This year, the government will provide ten million dollars in grant money, and one-point-four Billion dollars in low interest loans to bring high-speed Internet to Rural America. The majority the money will end up in the most destitute areas of the country.
Next year, however, the available government funds for rural broadband implementation will plummet. Grants will be reduced by 80 percent, and loans will be cut to roughly one tenth of 2003 levels.
The F-C-C reports that 88 percent of U-S zip codes have at least one broadband service provider. That translates to 99 percent of the population. But access and affordable service are not the same thing. Many rural areas are still waiting to see what the broadband buzz is all about. But, some rural communities are taking control of their own destiny by finding creative ways to procure this vital link to the rest of the world. Tyler Teske explains.
A few miles upstream from Keokuk, Iowa, nestled in a bluff next to the Mississippi river, is Orba-Johnson Transshipment company. The location is ideal for moving coal from train cars to river barges, but general manager Breen Turley claims telecommunications is another situation entirely.
Breen Turnley, Orba-Johnson Transshipment: "We're at the end of the phone line and it is, we've had some real difficulties with it and we're in the position right now where our telephone line is okay but I don't think it would work reliably on a computer or Internet connection as a phone line."
Turley contends even faxes are a challenge and often do not transmit. The lack of not only high speed access, but any access at all, turned Turley to a wireless internet connection. Now he can reliably communicate with clients, and keep track of current energy, mining, rail, barge and electric utility business conditions, all at broadband speeds. According to Turley, discovering such information without the connection can be delayed by as much as three months.
Breen Turley, OJT: "Well, it enables us to look at and perform strategic analysis of what we ought to do to improve services for our customers and everybody else that's involved. Of course, we communicate with all the transportation modes that we use so we know when we have trains coming in or barge coming in as the case may be and/or going out."
Southeast Iowa is representative of many rural areas in the U-S. Internet access comes in only a few options: a 56k dialup via modem over phone lines which many residents claim are not entirely reliable, or, for more than fifteen-hundred dollars a month, a dedicated 1.5 megabit connection, or T1, an option sometimes used by businesses but rarely by the average consumer. And more recently cable modem access has popped up in town, but not county wide.
To fill the price and speed gap, Interlink L-C began providing wireless broadband internet access to southeast Iowa and regions within the contiguous states in 1998. The company is one of more than 4000 Internet service providers, or I-S-Ps, across the nation taking advantage of unlicensed spectrum, radio space anyone can use, provided they follow Federal Communications Commission rules. Interlink provides wireless access at data rates that typically fall between dial up and T1 speeds for around forty dollars a month, comparable to other broadband services such as DSL and cable modems.
Wireless is only one solution to bring broadband to the 97 percent of the country known as Rural America.
In areas with independent local telephone companies the answer has been clear. The small geographic regions served by independent telcos helps focus resources and create a unique connection with the community.
Russ Rock, General Manager, Farmers Mutual Telephone Company: "We've been here 100 years now already so we're going to try for the next hundred. The fact that we are here, we are part of the community, it's just natural that we would try to progress with the community."
Russ Rock is general manager of Farmers Mutual Telephone in Jesup, Iowa. The cooperative provides telephone services, cable television, and internet access via dial-up and high speed Digital Subscriber Line, also known as DSL.
An important part of the service network is an investment in fiber optic cable which makes up a major portion of the Farmers Mutual Telephone infrastructure. The fiber can carry phone calls, high speed Internet access, and cable television into the countryside. And unlike it's copper counterpart, there are no distance limitation issues with fiber optic cable. The fiber moves signals closer to the customer, providing the same services to everyone in the exchange.
Russ Rock: "The day of the small farm, the person that was self-sufficient is pretty much gone. So, they've had to change and that's true of anything in a rural area, you have to keep up with what's happening or you're going to get left behind."
Communities with municipal utilities, such as Manning, Iowa, also maintain the same community focus as independent telcos. Because Manning had the capital to invest and the support of the residents, the town is able to provide telecommunications services, including broadband, to the community. The upgrade in services also enticed the high tech firm E-C-I to relocate its technical support center and hardware fulfillment division to Manning. E-C-Is move cut overhead for the company and created jobs with good wages for Manning residents.
Thirty miles away in Carrol, Iowa, is another municipal telephone company. But unlike Manning, Carrol did not have ready cash to invest in telecommunications infrastructure. Instead the community's strategy has been to use the municipal telephone utility as a recruiter to encourage existing telecommunications companies to provide services to the almost 22,000 people living in the city. In the span of four years, broadband availability expanded from no service to what mayor Ed Smith calls a competitive marketplace with multiple providers.
Ed Smith, Mayor Carroll, Iowa: "Basically we're helping drive them to recognize Carroll as a viable market."
The ability to access a high speed Internet connection has been beneficial to the businesses in Carrol such as JEO Consulting, an engineering firm with offices across the Midwest. The company is moving toward a model where files in every office can be shared via the Internet regardless of geographic location.
Once broadband came to town, branch director George Parris jumped at the opportunity.
George Parris, JEO Consulting: "In my own mind there isn't anything we can't do out of this office that another community or another business would be able to do in a larger metropolitan community. even a smaller community could be competitive as long as they have the high speed, the bandwidth that you need."
Having broadband service means the massive engineering files produced by JEO can be moved between offices or sent to clients in a matter of minutes instead of a matter of days.
In recent months, the cost of broadband implementation has dropped precipitously. For instance, in July of 2002, Interlink CEO Brad Kline priced a brand new wireless I-S-P including authentication, web servers, email and a single access point at around 80 thousand dollars. Today, the same setup would price out closer to ten thousand dollars, a drop of over 80 percent.
But, cost may be less of a concern than survival.
Rural areas often face two problems: lack of population and low per capita income. Keokuk is no exception. The City is located in Lee county, Iowa, which has one of the highest unemployment rates in the state. Early in the past century, the economy of Lee county relied on heavy industry. Lowell Junkins, executive director of the county's economic development group, claims a small victory in not losing more businesses.
Junkins has been advocating county-wide coverage for the past year, and hopes to see this goal realized by the end of 2003. Covering the county with broadband would mean a business could find any ideal location in the county and not be concerned about Internet connectivity.
Lowell Junkins, Lee County Economic Development Group: "Being able to answer the question, can I get high speed Internet access is a pass or fail question."
While telecommunications alone is unlikely to be the salvation of small towns, its absence is clearly detrimental. Broadband access creates an environment that changes the significance of geographic location. And it affords small communities the opportunity to make themselves more attractive both to residents and businesses.
For Market to Market, I'm Tyler Teske.