Is Wireless the Only Feasible Rural Broadband Solution?
June 16, 2009
By Gary Kim, Contributing Editor
There’s a reason we have universal service, Rural Utilities Service funding and other mechanisms for funding rural telemedicine: absent such funding, service would be difficult to impossible to provide, at least using wired networks.
For isolated locations, satellite or fixed wireless might be the only feasible method. For many other locations, such as homes located more than 2.5 miles away from a remote terminal, but less than 10 miles distant, terrestrial wireless is likely to make financial sense, though wired facilities are possible if a provider has the stomach for investing $4,000 a home.
And though it remains a difficult issue, terrestrial wireless networks might offer both rural broadband and mobility services that increasingly are the way many people think about voice, text and other communications.
To be sure, industry suppliers have made advances in the cost of wireline broadband infrastructure over the last 10 years. But revenue prospects have gotten tougher at the same time. So it isn’t clear that the overall business case for rural broadband actually has gotten better, despite those advances.
Though costs and revenues tend to change over time, a reasonable figure of merit for monthly operating cost structure for a small, rural telephone company supplying voice services, and operating in a largely non-competitive market has ranged between $73 and $132 a month, using estimates made by National Electrical Cooperative Association and researcher Bruce Egan.
Average revenue for each line in service has ranged between $66 a month and $73 a month, with pressure to the downside because of falling access payments.
Add in the need to upgrade to broadband and a wired network services provider has an even bigger headache. Generally speaking, modern telephone voice-optimized networks are designed around distribution plant distances of 18,000 feet from either a central office or remote terminal.
Broadband-optimized networks are designed around shorter loops, though. In general, broadband networks are optimized for a smaller serving area featuring loops of only 6,000 to 12,000 feet.
That generally means networks must be redesigned with more active elements in the distribution plant, with some studies suggesting as much as nine times the former investment in remote terminals.
All that means a rural broadband upgrade can cost 10 times what is needed in a metropolitan area.
In fact, by some estimates, it can cost $4,000 a line to upgrade a rural location more than 18,000 feet away from an existing central office or remote terminal and as much as $9,400 a line to upgrade an isolated location.
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Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Michael Dinan