The digital divide [Telegraph-Herald (Dubuque, IA)]
(Telegraph-Herald (Dubuque, IA) Via Acquire Media NewsEdge) The alphabet soup of connectivity CAF: Connect America Fund. A new fund the FCC hopes to create to help provide affordable broadband access. It would be funded by restructuring USF and reforming ICC. E911: Enhanced 911. A type of emergency call that can find the location of the wireless user if they are not able to provide it themselves. Usually, multiple towers must be in range to triangulate the position. FCC: The Federal Communications Commission. An independent U.S. government agency charged with regulating interstate and international communications. ICC: Intercarrier Compensation. Fees that companies pay to each other to use each other's networks. mbps: Megabits per second. A measure of data transfer speeds. A megabit is one million bits. NBP: The National Broadband Plan. Congress instructed the FCC to create the NBP as part of the stimulus bill of 2009. The plan calls for universal access to speeds of 4 mbps, and speeds of at least 100 mbps for 100 million U.S. homes. USF: Universal Service Fund. A small surcharge on all phone bills that supports service in high- cost rural areas. VoIP: Voice over Internet Protocol. A service to make calls over the Internet. for more information For more information on the National Broadband Plan, visit http:// www.broadband.gov.
Businesses, restaurants and bars all have their "regulars," but libraries have them, too. They come several times per week, or even every day, perhaps on their lunch hour. They come for the Internet access. They come because they don't have a computer at home, or they can't afford to connect it to the Internet.
"There still remains a digital divide - people who have, and people who have not," said Susan Henricks, library director at the Carnegie-Stout Public Library in Dubuque.
In March 2010, the Federal Communications Commission unveiled its National Broadband Plan, which aims to change that. It is anticipated that final rules for the plan will be released in October or November.
However, local telephone and Internet providers fear the plan actually will hurt their ability to serve rural areas by redirecting their funding, which could lead to sharp price increases, degraded service and a larger digital divide.
Goals of the Plan
The plan calls for universal access to speeds of 4 mbps, and speeds of at least 100 mbps for 100 million U.S. homes.
"Broadband is the great infrastructure challenge of the early 21st century," reads the executive summary of the plan. FCC documents compare the drive to connect all Americans to broadband to initiatives of centuries past, when federal involvement helped to build the transcontinental railroad, bring electricity and phone service to rural areas and connect the interstate highway system.
"It's about connecting every part of America to the digital age," said President Barack Obama in the 2011 State of the Union address. "It's about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It's about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to- face video chats with her doctor."
A perceived lag in connectivity compared to other countries was another motivation for creating the plan. Countries such as South Korea have greater Internet access than the U.S. However, Dave Duncan, president of the Iowa Telecommunications Association, said that was not a fair comparison, since all of South Korea is about the size of New Jersey.
"It's a lot easier to hook that up than say, Iowa or Montana," he said.
Finally, the national plan aims to bring communications regulations into the 21st century. Calls now made via cellphone, landline or over the Internet all are regulated differently, although the call might essentially be the same.
"We all agree with the goal of getting broadband to all Americans," Duncan said.
He said the problems with the plan are in the details.
Telecommunications providers in Wisconsin share the same concerns. In Illinois, the more mixed urban and rural population has led to more mixed opinions.
"We're hopeful that the leaders in Washington will recognize that whatever decisions are made should not affect rural Wisconsin, and rural America," said William Esbeck, executive director of the Wisconsin State Telecommunications Association.
Access and adoption
To accomplish the goals of the plan, both access to broadband and adoption would need to increase. In Iowa, it seems adoption - people's choice whether to purchase Internet service when it is available - is the bigger stumbling block.
According to connectiowa.org, a nonprofit commissioned by the Iowa Utilities Board to map broadband coverage, 99.96 percent of Iowa households have access to the Internet if mobile and satellite providers are included.
Yet the library "regulars" still are dropping in. For many of them, the cost of Internet service is what keeps them from having it at home.
Adoption rates can affect connection quality for everyone. Providers don't have as much economic incentive to build and maintain networks in and around areas with low adoption rates - Duncan used Amish communities as an extreme example.
A digital divide
One of the biggest issues rural carriers see with the plan is the proposed speed of 100 mbps for 100 million homes, and 4 mbps for all other areas, deemed "rural." Under this definition, all of Iowa would likely be treated as a rural area.
"That will absolutely create a digital divide," Esbeck said.
However, Duncan said the FCC might back off that definition after hearing criticism from rural companies - leaving uncertainty as to what would be considered "rural."
Duncan described 100 mbps as "lightning fast" Internet, and it already exists in some areas. In Dubuque, Mediacom advertises speeds up to 50 mbps.
Meanwhile, 4 mbps isn't even very fast by today's standards - Duncan said anyone watching Netflix or gaming online would probably want more capacity and faster speeds. Streaming high-definition television uses between 6 and 10 mbps per TV, and future advances such as 3-D TV and the increasing popularity of cloud computing will require more.
"I don't see everyone needing 100 meg (mbps)," he said, "but then, 10 years ago, I didn't see people needing even a meg or two."
Duncan said the federal government should aim to provide everyone equal access.
"If you're trying to get broadband to everybody, don't create haves and have-nots."
'Uncertainty is bad for investment'The biggest thing rural telecommunications companies fear is a restructuring of the Universal Service Fund and Intercarrier Compensation. Duncan said for small companies, these funds can account for between 40 and 70 percent of a company's total revenue. Without these funds, phone and Internet service in rural areas already would be much more expensive.
Large companies, or companies that serve denser areas, rely less on these because they make more revenue from their customers.
The Universal Service Fund is a small surcharge on all phone bills that helps to subsidize phone service to high-cost rural areas. It was born out of the Telecommunications Act of 1996 to help bring phone service to all areas. In the 15 years since, many telecommunications providers found ways to deliver Internet service over those wires as well.
Intercarrier Compensation is a fee telephone companies pay to each other to use each other's networks. Duncan said that most long- distance calls touch between three and six carriers.
Wireless services rely on Intercarrier Compensation as well, since the transmission isn't completely wireless. The call only is sent wirelessly to the nearest tower, where it connects to a landline.
The National Broadband Plan proposes shifting up to $15.5 billion away from the Universal Service Fund and restructuring Intercarrier Compensation to create a new fund, called the Connect America Fund, to achieve its goals.
Duncan said this worries rural carriers because it creates uncertainty.
"It's not very clear how the Connect America Fund is going to work," he said. "In the name of trying to encourage us to deploy more broadband, you're cutting two major revenue funds."
He said this could be particularly damaging to companies that have recently invested in expanding their networks, incurring debt that they might have more difficulty paying back under the new regulations.
"Now, what the government is doing is kind of pulling the rug out from under the feet of these small companies," Duncan said.
There also is a fear that future investments will be slowed if companies don't know what regulations they will be subject to.
"Uncertainty is bad for investment," Duncan said.
Dave Gibson, general manager of Cascade (Iowa) Communications, said his company has made a conscious decision not to borrow money to invest under these circumstances. For example, the company offers high-speed fiber-to-the-home within three miles of its office, but have waited to expand farther. He said the impact on Cascade Communications might be a loss of between 30 and 40 percent of revenue.
"We've been reluctant to expand," he said. "We have to know that we can get some kind of recovery on our investment."
Impacts on consumers
"Any business that takes a hit like that, there's going to be some impact," Gibson said.
If the rural companies do stand to lose that much of their revenue, the impact on consumers could show up in their bills.
"There will be a significant upward pressure on prices that companies will have to charge their consumers," Duncan said.
Higher prices might decrease adoption rates - fewer people might decide that having broadband at home is worth it in times of tight budgets.
impacts on businesses, services
Although consumers are likely to notice higher rates on their bills, the effects of more expensive broadband or degraded service could be far-reaching.
Education, emergency services and health care are just a few industries that rely on broadband access - and often require speeds greater than 4 mbps. For example, a rural hospital might have to send very large files, including X-rays and pictures, to a larger hospital if a patient is airlifted out.
"Sometimes, speed is of the essence," Duncan said.
Many small businesses also could be strained by increased rates.
"If you stop and think about it, broadband touches every industry," Duncan said.
Even credit card transactions rely on broadband to go through.
"We just see a real negative impact to economic development," Gibson said.
In small towns, broadband can impact economic development and jobs by helping existing businesses to grow and attracting new businesses.
The city of Bellevue, Iowa, owns a fiber-optic system that connects every home and business. City Administrator Loras Herrig said he thought that access was a factor in Sedgwick Claims Management Services Inc. relocating to Bellevue last year.
A municipal alternative?
Bellevue's system is somewhat rare, both because it is city- owned and because it uses fiber-optic technology.
"To have fiber to the home in every business and every home, for a city our size, we think is pretty unique," Herrig said.
Since Bellevue doesn't offer voice services on its system, the city doesn't receive Universal Service Fund or Intercarrier Compensation funds, and Herrig said he doesn't anticipate the national plan having an impact.
He said the system, which cost about $3.2 million to date, has had its headaches, but the overall benefits outweigh them. He said about 70 percent of Bellevue's citizens are customers.
He stressed that he believes if private enterprise can provide a service, government should stay out of it. However, he said that private enterprise wasn't coming to Bellevue, and he didn't want citizens to have to choose between living in a small town and having quality access.
"It just hasn't been profitable for private enterprise," he said.
Large carriers, small carriers and state organizations have each proposed alternate plans. The FCC opened a public notice, and has asked for answers to numerous questions about each plan by Aug. 24.
After another review period, a FCC announcement is expected sometime in October or November. It might include the final rules for implementing the plan. Regardless of what happens, the goal remains the same.
"If everybody gets hooked up to broadband and everybody uses it, we all win," Duncan said.
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