Why Is Expanding Broadband Still Such a Problem?

by Peter Galuszka

U.S. Rep. Abigail Spanberger (D-7th) has drawn lots of attention for her Rural Broadband Summit at Louisa County High School in Mineral on Aug. 17, which got plenty of comment from primarily rural residents unhappy that they can’t get access to quick, reliable Internet service.

Good for Spanberger, who beat Republican Dave Brat in last year’s hotly contested election. But this all brings questions: after so many years why are we still facing this?

I am now in my second decade of writing about the lack of broadband access in rural and inner city areas.

A piece I did for Chief Executive magazine about 10 years ago explored how mostly minority business owners in inner Philadelphia couldn’t afford broadband because the big providers, which would include Comcast and Verizon, cherry pick their locations. The firms wanted to boost margins so they pushed “triple play” (Internet, telephone and television) access in wealthier areas. Those not so privileged had to struggle with higher costs and access issues. “I don’t need 400 channels,” an inner city business owner told me.

Another problem is that it is costly for any provider to go the last mile to deliver service to residents or businesses in less populated rural areas.

This has an impact. A 2016 report by the Virginia Chamber of Commerce showed that in rural areas, only 55% have access to high speed broadband. In Richmond, only about 30% of African-American residents do, the report says.

Those numbers may have come down a bit over the last three years but broadband is, strangely, still a big issue. According to the Richmond Times-Dispatch, by this July, Spanberger’s office had received 139 responses to her initiative.

It’s been clear for years that this is a case where government must step in when capitalism has failed. A similar problem existed in the Mid-South during the depression with electricity. Rural folks simply couldn’t get power so the Tennessee Valley Authority was created.

Conservatives were aghast. After all, Lenin said: “Communism is Soviet power plus the electrification of the whole country.” But the job got done and the TVA area thrived.

There are some moves in Virginia to tap local and state funding and administration.

The Virginia Association of Counties has a plan. Also involved is the Virginia Tobacco Region Revitalization Region Commission which was formed with a huge nest egg resulting from a 1996 settlement from four major cigarette makers. The idea is to help tobacco areas as people stop smoking due to health concerns. In June, the commission approved nearly $8 million to help 14 localities and counties with their broadband expansion plans.

Plus, there are ideas for public–private partnerships to make providing broadband to underserved areas more affordable. Taken together, there are projects underway in the Roanoke Valley, Portsmouth, Mecklenburg and Hanover Counties and the Eastern Shore, among others.

This also sounds good but why, then, is broadband still such a problem? There are reasons that aren’t always well-reported.

One is that they big players don’t also let on where they are or are going with service, supposedly for proprietary reasons.

A bigger problem is that politicians who receive political contributions from such large firms as AT&T and Comcast, pitch laws that try to keep government entities such as cities and counties, from helping.

In 2017, for instance, Del. Kathy J. Byron, a Republican from Bedford who accepts big broadband company donations, introduced a bill that would gum up governmental efforts to expand service by requiring exhaustive studies. Byron told me that year that her purpose was to make sure that the public isn’t stuck with the bill if a broadband project fails.

Her bill did not survive after a huge outcry from cities and counties. But she did have an effect.

The national group BROADBANDNOW claimed this year that Virginia is one of 26 states that have laws blocking or limiting government involvement.

The group says that while Virginia allows municipal governments to build their own broadband networks, they “must meet a bevy of requirements first.” For instance, they can’t use public money or charge rates that are lower than incumbent rates for similar service. There are extra financial reporting requirements that private firms don’t have to meet. If the cities or counties want to offer triple play services, they have to go through major reviews.

To be sure, there have been problems with some public broadband efforts. At Bristol Virginia Utilities, eight officials and contractors accepted goodies such as NASCAR tickets from a South Carolina service provider. They pleaded guilty in court.

Such transgressions should not be used to trash efforts to get government help with serving rural and inner city residents. Unless they do, kids won’t be able to do their homework. Economic development authorities won’t be able to recruit new business. There are government mandates regarding telephone service for emergencies, so why not broadband?

This has been going on for years. It is amazing that we’re still holding “summits” about expanding broadband service.

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17 responses to “Why Is Expanding Broadband Still Such a Problem?

  1. I can’t agree with the rural broadband initiatives. As an owner of rural land on the Eastern Shore of Maryland I am well aware of the advantages of country life. The air is clean, I don’t need emission tests for my cars, the taxes are relatively low (by Maryland standards), I never pay a toll to drive on public roads (after I get over the bridge), there is almost no traffic congestion. However, the rockfish have been depleted, the oysters are almost gone, the canning plants are closed and manufacturing has moved on. You know what high speed broadband would do for rural Maryland? Allow better streaming of Netflix and watching of porn. The under-employed watermen struggling to find work as part-time carpenters aren’t going to become data scientists if they get ahold of a high speed network. The reason Amazon picked New York City and Northern Virginia wasn’t bandwidth, it was talent. Technological talent that doesn’t exist in rural Maryland or rural Virginia.

    As far as Kathy Byron … she has a point. Just ask Kentucky …

    https://www.propublica.org/article/matt-bevin-kentucky-information-highway-high-speed-internet

    Here’s my favorite quote from the article …

    “For disenchanted Kentuckians like Tina Sparkman, the frustrations of the state’s lagging and unreliable internet service hit painfully close to home. Sparkman, who lives on a farm in eastern Kentucky’s rural Letcher County, pays $69 a month for the only internet service available there — satellite.

    Each month, she’s able to download the equivalent of three Kindle e-books before her bandwidth is throttled. On cloudy days, she’s lucky to get any service at all, she said.

    “We can’t wait 10 more years for internet,” Sparkman said.

    That’s the critical problem … eBooks? She can’t order the books and have them shipped to her? Or, go to a bookstore once a month and buy books? She can only get 3 eBooks a month? Oh, the horror!

    I have no problem with underserved municipalities building their own broadband networks. I don’t think it will do them much good but if they want to place a bet on bandwidth they should be able to do so. But with their money! Raise local taxes (or borrow money), build the network and wait for the renaissance that high bandwidth surely will bring. Why do these rural broadband schemes always come with a requirement for somebody else’s money? When the broadband network fails to bring anything other than increased Pornhub usage to town you’ll still need to pay back the lenders or deal with irate citizens who paid additional taxes for nothing. If they want financial guarantees from the rest of us in Virginia they ought to damn well jump through hoops proving that those guarantees will payoff.

  2. Don the Ripper,
    You obviously want to keep everybody barefoot and pregnant.

  3. I think Don’s point of view is very shortsighted especially for someone in the tech world as the internet is vital to commerce and education to name two. Libraries also allow E-books and it’s a boon to folks who don’t live near the library. Virtually every small business these days that takes credit cards needs internet access. Farmers use the internet daily to do things like check commodity prices and weather. Kids (and Adults) can access all kinds of education resources to help them get better educated and better able to compete for jobs… You Tube videos now show everyone how to fix things like plumbing or install new equipment or troubleshoot problems.

    It’s just shortsighted to not appreciate the width and depth of USEFUL things that enable folks in rural areas to be more productive and improve their own economic circumstances.

    NOW – the question is – along the lines of Jim Bacon asking if folks should pay for their own location choices or expect “help” from others – i.e. a subsidy – because the long and short of it is – that the “market” HAS spoken (like it did for electricity and phones) and the market says that rural is not only not profitable – it won’t ROI.

    Now – even in rural MD where DJ lives they subsidize things – like education, fire and rescue and probably roads and electricity (which support rural agriculture like Mr. Perdues chickens!

    • You are confusing internet access with broadband internet access. Long before the vague concept of “broadband” was coined there was internet access through modems, via ISDN, etc. In fact, one of the challenges of “broadband” is that the inept FCC under the inept Obama Administration changed the definition of “broadband”.

      “As part of its 2015 Broadband Progress Report, the Federal Communications Commission has voted to change the definition of broadband by raising the minimum download speeds needed from 4Mbps to 25Mbps, and the minimum upload speed from 1Mbps to 3Mbps, which effectively triples the number of US households without broadband access. Currently, 6.3 percent of US households don’t have access to broadband under the previous 4Mpbs/1Mbps threshold, while another 13.1 percent don’t have access to broadband under the new 25Mbps downstream threshold.”

      Now Larry … how big is an eBook? The average eBook is between 1 and 3 Megabytes. That’s 8 – 24 Mbps. So, under the old definition of “broadband” it would have taken between 3 – 8 seconds to download an eBook. No, no … that wasn’t good enough! The eBook had to download in 1 second or rural life would be intolerable.

      These speeds aren’t basic coverage for eBooks. They are designed for multiple devices in a household accessing video and video chat. And what kind of video is being accessed? Last April, 3 of the top 8 websites were porn …

      https://www.similarweb.com/top-websites/united-states

      Don’t fool your self, LarrytheG … broadband (rural or urban or suburban) isn’t typically used by people to get their masters degrees.

      You seem very supportive of urban and suburban drivers paying to drive on public roads to go to work (so they can earn the money to pay their taxes) … why are you so opposed to rural people paying the cost required to stream Netflix?

      As for where I live in rural Maryland … my county has the second highest median net worth of any county in Maryland. Turns out that being located on the Chesapeake Bay has been a boon to the local economy.

  4. Interesting questions raised all around…. I’d like to interject a couple of points.

    First, from a cost-benefit analysis, it’s probably hard to justify extending last-mile broadband to every rural resident. It may make sense to subsidize broadband to small towns and cities where there is enough density to bring down the cost-per-subscriber to affordable levels. But it’s important to set realistic expectations.

    Second, the definition of “broadband” is continually changing. The new benchmark will be 5G. That technology will cost tens of billions of dollars to roll out nationally, and rural areas will be the last to get it. What else would you expect? What if sparsely populated rural areas invest millions of dollars bringing up their broadband access up to an obsolete standard? Then what?

    Third, Peter makes a good point about rent-seeking behavior by the big telecoms. Everyone utilizes the political system to stack the marketplace to their advantage. There is no reason to think that telecoms are any different. Someone should identify all the laws/regulations in Virginia that hinder competition, subject them to cost-benefit analysis, and eliminate those that stifle competition without any offsetting benefit. At the very least, government should do no harm.

    • Why should entertainment be subsidized for anybody? I can’t hunt elk in Fairfax County. No fair! The government (using other people’s money) should trap and import elk into Riverbend Park so my neighbors and I can hunt elk.

  5. Rural broadband, often using leased Educational Broadband Service and licensed Broadband Radio Service spectrum, was beginning to take hold in rural Virginia when the Big Recession occurred. But it did not get back on track. The Obama administration’s infrastructure funding program slowed and even prevented the ability of wireless broadband providers to get financing. No private money source would invest until it knew who won the grants. But the time grants were awarded, investment money went elsewhere. The delay was just too long.

    Virginia public schools with EBS licenses sat and waited for more than ten years getting only periodic lease payments and no bargained-for free connections. Those would be used to extend broadband to low-income or hard to serve students who lacked broadband access.

    One potential operator to which I negotiated EBS leases even had a large purchase order from UVA but could not get financing. Only within the last month did we negotiate an assignment of certain leases to a bigger company that will use the spectrum to deliver high-speed wireless broadband services.

    While lots of factors were at play, in the case of west central Virginia, I’d assign 60% of the blame to the federal government and the poorly though-out and administered Obama infrastructure development process. This does not explain everything about rural broadband but it does address west central Virginia.

    • Good points Tmt and jim. One thing tmt, you may be right about Obama but where the hell is Trump’s much ballyhooed infrastructure program? The trillion or so bucks?

  6. I think it is critical we treat broadband as a utility and ensure universal access. The internet is becoming central to our day to day life, commerce, and information flow. The biggest problem is the lack of competition. In most markets, Comcast has no competitor and has increased prices to unaffordable levels. Their pricing is also opaque, tied up with various “bundles”. Time to separate broadband from content. Let’s ramp up the competition.

    • I agree with opening up competition for telecommunications in general. The God awful cellular auctions under the Reagan Administration enriched paper pushers like Mark Warner ultimately led to a ridiculous spectrum oligopoly in the United States.

      The real question is whether “broadband” should be subsidized. I put broadband in quotes because there is no accepted definition of what that means. You don’t need much bandwidth to get a stock quote (or a quote on wheat) but you need a lot to stream HD video. And don’t be fooled … the vast majority of bandwidth being consumed to the home is streaming video and it’s not algebra lessons.

      • It’s not lessons on how to take care of your body, your house, or your vehicle either, from what I’ve seen.

        Now my dad and I watch lots of Youtube videos about science and technology and car repair and etc…

        “But we ain’t from around hea”

  7. Indeed. What would the situation be if 30 years ago a set up similar to the electric coops had been created. Monopoly territories, a duty to serve, regulated rates….too late now. With everybody in the coop, rates might not be too bad, but try to do it now and too many have service from some other provider. I’m told Dominion put out an RFI just the other day on this topic, Jim…hint, hint….

  8. As far as cable TV is concerned, they still have franchise for video and a duty to serve people in the franchise territory. While that doesn’t cover broadband, a local or state franchise authority can make the cable company deliver video to all areas of an urban community served. And if one has to deliver video, the incremental costs for adding data and voice are incremental. Also, 4G data that allows for video and Internet access is widely available in urban areas, as are various unlimited data plans. I’d need to see a lot more evidence of availability problems in urban areas before I’d buy a redlining argument. Lack of availability in rural areas and small towns, more likely.

  9. Front-page headline in today’s Wall Street Journal: “The Truth about Faster Internet: It’s Not Worth It.”

    “Our panelists used only a fraction of their available bandwidth to watch streaming services including Netflix, Amazon Prime Video and YouTube, even simultaneously. Quality didn’t improve much with higher speeds. Picture clarity was about the same. Videos didn’t launch quicker. ….

    For a typical household, the benefits of paying for more than 100 megabits a second are marginal at best, according to the researchers.”

    Would it be logical to conclude that subsidizing rural broadband above that 100-megabits capacity be a waste?

  10. Yeah, i saw the journal piece but that assumes people HAVE adequate broadband

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