Wednesday, November 06, 2013

Reduction in federal funding might make broadband expansion more difficult in rural areas

During a Senate hearing Oct. 29, Internet stakeholders said the government needs to continue promoting broadband adoption "among low income citizens, the elderly and populations situated in remote geographic locations," Bryce Baschuk writes for Bloomberg BNA. 

Roger Wicker of Mississippi, top Republican on the Communications Subcommittee of the Commerce Committee, expressed concern about Federal Communications Commission data showing broadband adoption rates in rural areas were much lower than in urban areas, a phenomenon he attributed to "lack of 'digital literacy,' questions regarding the relevancy of broadband in their lives and the cost of equipment and services," Baschuk reports.

Former Sen. John Sununu Jr., honorary co-chair of Broadband for America, expressed the importance of teaching people why and how to use broadband and promoted a "light-touch regulatory approach" and retention of the moratorium on taxing Internet transactions, Baschuk reports. Sununu asaid the E-Rate program, which was authorized in 1996 and provides the nations education facilities with broadband, has lost its focus. He said E-Rate needs to solve broadband access problems due resulting from economic or geographic factors.

Citizens in rural areas in Nebraska may lose access to high-quality broadband service unless the state coughs up money to offset a reduction in federal funding," Andrew Ward writes for the Omaha World-Herald. Eric Carstenson, president of the Nebraska Telecommunications Association, said, "New federal regulations will reduce federal subsidies for broadband Internet services—such as cable, fiber optic or DSL—in many areas outside towns and cities, leaving rural residents with less-reliable options."

Former FCC commissioner Harold Furchtgott-Roth told Ward the federal government's "high-cost Universal Service Fund is plagued with uncertainty and can't be counted on to provide support in the future," Grant Schulte writes for The Associated Press. Last year the state received $86 million from the fund but will likely only receive $80 million this year.

Carriers have to spend more in rural areas because they have to cover a large area that may only include a small group of paying customers. Michael Balhoff, a consultant from Maryland, "told the legislature's Transportation and Telecommunications Committee that without the subsidy, some remote areas would turn into an 'economic wasteland' with little or more expensive service," Schulte writes. Balhoff also predicted that risk for the shutdown of small carriers with increase through 2020.

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