Congress applies the capital carrot to encourage capitalist businesses, large and small, to provide broadband access to the rural areas of the United States.

by Heather Mark ARS Networking Analyst [July 16, 2001]

There is no broadband in Florala, AL. The small town on the border of Florida and Alabama is home to a population of less than three thousand people, the state of Alabama's largest natural lake, and not one high-speed Internet provider.

It might seem natural to assume that a town as slow-paced as Florala does not need the connectivity provided by high-speed access. It is even more natural to assume that providers would be reluctant to build expensive infrastructure to provide such a place with service, especially when profit margins in the residential broadband market are so anemic.

Providers have little or no incentive to address the needs of those living in communities such as Florala.

The capitol's encouraging capital investment
Alas, living in a capitalist society, it takes the promise of said capital to get companies to act. Rural and inner city communities hold little promise of increasing a company's bottom line, and so continue to be overlooked in the broadband barrage. This being the case, Congress has taken a number of steps to "encourage" providers to enter underserved areas.

Most notable among the current batch of bills in Congress is the much-maligned Tauzin-Dingell Bill. The bill seeks to speed deployment through the reduction of restrictions on the Bells. For an industry that is already in dire straits as a result of lack of competition and overreaching Bells, this bill is likely to prove even more detrimental to competition.

Removal of restrictions is unlikely to speed deployment to areas that are suffering from lack of infrastructure.

A more efficacious way to encourage the speedy deployment of technology is to offer grants and loans to companies that bring either infrastructure or emerging technologies into areas that Congress has defined as underserved. In that manner, companies have to produce less significant capital outlays to offer the service, which is far more compelling than simply saying to a company, "There's an unserved rural area. Go to it!"

That having been said, Congress is now developing several bills designed to encourage the development of rural networks as well as new technologies that may not require the extensive infrastructure investment that DSL and similar technologies require.

One such example is the Broadband Expansion Grant Initiative of 2001, introduced in the House on April 4, 2001. The bill calls for grants and low interest loans to be given to companies that are developing new technologies that will spur economic growth in poorly developed areas of this country.

Overcoming the political economy of isolation
Technologies such as Powerline Broadband, which will deliver Internet access over the power lines that crisscross the country, would require less capital outlay (the "pipeline" for such a service already being in existence) and would be able to reach virtually every home in America.

Speeds would be much higher and the cost would be lower, making the service available to those not served now—not only to the geographically isolated but also to the economically isolated.

FCC Chairman Michael Powell described the movement towards broadband communications as a "great migration" that will shape the future of the United States. Not only does access to high-speed Internet grant users information and entertainment instantaneously, it also provides links with education and business, making its presence in a community necessary for its long-term economic health.

Communities such as Florala are kept afloat by the small businesses that have been in the area for, in some cases, generations. As more and more large stores move toward e-commerce, those small businesses without access to broadband are left to flounder in the new economy.

Mom and Pop shops that lack a web presence are unable to compete. The availability of high-speed access is essential to the survival of small-town economies. To ensure that there is enough room for the Florala's of the world in the "great migration," new technologies for delivery of Internet access must be encouraged.

— End

 

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	[Jul. 13, 2001]	Busting Up The Cable Oligopoly
	[Mar. 28, 2000]	Last Year's Rural Broadband Policy Didn't Work