Rural providers keeping pace with DSL

The National Exchange Carrier Association today issued a progress report on rural telephone companies’ broadband deployment efforts and said that despite operating in low-density, higher-cost markets, they match the penetration rates of non-rural carriers.

In “Trends 2006: Making Progress with Broadband,” NECA said there are now more than 1000 rural service provider members of its “Traffic Sensitive (TS) Pool” offering broadband DSL service. As of June 2006, NECA had 1120 rural company members. Together, they support more than 630,000 ADSL and SDSL access lines.

Wherever possible, particularly in Greenfield opportunities where new infrastructure is required, companies are choosing to deploy fiber, since they have concluded that the cost of installation is about the same as copper plant and ongoing maintenance is cheaper for fiber.

Perhaps different from their Tier 1 ILEC brethren, rural companies are expanding their ATM-based service to the home, as 29% of TS pool members offer ATM services to end customers—up from 16% in 2003.

Although rural providers cover nearly 40% of the landmass in the U.S., they deliver only 4% of the access lines. The study says that only in 2003 did the rural providers’ access lines dip into the loss column. They maintained a 1% growth rate until then. Between 2003 and 2006, this market’s access lines declined by 3.3%, compared to the line loss rate between 4% and 7% for large telephone companies, according to the report.

Rural providers average about 5911 access lines each with 45% of them serving 2000 or less. Twenty-four percent (269 companies) serve less than 1000. Yet more than half of these companies serve areas greater than 200 square miles.

Of the states with NECA TS pool members, Illinois ranks the second lowest in companies equipped for DSL at 81%. Only Arizona is lower at 75%. Twenty-two states are 100% equipped, including Connecticut, Kansas, Kentucky and West Virginia.

On the wireless side of the business, rural telcos are increasingly deploying Wi-Fi and WiMAX technologies. Sixty-four percent of members are offering wireless data services. Fourteen percent also provide Internet service provider services outside their traditional markets.

Despite penetration rates on par with larger, more urban providers and providing alterative access technologies such as wireless and ATM, broadband is not yet universal for the rural markets and in many cases, despite high-bandwidth access, the speeds offered are not always enough to support the multimedia packages customers are looking for.

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