Nobody really knows now how widespread broadband is currently in rural America, but comScore, a market research firm, reports that broadband penetration in rural markets is growing at a faster rate than in the cities. The company says that over the last two years, broadband penetration in rural places has increased 16 percent, but only 11 percent in metro areas. comScore says that the rural broadband penetration rate is 75 percent, well below the national rate of 89 percent. In comScore's study, a rural market had a population of less than 10,000 and metropolitan areas had populations greater than 50,000. The in-between areas grew at a rate of 14 percent over the last two years.
"Across the country we have witnessed growth in broadband adoption driven by greater price competition and increased consumer demand, as bandwidth-intense activities like video streaming and peer-to-peer sharing continue to grow," said Brian Jurutka, comScore vice president of telecommunications, in a statement "With low-speed DSL priced at about the same level as dial-up in many areas, there is little incentive for households to remain on dial-up."
The Pew Internet Project shows a much lower rate of broadband adoption, which is what really matters.
Do rural Americans use telecommunications in special ways? A recent
study suggests that Yonderites are twittering and IMing and chatting
with friends closer to home.
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."
One fear was that the major carriers would slurp up the majority of the $7.2 billion in money set aside in the federal stimulus package to extend broadband connections to unserved regions, largely in rural areas. Now the Washington Post's Cecilia Kang reports that as an initial deadline for applications approaches on August 20, the broadband giants — AT&T, Verizon an Comcast — are unlikely to seek any of the money.
"Their reasons are varied," Kang writes. "All three say they are flush with cash, enough to upgrade and expand their broadband networks on their own. Some say taking money could draw unwanted scrutiny of business practices and compensation, as seen with automakers and banks that have taken government bailouts. And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule that they say would prevent them from managing traffic on their networks in the way they want."
That and there was the requirement that this money be spent in rural America. "It's not cost-effective for the big network operators to play in rural [markets] in the first place, and if they take federal money that comes with all these strings attached to it, they are opening themselves up to being regulated even further," said Roger Entner, head of communications research for Nielsen IAG. There simply isn't enough demand in rural areas for the big boys to want to dive into rural markets, another analyst told Kang.
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.
Jonathan Adelstein (above) is President Obama's nominee to head the U.S. Department of Agriculture's Rural Utilities Service, which means that Jonathan Adelstein will be in charge of the $2.5 billion pot of money intended to help pay for high-speed Internet in rural areas. Earlier this week, Adelstein appeared before the Senate Agriculture Committee. "I believe one of our key national priorities should be to aggressively promote the expansion of broadband deployment and adoption," he told the committee in testimony. "Some have argued that the reason we’ve fallen so far in the international rankings is that we are more rural than those ahead of us. If that is correct," he said, "we must cite it not as a despairing excuse but as a clarion call to re-double our efforts to promote rural broadband."
Adelstein is a former commissioner at the Federal Communications Commission. Before that he was a legislative aide to Sen. Tom Daschle of South Dakota.
Adelstein's nomination appears to be chugging along smoothly. The American Cable Association praised him, while, at the same time, trying to set the stage for how the USDA broadband money will be distributed. "ACA hopes that the RUS will award these important grants based on the merits. If that standard is followed, ACA is confident that many small and mid-sized cable operators will seek and receive their fair share of broadband stimulus funding," said ACA President Matthew Polka.
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.
Faster Internet service holds out many promises for rural areas: a boost to education and health care, a conduit from small-town businesses to a global marketplace. In South Korea, Internet access supplied via satellite is keeping men and their foreign-born wives on the farm.
Choe Sang-Hun, with the New York Times, reports on how Lee Si-kap of Yeongju, South Korea, is maintaining rural families. Lee collects and dispenses small satellites with which wives from China, Vietnam and the Philippines can keep in contact with their families back home via the Internet.
Outmigration is a major problem in rural South Korea (as it is in the U.S.); young Korean women, especially, are leaving the countryside for work and marriage in cities. Choe writes that 4 out of 10 women who married in rural communities of South Korea last year were foreign born.
“’Thanks to Mr. Lee, I now miss my country, my mother and father less than I used to,’ said Bui Thi Huang, a 22-year-old bride from Haiphong, Vietnam, who now lives here in Yeongju, about 100 miles southeast of Seoul.”