GUEST COMMENTARY: Broadband penetration key to rural economic growth

2010-02-06T00:00:00Z GUEST COMMENTARY: Broadband penetration key to rural economic growthBy Dom Caristi
February 06, 2010 12:00 am  • 

It has been well documented that the United States does not lead the world in broadband penetration. In fact, the U.S. ranks 15th worldwide. When ranked according to connection speeds, a recent report from Akamai Technologies, a very popular Web-acceleration service, shows the United States dropping to 18th place.

Most experts recognize the importance of broadband on many levels: broadband provides the connections necessary for 21st century business; broadband is used more each day for medicine and education at a distance; and people increasingly get their news, information and entertainment via broadband connection.

The Rural Utilities Service and the National Telecommunications and Information Administration have the task of distributing more than $7 billion to expand broadband access through the American Recovery and Reinvestment Plan. The broadband stimulus funds are designed to create jobs short-term as the connections are made and, it is expected, will improve job opportunities long-term as more communities are better able to compete.

In fact, a report by Ball State's Digital Policy Institute found that as many as 200,000 jobs could be quickly created as a result of ARRP.

In order for the investment to be truly successful, the network extensions and upgrades created through the stimulus must then become sustaining. Extending the pipes to rural communities is useful immediately, but as the systems age, their value will decrease if they are not kept, quite literally, up to speed.

Yesterday's high speed is today unacceptable, and the expanded networks need to be able to upgrade.

Rural communities can maintain telecommunications networks if it is profitable to do so, and there will be no shortage of commercial providers if there is profit to be made.

What has happened in much of rural America, however, is that the largest potential customers (and thus financial supporters) have built their own networks, removing their traffic (and dollars) from the potential pool for providers. In some states, there are government-owned networks for providing distance education, telemedicine, and telephone and Internet services for government offices.

In a rural community, the biggest users of broadband are likely to be the schools, libraries, hospitals and government offices. Putting those users on private networks is a real disincentive to any commercial provider that might otherwise come in and offer service: the biggest potential clients will never buy your product.

Sustainability requires that all potential broadband users pay into the system. Even small rural communities have the potential to generate enough revenue if all potential users participate. At Ball State, DPI has conducted research in cooperation with rural cable and telephone companies. We found that rural broadband continues to expand.

What threatens the system is the creation of specialized networks, usable only by certain types of users. This would siphon off some of the best possible support for rural telecommunications.

Ironically, applicants for broadband stimulus funds can propose precisely that. While the RUS and NTIA promote the importance of partnerships between public and private interests, the ability to create connections between the anchor institutions (i.e. heavy users) could exclude others in rural communities. Rural communities are best served by aggregating all users on shared networks. It's both fair and efficient.

Dom Caristi is an associate professor of telecommunications and a member of the Ball State University's Digital Policy Institute, which was formed in 2004 in order to conduct research and on issues relevant to digital media. DPI's research is part of Ball State's Emerging Media Initiative, a planned $17.7 million investment focusing the university's historic strengths in this area to accelerate benefits to Indiana and give students innovative and entrepreneurial opportunities. The opinion expressed in this column is the writer's and not necessarily that of The Times.

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