Three different takes on rural broadband deployment

I talk to a lot of people about rural broadband deployment challenges. Several people had some interesting insight recently that I thought I would pass on to readers.

Rural Broadband Alliance report author weighs in on ROR

The Rural Broadband Alliance, a small telco group created a couple of months ago with the specific goal of pushing for changes in the National Broadband Plan, has released a paper to support its agenda. I recently talked with report author and Alaska Pacific University economics professor Dale Lehman about the report, in which he argues, among other things, that the FCC should not eliminate rate of return regulation.

The National Broadband Plan authors proposed eliminating the ROR system because they say it offers no incentive for small telcos to reduce their costs. But Lehman offered an interesting rebuttal.

“One cost-reducing incentive the small telcos have is that the managing director may be sitting at the lunch table in a small town next to the largest customers or owners,” he said.

I asked Stephen G. Kraskin, an organizer and advisor for the Rural Broadband Alliance, why the 40 rural carriers that formed the alliance felt the need to create their own organization rather than working through existing associations such as NTCA or OPASTCO. He said the group’s goal was to augment and reinforce the efforts of those associations.

Wilderotter suggests broadband Universal Service deployment threshold

Considering that most small telcos already have deployed broadband, perhaps the biggest question for those telcos moving forward is what level of Universal Service support they should expect if policymakers move ahead in implementing the reforms proposed in the National Broadband Plan.

The FCC has recommended using reverse auctions to award Universal Service funds for deployments to unserved areas, so logically the commission might try to use that option for awarding ongoing support as well. That means small telcos could be at risk of losing support altogether if another carrier should underbid them.

Frontier Communications CEO Maggie Wilderotter had an interesting take on this when I spoke to her recently. Noting that typically it’s the last 8% of a service area that’s tough or unprofitable to serve, she argued that only carriers that have deployed broadband to 88% or 90% of a territory should be eligible to receive funding.

Don’t know if that’s an idea being widely promoted in small telco circles, but it seems like it could have some merit.

Are satellites a viable alternative in highest-cost areas?

The FCC has been promoting 4G wireless service as an alternative to landline offerings such as DSL or FTTP for delivering broadband to unserved areas. The commission also has noted that for the highest-cost areas, satellite-based service may be the most economical option.

When I asked Chuck McCown, CEO pro tempore of Beehive Telephone Company, a small telco serving remote areas of Utah and Nevada if he was worried that policymakers might shift funding away from companies like Beehive and toward satellite service, he was not overly concerned. He said satellites are not a suitable replacement for landline service because they have greater latency.

But I got a different take on the topic from Allison Lenehan, chief strategy officer for Barrett Xplore, which is deploying a network to serve rural areas of Canada based on the same technology choices the FCC seems to advocate for the U.S. Barrett Xplore’s network will be based largely on 4G wireless but will use satellite service in the most remote areas. When I asked Lenehan about the latency issue, he argued that rural users are accustomed to more latency than urban users because the networks underlying their communications services often rely on microwave backhaul and repeaters.

McCown argues, however, that some applications—such as on-line games—will not be able to tolerate the level of latency that satellite service provides. “If a kid plays World of Warcraft, in the second or two it takes to find out if he hit a guy, he’s dead,” said McCown.

Art Brothers update

Some readers may have missed hearing regularly from Beehive Telephone’s Art Brothers, who offered commentary for many years for the now defunct America’s Network Magazine. I’m happy to report that Art, who is now CEO emeritus at Beehive, is doing fine and continues to explore new telecom technology. His latest venture is manufacturing microwave antennas to boost signal strength for broadband wireless deployments.