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Broadband Providers Nix Sticks

Testimony before a House subcommittee last week reiterated what we already knew: fewer people in the United States have broadband Internet access than in several other countries, and rural areas of the United States have even less access to broadband than urban areas. They're called "the sticks" for a reason: rural America gets this one stuck to it, too, as it does on a lot of other social, economic, and technical issues.

The testimony to the Agriculture Subcommittee of the House Committee on Appropriations came from Julie A. Hedlund, who's a Senior Analyst with the Information Technology and Innovation Foundation (ITIF). You can read her statement, "The Importance of National Policies to Connect Rural America to Broadband," here.

Her point is that we need a national policy to encourage the delivery of broadband access in rural areas. She's got lots of reasons: because it would make easier for businesses to grow, because it would improve the quality of life in rural communities and make them more attractive places to live and work. Her statement is full of quotes like, "a 2005 study of businesses with broadband access in Appalachia found that for each firm located in a broadband accessible zip code productivity increases between 14 and 17 percent over a similar firm located outside a region with broadband access."

Reading her testimony reminded me of why broadband penetration is so low in rural areas: Anecdotal evidence suggests the problem is broadband service providers who are in the business of preventing broadband access.

Hedlund's report reminded me of the story of Scottsburg, a small county seat in southern Indiana. A few ago the town decided it had to get broadband service or it would start losing businesses and population to other, better-served cities. The telecom companies that could have done the job by providing DSL or broadband cable service, however, had other ideas. They said no, broadband in Scott County wouldn't be profitable, too few customers too far apart, so they wouldn't build out their systems.

The town of Scottsburg responded by doing the job itself: In 2003 it built a wireless broadband network, Citizens Communication Corp., that now serves a nine-county area.

And what was the response of Big Telecom? Did the industry admit the error of its ways and change its exclusionary practices? Of course not. What it did was try to lobby a bill through the Indiana legislature to prevent other local governments from operating broadband networks. Not just once, but twice. Fortunately, the legislature voted it down both times.

I first heard Scottsburg's story on Public Broadcasting's "Now" public-affairs program (you can read the show transcript here), and then read broader coverage in Salon (see Free American Broadband") from 2005.

Federal Computer Week earlier this month published an update here. After Scottsburg deployed broadband service, the FCW.com article says, Verizon and Comcast also began offering it, despite their earlier protestations that the market wouldn’t support it.

Scottsburg's system is staying competitive with Big Telecom. Says director Jim Binkley, "When cable and DSL came in, we had a drop-off, but I’m seeing [customers] come back. I haven’t seen anything that looks like demand is leveling off."

Of course, Scottsburg is playing really dirty, doing all kinds of consumer-friendly things the Big Telecom boys are surely crying foul over. It doesn't require a service contract, for instance, and and it doesn’t charge customers to rent its equipment. City residents get a single bill for water, electric, sewer and broadband service.

When you hear stories like this, you just have to shake your head. It looks like with friends like Verizon and Comcast and the rest of Big Telecom, the American economy doesn't enemies, does it?

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