States bypass rural Internet obstacles
- By Dibya Sarkar
- Dec 18, 2002
National Association of Regulatory Utility Commissioners
Although the number of Internet users in rural areas has been increasing
steadily, barriers still hinder broadband deployment — namely high cost,
low demand, a lack of awareness and infrastructure, and low return on investment.
Several state governments have taken different approaches to overcoming
such roadblocks, including offering tax incentives, low-interest loans and
grants, as well as allowing local public-sector entities to enter the broadband
Earlier this year, Virginia lawmakers passed a law that permits local
governments to offer telecommunications services to residents and businesses
in rural areas where there are no competitive local exchange carriers, said
Virginia House Delegate Joe May during a session at the National Conference
of State Legislatures' fall forum in Washington, D.C., Dec. 11-13.
In essence, localities, electric commissions or boards, and industrial
or economic development authorities can provide "last mile" connections
to high-speed data and Internet access service, but not cable service. The
law allows underserved areas to get needed infrastructure sooner rather
than later, May said, adding that the law has "checks and balances" to also
allow private-sector competition at a later date.
So far, the state has approved the cities of Bristol and Danville to
provide such service, while applications for the city of Martinsville and
town of Front Royal are pending, he said. In addition, Virginia's Center
for Innovative Technology, a nonprofit group empowered to promote technology-based
economic development, was charged with putting together a template on how
to establish the service, he said.
South Dakota began planning for high-bandwidth deployment in 1996 by
wiring K-12 schools, said state Sen. Royal McCracken. But the $100 million
cost to wire 176 school districts was prohibitive. So Gov. Bill Janklow
used state prison inmate labor for the installation, providing the inmates
with marketable skills and significantly lowering the project's overall
cost to about $13 million, McCracken said.
He said Janklow also persuaded local telephone companies that it would
be in their best interests to provide continuing service because once parents
and children used the Internet in the schools, they would want it in their
homes. "The connection is now there for businesses also," McCracken added.
The Internet was needed in the state, he said, as a way of attracting
businesses from around the world as well as allowing established businesses
in the state to compete.
Nationally, high-speed Internet connections — defined as speeds exceeding
200 kilobits/sec in both directions — increased 33 percent during the second
half of 2001, to 12.8 million lines in service, according to Federal Communications
Commission statistics provided by the National Association of Regulatory
Citing National Telecommunications and Information Administration data,
the National Association of Regulatory Utility Commissioners also reported
that Internet use among rural households grew 24 percent on average annually
from 1998 to 2001, and the percentage of Internet users in rural areas is
53 percent, almost even with the national average.
Minnesota state Sen. Steve Kelley said there is no digital divide in
terms of access, but there is one in terms of price. On average, a rural
school district in his state pays about $2,200 per month for a T1 line,
while an urban counterpart pays only $300 to $400 per month.
One way to promote more broadband use is to bundle the service with
"competitive video," he said, possibly referring to cable TV. Video thus
becomes a way of subsidizing the broadband service's usage.