Mapping Broadband in Western North Carolina

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The Rural Broadband Crisis:
How Bad Is It? How Do We Solve It?

An Earthquake in Rural America

On Nov. 7, 2012, AT&T rocked the telecom world by unveiling plans to spend $14 billion to convert 99 percent of its 22-state network to Internet protocols (IP) by 2016. On the same day, it notified the FCC of plans to retire its copper wireline network.

AT&T asked the FCC to eliminate the 99-year-old “universal service” rules underlying the Public Switched Telephone Network (PSTN). Those rules guarantee every American household access to wired telephone service. With FCC approval, AT&T could pull the plug on wired networks it deems unprofitable, leaving many rural residents with only cell phone service.

Though AT&T plans to spend $6 billion upgrading its wired network, that investment will focus on more populated urban and suburban areas. Ominously, industry analysts predict that “FCC approval could usher in a wholesale dumping of traditional wireline networks around the country” by other carriers.

The Nov. 7 bombshell is consistent with AT&T and Verizon's rejection of Connect America Fund subsidies. Why accept money earmarked for rural broadband buildout when your goal is to abandon your wired networks in rural areas?

A Wake-Up Call for Congress and the FCC?

AT&T plans to accelerate its “U-verse” fiber-to-the-node (FTTN) effort to extend fiber lines to select neighborhood-nodes, using existing copper lines for “last-mile” delivery of broadband, cable TV, and IP-enabled phone service (“voice-over-IP”, or VoIP). AT&T is betting that this expansion will seduce politicians and regulators into approving the abandonment of its rural wireline networks.

The strategy is similar to Verizon's 2004 announcement of a $23 billion investment in FiOS, its fiber-to-the-home (FTTH) technology. In return for its investment, regulators awarded Verizon billions of dollars in rate increases and tax breaks.

But in 2010, Verizon prematurely announced the end of its FiOS expansion. In New Jersey, for example, Verizon promised to extend FiOS to 100 percent of its customers by 2010. Instead, Verizon claims to have “passed” 1.9 million homes, or 59 percent of its customers (being “passed” doesn't mean that fiber broadband is actually available).

In New York, Verizon was granted a $1.95 a month rate hike on residential lines as an incentive for its FiOS expansion. “Of course,” says one telecom analyst, “the states weren't told that everyone would be charged extra for a service only some were going to get.”

As of second-quarter 2012, Verizon's FiOS and AT&T's U-verse reached 8.6 million households, about 7 percent of the 120 million households served by the telecom giants. Like AT&T, Verizon is now claiming that its wireless service will reach customers where it failed to extend FiOS.


Additional Reading

Rural broadband access still lags cities,” Daily Yonder, June 9, 2013.

"How ‘white spaces’ could change the world," Tech Central, May 19, 2013.

"Utilities want piece of FCC's $4.5 billion rural broadband push." Greentech Media, May 29, 2013.

California gets first commercial 'white space' high-speed Internet,” C-Net, April 22, 20 13.

Obama's new FCC pick could determine the future of the Internet,” by David Corn, Mother Jones, March 26, 2013.

Broadband 101: Guide to the Basics of Broadband Terminology,” Institute for Local Self-Reliance, March 2013.

FCC to probe rural phone problems,” The Hill, Feb. 7, 2013.

Moving from broadband scarcity to broadband abundance,” Christopher Mitchell, Seattle Times, March 11, 2013.

Expand wireless Wi-Fi access to public airwaves,” Sacramento Bee editorial, Feb. 16, 2013.

The Broadband Factor: How connectivity expands economic and community development” by Kristin Peterson, Huffington Post, February 4, 2013.

The broadband-deprived study at McDonald's” by Anton Troianovski, Wall Street Journal, Jan. 30, 2013.

NC at the bottom of the broadband barrel” by Christopher Mitchell and Todd O'Boyle, Raleigh News & Observer, Jan. 28, 2013.

How to get high-speed Internet to all Americans” by Susan Crawford, New York Times, Jan. 24, 2013.

Co-ops make rural broadband possible,” Electric Co-op Today, Dec. 17, 2012.

Book talk by by Susan Crawford, author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” at Harvard University's Berkman Center for Internet & Society, Dec. 12, 2012.

Break Up the Telecom Cartels,” New York Times op-ed by David Cay Johnston, Nov. 27, 2012.

Many rural AT&T customers still lack high-speed Internet access despite merger promise,” by Gerry Smith, Huffington Post, Nov. 12, 2012.

Like paying for a car that's sittin' on blocks,” radio story on rural broadband in Appalachia from community radio WMMT, Whitesburg, KY, Nov. 8, 2012.

Broadband for Rural America: Economic Impacts & Economic Opportunities
Hudson Institute policy study by Hanns Kuttner, October 2012.

Rural broadband in serious trouble,” DSL Reports, Oct. 16, 2012.

C-SPAN panel on “Rural Telecommunications” featuring Hanns Kuttner, Oct. 15, 2012.

FCC Report: Thousands in WNC lack broadband access,” MAIN, Sept. 12, 2012.

White space broadband as a white knight for rural America,” GigaOM, July 15, 2012.

Rural broadband via nonprofit networks,” by Wally Bowen, Raleigh News & Observer, Feb. 6, 2012.

Score! for two rural broadband teams,” by Craig Settles, The Daily Yonder, Jan. 26, 2012.

National Broadband Plan

Broadband access