Free Press Update on the Broadband Stimulus Package | Free Press

I'm good with a little regulation with my stimulus.

What regulations are you thinking about? There is much we need...

yeah, it's called restraint.
time america learned about it.

Restraint, like the 3 Trillion dollar Iraq war and the fully deregulated cronies of Bush running Wall Street, and the Billions missing in Iraq, and the Bush tax cuts that caused the deficits in the first place, ...those kind of restraints?

Its time we invested in the nation, and not just in the millionaires.

It's about time they invested in something progressive, and good for the country. Time to catch up with the rest of the world.

I spoke at a congressional hearing last year (about mental health insurance parity) and the speaker before me was from the Institute of Technology. He had a lot of valid points about the lost business opportunities rural areas were missing out on due to the lack of broadband infrastructure. With lower tax bases, rural areas can and will be, big targets for industry growth. I would have to say that is a real strong piece of stimulus......

As usual, the real world is a good deal more complicated than this gentleman's summary implies. Rural telecommunications has been my primary area of expertise for nearly my entire 20-year career. The gentleman talks about the high percentage of rural households that still do not have high-speed Internet access. However, in most of what we think of as "rural states" (think Wyoming, Nebraska, New Mexico, Idaho, etc.) the smaller communities usually had broadband infrastructure to them BEFORE the second-tier cities (those below the largest two or three). That is because the Bell companies were willing to invest in infrastructure in the largest cities and the telephone cooperatives and investor-owned small telephone companies that served the rural areas have been receiving hundreds of millions of dollars per year since the early 80s from a fund called the Universal Service Fund specifically to invest in telecom (first in digital voice -- replacing analog -- and then in broadband). The result has been a kind of "sandwich effect" in which there is a band of communities that tend to be a little too large for the small telcos to serve with broadband and a little too small to get investment priority from the Bells. However, at least from my perspective, that band has become narrower and narrower as the Bells have gradually worked their way down to the smaller communities, cable modem service has been deployed (ironically in residential areas first because businesses didn't usually sign up for cable television service in the old days -- damned bosses didn't make watching television a priority for their employees), and wireless broadband has become more user friendly since the old days when their plans to put a dish on a house resembled something like the plans for the invasion at Normandy -- time consuming and expensive.

I had not heard the expression "digital divide" in so long I nearly wet myself laughing when he used that phrase. I realize it is no joke when you live in a small community that has no broadband, but everyone tends to think that all other small towns are exactly like theirs, and that is just not the case. The greatest need in my opinion is with regard to the subject of my last bit of testimony to a Congressional committee: broadband on Indian Reservations. In fact, I was testifying to Senator McCain's subcommittee. He turned an interesting shade of purple about the third time I reminded the subcommittee that the state with by far the WORST record in this regard is Arizona (can you spell pathetic?). Too bad the Native Americans in that state can't rely on their federal delegation to take care of this fundamental social and economic tool. Net neutrality is another subject that is much more complex. Generally speaking, this is going the right direction, but people who just toss off that phrase have NO idea what they are talking about -- hell seasoned telecom professionals disagree on a precise definition of net neutrality and people are going to be badly burned if it isn't handled with a certain sensitivity to the benefits of competition (sensitivity not being government's strong suit...).

Aaaaand I neglected to address that rural percentage issue. The enormous problem we found in these rural states was NOT that they necessarily lacked infrastructure. It was that people simply did not/do not sign up for broadband service when it is made available to them. A 20% "take rate" (20% of the households that can purchase broadband with a phone call actually decide to do so) is not at all bad in these rural communities -- even where the prices are within 10 dollars per month of metropolitan area prices (costs a BIT more to deploy in rural areas, there are less customers over which to spread those costs, and of course there is less competition as a rule to drive the prices down). We found that most people just did not see a value proposition so long as their e-mails went through on dial-up access. This is changing, slowly, but I truly think it is a more organic thing than anything else. Just one example: when your town has ONE department store (either a mom and pop or a small chain store) and that store needs just about everybody in that community to shop there to even stay afloat, people tended NOT to shop over the Net. That loyalty is bleeding away in no small part because the crappy economy has EVERYBODY trying to figure out how to save a few bucks on their clothing bill, for example. But you can see that this development is not NECESSARILY a good thing in all respects. There are TON of these kinds of stores closing down, which means laying off the employees, who quite often have to look for work in the larger communities, reducing the demand for homes in the small towns, which drives house prices down and reduces tax revenues...you get the picture. Sorry about the length here, although I am sure most have long ago abandonned THIS post...

Responding to cztheday: I think this falls into a blame the messager category. The economy has and is further tanking. The cases you site with one dept store for a whole town - not my experience in much of the country. Inner cities have been abandoned their business, retail, and jobs for the Suburbs, and the crisis is as bad in the inner city as in rural SD.

This broadband initiative is part of a STIMULOUS bill, and it will do that. But the whole bill will not stop the meltdown. That is for further action. And it is only the government which can do it, in my opinion.

Hmmmm. I am not sure, exactly, how I am blaming the messenger. I am totally in favor of this aspect of the stimulus package. I am just saying that the gentleman is using imprecise and outdated terms as well as phrases he doesn't completely understand. If, however, the feds can get this money into the hands of those who DO know what is needed in the way of rural infrastructure (e.g., further defining what is meant by "underserved" so we can focus on things that will increase broadband USE. UNSERVED is easy to understand. UNDERserved is less so. Does it mean that there is only one provider? Does it mean that there are three but only one provides an acceptable data throughput rate? Does it mean that there may be FIVE providers but NONE of them offer the service at price that is affordable in South Dakota? Infrastructure is the cost-intensive part of providing the service -- so if Uncle Sam is picking up that portion of the tab, the service should be more affordable. BUT exactly how do we handle the companies that have already invested hundreds of millions of dollars in infrastructure across a state? Do we just say "too bad, we are building a parallel network and taking half of your customers...welcome to bankruptcy?" No, of course not. But actually making certain that does not happen is a lot trickier than one might think.

I am not sure I understand what you mean by "utilizing a lower tax base on rural areas to cut overall costs for initial investment." Are you saying that taxes are lower in rural areas, and that would result in lower costs for the big companies? I am also not sure what you mean by the assertion that companies are sending people all over the nation to survey rural exchanges. I mean, companies have been sending people to look at rural communities as a possible place to locate either a branch or even an entire business the whole time I have been alive. The most recent "wave" of such business developments have been "call centers" where the workers can make or take calls for all kinds of things: selling cell service, responding to warranty claims, responding to customer complaints for some product or service, etc. Larger cities tend not to get too excited about such businesses, but rural areas will take just about anything, even if the pay is abysmal and there are few if any benefits. One reason is that the husband is often a farmer or rancher, and a call center job allows the wife to bring in a little extra income while tailoring her schedule around the kids' school, etc.

And of course, I did not mean to say that all rural areas were so broadband ready that GM could just move in. I meant that the vast majority of people living in rural communities can get broadband service at their homes or businesses (and as I am sure you know, in a community with a population of 10,000, a business that employes even TEN people is a business of significant size) by just making a quick phone call to their telephone cooperative, Bellco, cable television provider, or satellite television provider. The costs are higher in rural areas for two reasons. 1) In a rural area, there may be 5 homes per mile of line, compared to 40-50 homes per mile in a city suburb -- if the cost of that mile were identical, the price to the suburbian customer would be miniscule compared to the rural customer because the company can spread those costs over so many more customers/bills. 2) Major cities generally lie on (or very close to) the Internet backbone network that crisscrosses the country and the continent. Rural commmunities have long fiber optic links just to get to that backbone. The last time I ran the costs for just one rural telephone cooperative about five years ago, one mile of fiber optic line plowed into the ground cost an average of $25,000 per mile. A 300-mile link is not at all unusual in the West. Eastern communities tend to be quite a bit more fortunate in that regard. But you can see the cost problem.

Sorry if I came off as a snob. It is just that if the guy in the video were talking about, say, the human heart, and the video clip happened to be viewed by a heart surgeon with 20 years of experience, one would expect that the surgeon would probably be in a pretty good position to be knowledgeable on the subject (doesn't necessarily mean he would be right about EVERYTHING, but he should be pretty close). Well, this is my area. I have written probably a dozen papers of 25 pages or longer each year about this very subject for 20 years, spoken at professional gatherings all over the US, have represented rural telcos in literally hundreds of legal and regulatory matters (and only lost two in that time period) and have been the CEO of four different telecom/data companies, all of which have been very successful. I know that sounds like bragging...it just is what it is...I am just trying to establish that while I may very well be full of crap, I SHOULD know what I am talking about. I have had knock down, drag out court fights with the likes of AT&T, MCI, Qwest, Sprint, Western Wireless, etc, etc. On the other hand, now that I think of it, I probably killed one hell of a lot of brain cells in those battles...nevermind...

I

Suburbian? Crap. Suburban. Bedtime.

This good . Means more people can find out what is really goin' on . If it isn't messed up somehow .