Tales of the Sausage Factory

Solving the Rural Broadband Equation — Fund Infrastructure, Not Carriers.

A happy confluence of political circumstances has made rural broadband a hot topic and makes it possible to believe that perhaps, finally, the stars will properly align to do something more than the Connect America Fund. No offense to CAF, but everyone knows that CAF alone cannot provide quality, ubiquitous affordable broadband to all Americans. Not by a long shot.) Needless to say, Republicans and Democrats have rather different approaches to how they want to close the rural digital divide. I’ll save a comparison of what’s out there for a different post, because I want to take this opportunity to propose an entirely different approach than anything else out there at the moment.

 

It begins by recalling some wisdom I learned at my father’s knee. My father teaches tax law at Boston University. When grading student exams, he would often shake his head and sigh. “Answer the question asked,” he would say. “Don’t answer the question you want to answer because you have the answer, answer the question asked.”

 

What does that have to do with rural broadband? When we think about solving the rural broadband problem, nearly everyone tries to answer the question: “How do I find a carrier to serve rural areas.” But that’s not actually the problem we’re trying to solve. The problem we’re actually trying to solve is getting people access to quality broadband so they can participate in the modern digital economy and modern society generally. On the surface, that may look like the same thing. After all, you can’t get broadband access without some kind of carrier, right?

 

But if we start by framing the question in terms of a goal (get people broadband access) rather than a solution (find people a broadband carrier), we open a whole new world of solutions and approaches. As I discuss in more detail below, the reason rural communities don’t have broadband access is fairly straightforward: the communities in question are not sufficiently profitable to serve to justify the investment by profit maximizing firms (I’ll get to the importance of the word “sufficiently” below). If we then apply the skills we all (hopefully) learned back in high school math, we then break the problem down into solvable components. So we can either (a) raise the profitability of the target area; (b) lower the cost of deployment and operation; or (c) find entities that are either not motivated by profit or that are satisfied with much smaller profits.

 

We solved this one way back in the 20th Century. But the great virtue of the modern communications market, which allows us to break up the supply chain and bring in economies of scale from other markets, provides us with a bunch of new ways to solve the problem. Ideally, used in combination, we can have a solution that doesn’t lock rural areas in to a single, permanently subsidized provider, but instead closes the digital divide and enhances competition and potentially drives down everybody’s costs.

 

Short version — fund infrastructure, not carriers. And by “fund” I don’t just mean “throw money at,” although we need to be clear there is no way to avoid throwing money at this if we want to get the job done.

 

Lets break this out below . . . .

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Posted in Series of Tubes, Spectrum, Tales of the Sausage Factory, The Stimulus Package (ARRA) | Also tagged , , | Comments closed
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