Britain, like the U.S., is trying to extend broadband to rural areas. A United Kingdom paper reports this morning that "people who live in the countryside could face paying more for the same Internet access as those in towns and cities, the Government has admitted." The Western Morning News reports. "Plans to ensure 'universal' broadband provision applies only to the speed and not the price – leaving the way open for commercial firms to target city-dwellers with better deals. Rural campaigners say the move amounts to a 'broadband tax' on people in the countryside." 

The British government has made a pledge similar to that made in the U.S. — that everyone would have access to broadband Internet. The UK Culture Secretary Ben Bradshaw announced in June that there was a "universal obligation" to provide every citizen with  two megabits per second broadband access by 2012. The British figure that 10 percent of the population doesn't have that level of access now. Yesterday, a government spokesman said it was "possible" that rural communities would have to pay more for access.

The Country Land and Business Association has warned that "rural not-spots," areas without broadband, could "suffocate" businesses and cut off people from services. "What we're campaigning for is that everybody should have inexpensive high-speed broadband in the countryside and the Government should put in place policies that make that possible," a CLA spokesman said. "We think everybody should pay the same. There shouldn't be a broadband tax on people in the countryside because they don't have access that people in the cities do."

Applications for some of the $7.2 billion set aside for rural broadband are due August 14. The question taken up in a Business Week report is what technologies will companies employ to extend broadband to sparsely populated areas — and at what cost? The Federal Communications Commission is agnostic on the technology, saying only that it needs to be "cost-effective to install, provide consistent performance at an affordable price, and be able to upgrade to higher speeds over time," according to Business Week.

The agencies reviewing the applications — the Agriculture Dept.'s Rural Utilities Service and the Commerce Dept.'s National Telecommunications Information Administration — are giving applicants higher scores for faster speeds, but they are also scoring higher for how quickly the systems can be put into place. In the past, the Rural Utilities Service has given 37% of its loans to those who run fiber optic cable directly homes; 23% has gone to wireless; 22% has gone to DSL; 17% has gone to cable; and 1% to the new technology of using electric lines. Those interviewed by Business Week predicted wireless would see an increasing percentage of the action in future grants and loans.

The Rural Cellular Association contends that exclusive deals made between handset makers (like Apple and its iPhone) and huge telecommunication companies violates federal anti-trust laws. If you want an iPhone, you have to join AT&T, for example. The federal Department of Justice appears to think the charge has merit and is in the early stages of an investigation aimed at determining if Big Telco is impeding competition. These ties between big telecom companies and handset makers hit rural providers the hardest. “Regional and rural carriers cannot gain access to the latest cutting-edge devices, which gives large carriers a key competitive advantage,’’ said Victor Meena, chief executive of Cellular South Inc. of Ridgeland, Miss.

Key U.S. Senators are said to be in favor of the investigation. Former Federal Communications Commission chair Michael Copps said in June that the agency should determine whether some of these arrangements adversely restrict consumer choice or harm the development of innovative devices, and it should take appropriate action if it finds them." 

The rural argument here is key, according to the Wall Street Journal. Rural telecom carriers "claim today's wireless markets are increasingly uncompetitive and underserving rural areas. Hu Meena of Cellular South, a Mississippi-based carrier with about 750,000 subscribers, told Congress that 'the industry is trending back towards consolidation and the days of Ma Bell.' Regional and rural carriers, he said, can't gain access to the latest gadgets because larger carriers have cut these exclusive deals." The Journal says that 96% of rural residents have a choice of at least three carriers.

President Obama has dispatched his cabinet secretaries on a "listening tour" of rural America, beginning July 1 in Wattsburg, Pennsylvania.