Buy Local (Including Broadband)

Providing broadband locally – with help from electric utilities – can be a good way to anchor rural economies.

Many rural communities, even if they have broadband, have too few broadband options. Rural communities just large enough to have two service providers yet too small to attract a third provider, let alone more, represent the middle ground of rural broadband that is often overlooked by both private and public investment.

Most communities of any density have incumbent telephone companies that offer DSL, which is borderline broadband. If a community is fortunate, it has a second wireline provider, the incumbent television company, which offers cable service and speeds that commonly meet the definition of broadband. The cable company, as the only true broadband option in town, is often characterized by high cost and poor customer responsiveness, which reflect this lack of competition. Subscribers in these small, rural communities pay more for service that is inferior to broadband services available to larger communities.

Because communities like these are served by one or more providers that exceed many federal broadband benchmarks, they are disqualified from most federal grant programs. Similarly, corporate decision-makers plan service growth in cities that offer more favorable returns on investment. Why would AT&T invest $20 million to upgrade a small, rural community to fiber to sell a gigabit service for $80 per month if it can continue selling 10 Mbps DSL for $70 per month using local infrastructure that was built and paid for decades ago?

Local startup providers are motivated to make things better for their hometowns, but they often hesitate to risk competing with corporate providers. When a provider such as AT&T or Comcast wants to improve service to any area, it can and will. It is no coincidence that, when a community announces plans to offer its own broadband services, the incumbent may suddenly find a way to improve services after years of resistance.

This is not a new phenomenon. In his 1930 State of the Union address, President Herbert Hoover said, “Competition is not only the basis of protection to the consumer but is the incentive to progress.” Nearly 90 years later, his statement rings true regarding rural broadband, where lack of competition has effectually removed the incentive for service improvement.

Indeed, the plight of broadband in many small, rural communities today boils down to a lack of competition. Incumbent providers have become complacent, offering minimal services at premium prices and serving customers over aging, oversubscribed infrastructure that they have no incentive to improve.

A Local Path
That leaves communities to figure out their own paths. Broadband advocates for years have stressed the importance of forming partnerships to bring together stakeholders in an attempt to find common ground and move forward with a plan. Each community is different, and there is no one cookie-cutter approach to make things happen instantly. Understanding who the stakeholders are, how people want to use broadband and where the pain points are takes time.

Local electric utilities are uniquely positioned to solve the rural broadband problem. Every electric utility and electric cooperative needs to consider broadband. Electric utilities own poles and conduit, they have experience working in and maintaining public rights-of-way, and they already connect and maintain wired infrastructures into all homes and businesses. With an understanding of local policies and a long track record of customer service and community involvement, local electric utilities need to be involved with broadband in the communities they serve.

Utilities that have not yet considered providing broadband or have decided against broadband often justify the decision by saying “We’re an electric company, and that’s all we do,” or maybe, “We don’t run a technology company.” All that is fine and is the prerogative of each utility, but at its core, every utility is a poles-and-wires company that is heavily involved with public infrastructure and maintains the public rights-of-way. These are all important community assets and are the fundamental building blocks for broadband infrastructure.

To continue reading on Broadband Communities Magazine click here

Leave a Reply

Your email address will not be published. Required fields are marked *