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Rural Broadband Dying

The New York Times has a feature story today on the pathetic state of rural broadband:

Bill and Ursula Johnson are among the unwanted. These dairy farmers in bucolic northeastern Vermont wake up before dawn not just to milk their cows, but to log on to the Internet, too.
Their dial-up connection is so pokey that the only time they can reliably get onto the Web site of the company that handles their payroll is at 4 in the morning, when it is less busy. Mr. Johnson doubles as state representative for the area, and he doesn’t even bother logging on to deal with that. He communicates with colleagues in Montpelier, the capital, by phone and post instead.
The Johnsons’ communication agony could soon get worse. Instead of upgrading them to high-speed Internet access, Verizon, their local phone company, is looking to sell the 1.6 million local phone lines it controls in Vermont, New Hampshire and Maine. The possible sale is part of an internal plan called Project Nor’easter, according to a person with knowledge of the details.
Verizon is not alone in its desire to reduce the number of landlines it owns. Big phone and cable companies are reluctant to upgrade and expand their networks in sparsely populated places where there are not enough customers to justify the investment. Instead, they are funneling billions of dollars into projects in cities and suburbs where the prospects for a decent return are higher.
The United States already lags behind much of the industrialized world in broadband access.
Rural phone lines can be profitable because the basic infrastructure was paid for years ago, there are often few competitors and subsidies from the Universal Service Fund, which helps carriers provide service to hard-to-reach consumers, can be substantial.
But the subsidies do not benefit all carriers equally. For example, Vermont Telecom, which has 21,000 phone lines in the state, will receive $24.34 a month per line in the fourth quarter from the fund, money that is credited to customers on their bills.
But as a larger carrier, Verizon will receive one-tenth the subsidy, or $2.42 per phone line. Any company that buys Verizon’s lines will inherit the same subsidies, making such a deal a less attractive investment.

The goals of Universal Service Fund, as mandated by the 1996 Act, are to promote the availability of quality services at just, reasonable, and affordable rates; increase access to advanced telecommunications services throughout the Nation; advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas.

The FCC says funding for rural telephone service is drying up (pdf). Fewer people are paying into the Universal Service Fund as land lines are dropped for wireless phones and VoIP. To counter the estimated $350 million shortfall that move created, the FCC ruled VoIP providers must now pay into the fund.

New York Attorney General Eliot Spitzer, a gubernatorial candidate, has his own plan to provide affordable broadband to all citizens of the Empire State.

If elected, Spitzer would contract with companies in the private sector to provide high-speed Internet service at affordable rates.

The private company or companies would pay for the necessary infrastructure and agree to sell the service at low rates, in exchange for being the sole provider over that infrastructure for several years.

A Navini Network will cover the entire state of Rhode Island. The $20 million border-to-border wireless network would allow collaboration between industry, and the public and private sectors. Users would include government agencies, businesses, and education institutions. It is not planned to provide network access for individual consumer usage.

IBAX Group, Navini’s long time exclusive partner in Italy, plans to launch and expand municipal and resort networks as well as build out a nation-wide network using Navini gear.

Navini’s antennas form individual, independent signal beams optimized for a customer’s location, distance and QoS. With 80 simultaneous beams, this capability can be shared across a great many customers on each site.

“The market is clearly ahead of the standard,” said Roger Dorf, president and CEO of Navini Networks. “Our new platform represents our third generation of Personal Broadband base stations, leading the industry in delivering the best overall CAPEX and OPEX.”

M2Z, a company funded by venture capitalists, has their own plan — free nationwide broadband wireless network. M2Z wants to use the simplex part of the AWS spectrum (from 2155Mhz to 2175 Mhz).

M2Z says their proposal solves the Universal Service Fund dilema. It would be free (with ads) or $20/month for faster access without advertising. In lieu of an auction, and in exchange for exclusivity, M2Z would give the Treasury 5% off the top.

M2Z argues the 20 MHz of bandwidth would lay fallow for years since they’re not paired with other airwaves. M2Z, which stands for “Move the cost of data transport to Zero,” has filed a 127-page proposal (PDF). It might also dovetail nicely with MVP’s satellite/cellular repeaters and Modeo’s DVB-H mobile television, which also use the 1.7GHz band. Triple play.

The FCC has decided that “free” nationwide broadband wireless (and exclusive use) is not an idea whose time has come. The FCC took the 20 MHz frequency block off the AWS auction table.

A co-founder of Nextel, through Cyren Call Communications, urged the FCC to establish a Public Safety Broadband Trust to hold the license for a key segment of spectrum in the 700 MHz band in a filing to the FCC.

They want to move spectrum that was previously allocated strictly for commercial use into shared public safety and commercial usage. Cyren Call says their proposal would enable a workable, self-sustaining business model for public safety communications.

Now Verizon Wireless has joined the fray, pitching a plan to build a nationwide broadband public-safety network in the 700 MHz band, reports RCR News.

The Verizon Wireless plan envisions using 12 of the 24 megahertz set aside for public safety to build a nationwide public-safety broadband network. Verizon Wireless would augment its existing infrastructure as necessary to give public-safety the coverage it needs and then would extract rent from public-safety agencies across the country to use that infrastructure. The spectrum, however, would not be shared with Verizon Wireless’ commercial customers. The Verizon Wireless plan is similar to one proposed by Cyren Call Communications.

The Cyren Call plan has been supported by public-safety advocates while the commercial wireless industry and some lawmakers are skeptical of dual-use on commercial frequencies.

Cyren Call says they can use 700 Mhz more efficiently and provide national broadband coverage. M2Z says they can provide broadband voice and data nationwide at 2.1 GHz. Free.