$11 billion needed for rural broadband upgrade
- By IDG News Service, Margret Johnston
- Jun 23, 2000
The National Exchange Carrier Association on Wednesday released a survey
showing that it would cost nearly $11 billion to upgrade U.S. rural telephone
lines to broadband Digital Subscriber Line (DSL) capability.
The results of the survey of NECA member companies were released at
a news conference at which officials also said a search had begun for funding
to help companies that serve rural areas pay for the upgrade.
The 244 companies that participated in the survey serve sparsely populated
regions of the United States from the bayous of Louisiana to the mountains
of Alaska, said Victor Glass, director of demand forecasting and rate development
at NECA. Typically, there are about five households per square mile in those
coverage areas — compared with the typical 50 households per square mile
in urban coverage areas.
The U.S. Federal Communications Commission defines broadband as the
ability to support a data rate of at least 200 kilobits/sec, both upstream
and downstream. NECA officials said alternative technologies exist for delivering
broadband to remote areas; however, the study only produced estimates related
The $11 billion upgrade price tag would cover 3.3 million lines, which
is equivalent to an average cost of about $3,300 per line. However, Glass
said that estimate is deceptive because the more remotely situated a customer
is, the higher the price to upgrade the line. For example, in a town, the
upgrade cost per line is about $500, but upgrading a telephone line that
runs to a farm, mine or other rural enterprise can run well into the thousands
of dollars, he explained.
He also said that the estimate covers only upgrades to equipment from
a customer's home to the local exchange carrier's switch. It will actually
cost an additional undetermined amount for DSL equipment, switches between
a carrier and an Internet service provider, and backbone services — none
of which were factored into the survey.
The survey also concluded that a portion of the required upgrades are
already being planned by the respondents. About 65 percent of the lines
owned by those polled will be capable of providing broadband service by