Access to fast Internet is spreading in the U.S., but about 19 million Americans can’t get it, according to a new government report out Tuesday. About 14.5 million of the 19 million people without broadband access live in rural areas, the report found.
Last year the FCC approved a six-year transfer process that transitions money from the Universal Service Fund to the new $4.5 billion a year Connect America Fund for broadband Internet expansion, effectively ending the USF High-Cost Fund by 2018. Over the next six years, the new Connect America Fund fund will bring broadband service to about 7 million of the 18 million U.S. residents who don’t have it.
The “high cost” USF fund was well named. The old system frequently paid multiple companies to provide service to the same areas. A region in Mississippi reportedly had 13 carriers receiving “high cost” cash, observes Ars Technica.
According to the report, about 14.5 million rural Americans — or 23.7% of 61 million people living in rural areas — had no broadband. In contrast, only 1.8% Americans living in non-rural areas — 4.5 million out of 254.9 million — had no broadband access.
The FCC categorizes “broadband” as 4 megabits per second or higher.
West Virginia had the least amount of access, with 45.9% of the state without broadband access. Montana (26.7%), South Dakota (21.1%) and Alaska (19.6%) followed. But the access issue for rural Americans wasn’t isolated to the states with few large cities. In California, more than 35% of rural residents couldn’t order a broadband account even if they wanted it.
Similarly, mobile broadband Internet services delivered by wireless carriers also continued to widen nationwide, but nearly 20 million Americans — or 6.2% of the total population — had no access, the report says.
The FCC launched the Connect America Fund last year when it made changes to the Universal Service Fund, which was established to deliver telephone connections to rural towns. The FCC’s Universal Service Fund is a line item on everyone’s phone bill that subsidizes rural and low-income phone service, among other things.
In July, the FCC announced it will make available $115 million to subsidize rural broadband. Companies that accept the $775 per household subsidies in the first phase of the Connect America Fund will be required to invest in and complete the work of building the network infrastructure within three years.
The FCC estimates about 400,000 residents in 37 states will gain access upon completion. FCC Chairman Julius Genachowski said the FCC’s goal is to make broadband available by 2020 to all 19 million Americans who lack access.
But rural broadband access has profoundly changed in the last year. Today, two different broadband satellite platforms, ViaSat and EchoStar, deliver broadband access in excess of 4 Mbps. In addition, Verizon has a new LTE service for rural users that delivers 4 Mbps or more by LTE.
Satellite and LTE broadband access for rural users cost between $50 to $120/month.
ViaSat, announced their 12 Mbps satellite internet service for $50/month. ViaSat, which operates the WildBlue, an earlier internet satellite service, says their Exede Satellite Internet Service will lower costs and speed service, especially for rural users.
Exede speeds and pricing start at $49.99 for the basic package. The only variation in packages will be the amount of data that can be downloaded/uploaded. The next package will offer 15GB of data and will cost $79.99. The most premier package will allow up to 25GB of data for $129.99.
ViaSat-1 has more capacity than the entire North American satellite fleet combined, including all the two-way Ka, C and Ku band satellites.
EchoStar XVII with JUPITER high-throughput technology was launched in July (pdf), and is now available for consumers.
Dish/EchoStar will offer similar speeds to ViaSat. Dish plans to officially announce pricing and start-up dates in the next few weeks. Dish and EchoStar were once a part of the same company, though they parted ways in January 2008. Now, they share the same chairman in Charlie Ergen.
Verizon’s rural Broadband service called HomeFusion, launched in six markets this March and is now available nationwide. It uses Verizon’s 700 MHz LTE network for the backhaul. Internal WiFi connects devices in the home.
Verizon’s HomeFusion LTE dome is installed outside the house (for $199.99). Using Wi-Fi, customers can connect up to 20 devices. Verizon says customers should expect downlink speeds of between 5Mbps and 12Mbps and uplink speeds ranging from 2Mbps to 5Mbps. Verizon says HomeFusion is an alternative to traditional residential broadband, especially for those without DSL or cable modem options.
Verizon’s plans include rates of $60 per month for 10GB of data, $90 per month for 20GB, or $120 per month for 30GB, with a $10 per GB penalty for each plan after reaching the cap.
If the monthly cost of satellite or rural LTE were subsidized by about 50% ($30/mo or $360/yr), then the $775 per household budget, required by the FCC, might cover two years of service and make rural broadband affordable today.
Investing in infrastructure is a longer term solution. Options might include:
- White Spaces utilizing unused television frequencies. Carlson Wireless is experimenting with the technology today.
- Allowing providers to test an LTE service in the 1755-1780 MHz band that would share spectrum with federal users, might be one solution.
- Utilizing the UHF T-band at 450 MHz might be another solution. It won’t be available for nearly 10 years but its penetration would be superior to other frequencies.
Obviously, the Universal Service Fund needed fixing. The FCC’s Connect America program may be a step in the right direction.
Cheaper, faster, better urban broadband might be enabled with inexpensive microcells on streetlights. Municipal fiber generates revenue. Advertisers pick up the tab. Everyone wins.
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