Rural rollout of broadband running out of gas because profits shrink far from cities, expert says

“Are rural Americans doomed to second-rate broadband services?” asks Robert Mitchell, a national correspondent for Computerworld. The magazine says the answer is yes -- because it's too expensive for publicly held communications firms that maximize profit to please Wall Street. Sound familiar, newspapers?

Less than a third of rural American homes have high-speed Internet, while half in metropolitan areas do, according to the latest survey from the Pew Internet and American Life Project. Only 31 percent of rural homes have broadband, while 52 percent in urban areas and 49 percent in suburbs do. Rural households are gaining on their metro counterparts, but slowly. "Between 2006 and 2007, high-speed Internet usage among rural adults grew by 24 percent, versus 18 percent for urban residents and just 7 percent for suburbanites," Pew's report said. "Broadband penetration among rural residents in early 2007 is now roughly equal to broadband penetration among urban/suburban residents in early 2005." (Read the report)

Pew focuses on demographics, Mitchell reports, “because accurate estimates of broadband deployment are simply not available from the cable and telecommunications companies -- and because the center's studies are too small to paint a complete picture with regard to availability. . . . Most of the ‘low-hanging fruit’ has already been picked in terms of providing access to the most profitable, easy-to-reach customers. While demographics may play a role in the slowdown in broadband penetration, the situation may be that many people in the country simply can't get broadband, whether they want it or not." (Read more)

In an earlier piece, Mitchell said Verizon's sale of rural lines in Maine, New Hampshire and Vermont to “tiny” FairPoint Communications “is part of a broad strategy to shed less profitable business in rural areas while retaining business in higher density metropolitan areas, where the return per mile of fiber-optic cable is highest. . . . Today, most rural New England customers can't even get basic DSL. But even if FairPoint does offer broadband to more rural customers . . . will it be yesterday's technology, while the rest of the world moves to multi-megabit speeds capable of supporting multimedia video and audio streams?”

Again, Mitchell says yes. “The telephone network is slowly disappearing into the Internet,” he writes. “While universal access for telephone service is still a reality, there is no such entitlement for rural Americans when it comes to broadband. Unless an investment is made, most of them will remain in maintenance mode on the outdated . . . infrastructure.” Governments' role in providing broadband is limited by lack of money, and state laws -- passed after heavy lobbying by telecom firms -- to limit or block publicly provided broadband.