Broadband Infrastructure to Rural Areas is on the Move at the Broadband Breakfast Club

WASHINGTON, Friday, October 21, 2011 – Rural broadband providers, national union members, federal agency officials and state broadband administrators squared off on Tuesday at the Broadband Breakfast Club’s keynote and panel presentations on “Bringing Broadband Infrastructure to Rural Areas: Where is the Progress?”

Event Highlights

Highlights from “Bringing Broadband Infrastructure to Rural Areas: Where is the Progress?” from BroadbandBreakfast.com

Complete Program

“Bringing Broadband Infrastructure to Rural Areas: Where is the Progress?” from BroadbandBreakfast.com

Moderator, Jerry Hagstrom of the Hagstrom Report, set the stage for the morning’s discussion by highlighting the necessity for broadband in Rural America.  High speed internet is not only crucial for telemedicine, education and access to Native American communities but is important for general rural development and prosperity including the ability of the farming sector to make equipment repairs and access information about markets.

Undersecretary for Rural Development of the United States Department of Agriculture, Dallas Tonsager provided the keynote.  Tonsager is proud of RUS’s progress on loans and grants awarded through the broadband stimulus initiative and is anxiously awaiting the Federal Communication Commission’s Universal Service Proposal to see how it would benefit rural communities.

The Undersecretary expressed the importance of different technologies like wireless and fiber in addressing the needs of different communities. “It takes an eclectic set of solutions to meet the challenge and get out there and serve that broad area of the US…the stakes are high.”

Tonsager was pleased with the $3.5 billion in stimulus dollars that went to support grant and loan projects.  He mentioned that while over 100 projects are in the act of construction or completed there are some that are moving along slower than expected.  Those projects he stressed are very large and require intense planning in order to be executed properly.  All funds are slated to be spent by 2015.

Tonsager also noted that over 110 million dollars have been allocated to 25 projects aimed to help tribal communities.

“How do we keep moving forward?” asked Tonsager, “we have to be persistent and focus on this critical period of investment.”  He also stressed the importance of the Community Connect Programs which focus on infrastructure to develop community centers that provide free public access to broadband.

Tonsager also touted his staff’s focus on the “Build Out and Build On” efforts. “The intension is not just to get to the homes, but to provide them with the support to help them build their businesses.”

Addressing the USF proposal the Undersecretary said “With the proper support agricultural and rural communities will be the ones that help get this country out of a recession.”

Hagstrom then asked the Undersecretary about the threat of budget reductions on the agency and how cuts would affect programs that support rural development.

Tonsager said while he realizes the need for deficit reduction, there is strong support for rural development.  He also noted that he spends a lot of time making the case that the agriculture community needs the rural development programs.

Tonsager said that if faced with deficits cuts, there are possibilities for consolidation of some of the 42 programs currently operating under RUS and there are additional steps that can be taken to target better loan opportunities in order to keep delinquencies low.

The panel that followed consisted of six experts with varying perspectives on the RUS programs, the USF proposal, national goals for broadband adoption. These six included: Chandler Goule, Vice President of Government Relations, National Farmers Union, James Kohler, Deputy Director of Enterprise Technology Services, Alaska Department of Administration, Forbes Mercy, President of Washington Broadband Inc & Board Member/VP & Legislative Committee Chair, Wireless Internet Service Provider Association (WISPA), Leif Oveson, Director of Government Affairs, National Telecommunication Cooperative Association (NTCA), Jaqueline Johnson Pata, Executive Director, National Congress of American Indians (NCAI) and David Russell, Solutions Marketing Director, Calix and Head of the Fiber-to-the-Home (FTTH) Council’s Regulatory Affairs Committee.

Goule expressed NFU’s support of broadband adoption and reiterated the importance of broadband in the daily lives and tasks of the farming industry.  Rural development in broadband is essential to economic vitality of the farming community.

Kohler from Alaska’s main concern is “when is rural America going to get adequate infrastructure.”  He said, “if you take the remarks of Chairman Genachowski at face value… it will not be anytime soon.”

Kohler was also concerned about the concept of the auction program; he stated that “the further you get from population density, the fewer competitors you are going to get for USF funding.”  Kohler added that Rural America’s best friends are their state commissions, and he was surprised that many states have not been more vocal about the role of state authorities leading up to the FCC’s proposal.

“What we do not see,” said Kohler “is how great the challenge is to actually connect many of these areas.”  He believes that rural carriers are going to be hard pressed to meet many of their obligations because of the severe lack of infrastructure in many rural places.

Kohler feels that the government should be focused on getting everyone up to even 2G or 3G before they worry about meeting their goal of 4G.

Mercy made a strong case for wireless internet service providers and claimed that those providing fixed wireless have been the true innovators in the most rural areas.  Mercy said that there is a misconception that there are only two types of broadband providers, cable and telecom companies.  WISPs can ignore the density metrics used by the major carriers that seek 1000-3000 homes per square mile.  In some areas of Texas Fixed Wireless Service Providers provide broadband to areas that only have 10.48 homes per square mile.  Mercy said that this important information “will provide clarity and credibility in preventing federally funded aid to competitors in the form of grants or USF when an existing fixed wireless provider is already an incumbent.”

Obstacles for fixed wireless come from the vast swaths of unused spectrum and the inefficient use of white spaces.  In the end, Mercy noted that fixed wireless equipment is much less expensive than the equipment used by mobile providers and can be deployed much faster in rural areas.

Oveson from NTCA highlighted the fact that it can get very expensive when rural independent service providers serve 40% of the US land mass with only 5% of the US population.  He addressed the slower pace of some of the RUS loan and grant infrastructure build out projects, but understood some of the issues with historical preservation areas and fiber shortages that have slowed down some of the projects.

NCAI represents 565 tribes throughout the country but there are only 9 tribal telcos.  While Pata was proud of the telemedicine developments in the tribal communities she stressed that with unemployment levels ranging from 20-90% broadband deployment to tribal is the key for future economic development

Russell was speaking on behalf of Calix as well as the Fiber-to-the-home (FTTH) Council that represents 250 service providers and vendors.  Calix is the largest electronic vendor to rural markets; they provide DSL as well as fiber to the home.  Russell stated that all technologies that provide broadband require fiber at some point, fiber infrastructure is very important even for wireless providers.

Russell believed in a three prong model of success first prong being USF support, second prong being support from RUS programs and the essential third prong is lies in the success of BTOP and its focus stimulating middle mile and last mile infrastructure build out.

Russell ended his statement with a note of caution for the USF proposal that focuses on the cap and a capital fund model. Russell suggests that the FCC focus on an operating fund model, “giving people an annuity every year allows them to leverage private capital.”

A very interesting question was raised by Stephanie Joyce from Arent Fox, who asked the panelists whether USF should focus on income and not just census numbers. “Would you support means testing of any kind in connection to USF funding for broadband in rural areas?”

Both Kohler and Pata were against means testing citing concerns that it would reduce incentive to build out to the last mile. Oveson was against means tests because it would add another step of uncertainty for the providers, “a provider might hesitate because they would not know what part of their constituency would apply.”

Mercy on the other hand believed if Telco’s build out they should build out all the way.  He also noted that the customer should be able to choose who they give the voucher to provide them this that service.