FCC rural broadband report notes middle mile, consumer demand concerns

A report on rural broadband issued by the Federal Communications Commission’s (FCC) Acting Chairman Michael J. Copps this week offers an idea of the direction the new FCC is likely to take on broadband matters and the areas the commission will emphasize—if one reads beyond the initial summary and recommendations.

The Report on a Rural Broadband Strategy is essentially a status report that fulfills a mandate included in the 2008 Farm Bill. Its upfront recommendations are largely of the “flag and apple pie” variety, such as the need for better coordination between federal agencies, the states and community organizations and the need for better information about broadband availability. But in subsequent pages, Copps offers substantial details on topics such as “middle mile” connectivity and broadband demand, while stopping short of making specific recommendations on those topics.

Several pages are devoted to issues involved with the “middle mile” that connects the last mile Internet service provider with an Internet backbone service provider. “In many cases, the rural broadband provider will need to obtain backhaul transport from more than one provider, often over facilities that were designed for voice telephone or cable television services,” the report states. “Some of these ‘middle mile’ facilities may have insufficient capacity, causing the transmission speed on otherwise adequate last-mile broadband facilities to come to a crawl or stall before the data reach the Internet backbone. Overcoming this may require the construction of a dedicated facility, which drives up costs and can deter last-mile broadband investments. Moreover, even when the last-mile provider acquires access to adequate middle-mile facilities, that access may be prohibitively expensive.”

The report goes on to offer several possible solutions, such as “encouraging middle-mile buildout, revising universal service funding to help cover costs of the middle-mile and using current or potential infrastructure more effectively by coordinating with other infrastructure projects to shrink deployment costs, and reforming interconnection obligations.”

More specific recommendations may be forthcoming in a complete rural broadband plan due from the FCC by February 17 of next year. That plan could include recommendations to stimulate broadband demand, the May 22 report suggests.

“Promoting broadband deployment will require steps to increase broadband demand as well as supply,” Copps wrote. “Addressing broadband demand effectively likely will require specific survey data on the interest or lack of interest in broadband service among non-subscribers, and the reasons for that interest or lack of interest. Such data ideally would be available for various demographics such as age, location and income; for businesses; and for certain classes of institutional users, such as schools, libraries, public safety agencies and hospitals.” The report also envisions a potentially greater role for rural libraries in offering public broadband access and educating consumers about broadband.

But at least one association representing rural telephone companies was disappointed that the discussion of broadband demand made no reference to video. Video services are a way to hook subscribers in to broadband service, said Stuart Polikoff, director of government relations for the Organization for the Promotion and Advancement of Small Telecommunications Companies. “Once they’re hooked in, they can appreciate all that broadband has to offer,” Polikoff said.

Polikoff was pleased, however, that the report recognized middle mile issues. ‘We continue to recommend explicit high-cost support for middle mile transport, which now is not covered by universal service,” said Polikoff.

He said he was also happy to see the report state that wireline infrastructure is more scaleable than wireless. “Wireless is more complementary to wireline than a substitute for it,” Polikoff said.

The appearance of only the acting chairman’s name on the report is somewhat unusual.

Polikoff speculated that Copps may have taken that approach in order to meet the deadline and to make clear that he was not speaking for all commissioners.

“One thing I went right to is the universal service section,” Polikoff said. “We agree that broadband should become a supported service and that all broadband providers should contribute equitably, but I’m not sure all the commissioners are in agreement with that viewpoint.”

James Troup, a partner at Venable, a law firm that represents small telcos, said it would be difficult to predict the commission’s direction until all five seats are filled, but industry forces will have a strong impact. While wireless carriers and smaller telcos are in support of universal service funding for broadband, the major wireline carriers oppose it. “The lobbying strength of someone like AT&T will get the attention of at least one or two commissioners,” he said.