainly share Pilot’s frustration and have had the same thought many times. We could probably build fiber everywhere for the price of building one or two aircraft carriers, and one has to wonder where our national priorities are. As Pilot points out, broadband everywhere would unleash a huge untapped source of creativity and income producing ability in the parts of the country that don’t have good broadband today. And as he points out, many of the places that barely squeak by with what is considered broadband today are going to find themselves on the wrong side of the digital divide within a few years.
But then I stop and consider how federal projects are run and I’m not so sure this is the right answer. I look back at how the stimulus grant programs were run. These grants shoveled large sums of money out the door to build a whole lot of fiber networks that barely brought broadband to anybody. And they did it very inefficiently by forcing fiber projects to pay urban wage rates for projects built in rural counties where the prevailing wages were much lower. And these projects required things like environmental and historical structure studies, things that I had never seen done before by any fiber project.
And then there is the question of who would run these networks? I sure wouldn’t want the feds as my ISP and I wonder how they would decide who would be the recipient of these huge expenditures of federal monies? Pilot proposes that such networks be operated as open access networks, a model that has not yet seen any success in the US. It’s a model that works great in Europe, where all of the largest ISPs jump onto any available network in order to get customers. But in this country the incumbents have largely agreed not to compete against each other in any meaningful way.
But beyond the operational issues, which surely could be figured out if we really wanted to do this, one has to ask if this idea can ever get traction with our current government? We have such a huge backlog of infrastructure projects for maintaining roads, bridges, and waterways that one has to wonder how broadband networks would get the needed priority. I have never understood the reluctance of Congress to tackle infrastructure because such expenditures mostly translate to wages, which means full employment, lots of taxes paid, and a humming economy. But we’ve just gone through over a decade of gridlock, and I have a hard time seeing anything but more of the same as we seem to grow more divided and partisan every year.
Still, Pilot is asking exactly the right questions. Unfortunately, I am not sure there can ever be that one big fix-it-all solution that will solve the broadband crisis. I completely agree with Pilot that there should be such a solution and I also agree that this is badly needed. We are quickly headed towards a day of urban America with gigabit speeds and the rest of the country with 10 Mbps DSL, a wider broadband gap than we have ever had. And all we have is an FCC that is shoveling money out the door for band-aid fixes to DSL networks on old copper.
So I’m not sure that the solution suggested by Pilot can be practically implemented in today’s political world, but it is one possible solution in a world where very few others are proposing a way to fix the problem. I would think that the industry could figure out a workable solution if there was any real inclination to do so. But instead, I fear we are left with a world of large corporations running our broadband infrastructure who are more interested in quarterly earnings than they are about reinvesting in the future. If I could, I would wish for a more utopian society where we could put Pilot and other thinkers into a room together until they worked out a solution to our looming broadband crisis.
I share your skepticism.
We’ve been here before. Rural electrification. Federal government loans money to coops – whether new or existing for capital costs to build financially sustainable networks that do not require ongoing subsidies to operate. No need for a new program even. Just political will and for coops to get better at raising their flag.
There are some notable differences with rural electrification. Telecom infrastructure disparities are not just a rural issue. They exist even in metro areas/suburbs/exhurbs and are far more granular than electric power infrastructure deficits in the early part of the 20th century. There was a much clearer urban/rural divide.
Federally supported consumer telecom cooperatives are great in concept. But in areas of the U.S. where there is no history of utility coops, they face very steep hurdles gaining community support. Also, federal funding for new telecom coops isn’t there to any meaningful degree, particular technical assistance funding they need to conduct the necessary business planning and network engineering.
I would also further expand on the idea of coops. There are maybe a dozen states where coops are common and in a lot of the country the idea of utility coops is a foreign one. When electrification was done it was done through all sorts of different business structures. There were certainly a lot of coops and municipalities who undertook electrification, but there was also tons of small for-profit companies, just as happened with telephone service. But over the years almost every one of those small electric companies got bought out by a larger electric company and so you rarely hear of a small electric company that is not a coop or municipal system.
It’s going to take a mixture of every kind of company to get fiber to rural areas. There is no one-size fit-all solution because in parts of the country where people never heard of coops they are going to be leery of joining one. I remember one such attempt on the eastern shore of Maryland that went nowhere simply due to the fact that the people living there could not seem to grasp the idea of the customers owning the business. If you haven’t grown up with a coop in your life it’s hard to believe that they can tackle these kinds of major infrastructure solutions.
The rural electrification analogy misses a critical point. Every home in any city of size has at least 1, sometimes 2 connections going to it today that can provide some level of internet connectivity/”broadband”. In the case of rural electrification, there were no existing “electric companies” with lines going into homes providing electric service to those locations. That was an effort to provide the ANY electricity to those homes, not be the 2nd or 3rd provider of electricity to those homes.
This boils down to basic economics. If a new provider cannot earn a reasonable return on their investment, they WILL NOT invest. Unless we want government funded/subsidized broadband as an option, then the basic tenants of marketplace and economics 101 cannot be ignored.