States bypass rural Internet obstacles- Bringing Web Speed to the Sticks

Although the number of Internet users in rural areas has been increasing steadily, barriers still hinder broadband deployment — namely high cost, low demand, a lack of awareness and infrastructure, and low return on investment.

BY Dibya Sarkar FCW.com

Several state governments have taken different approaches to overcoming such roadblocks, including offering tax incentives, low-interest loans and grants, as well as allowing local public-sector entities to enter the broadband business itself.

Earlier this year, Virginia lawmakers passed a law that permits local governments to offer telecommunications services to residents and businesses in rural areas where there are no competitive local exchange carriers, said Virginia House Delegate Joe May during a session at the National Conference of State Legislatures’ fall forum in Washington, D.C., Dec. 11-13.

In essence, localities, electric commissions or boards, and industrial or economic development authorities can provide "last mile" connections to high-speed data and Internet access service, but not cable service. The law allows underserved areas to get needed infrastructure sooner rather than later, May said, adding that the law has "checks and balances" to also allow private-sector competition at a later date.

So far, the state has approved the cities of Bristol and Danville to provide such service, while applications for the city of Martinsville and town of Front Royal are pending, he said. In addition, Virginia’s Center for Innovative Technology, a nonprofit group empowered to promote technology-based economic development, was charged with putting together a template on how to establish the service, he said.

South Dakota began planning for high-bandwidth deployment in 1996 by wiring K-12 schools, said state Sen. Royal McCracken. But the $100 million cost to wire 176 school districts was prohibitive. So Gov. Bill Janklow used state prison inmate labor for the installation, providing the inmates with marketable skills and significantly lowering the project’s overall cost to about $13 million, McCracken said.

He said Janklow also persuaded local telephone companies that it would be in their best interests to provide continuing service because once parents and children used the Internet in the schools, they would want it in their homes. "The connection is now there for businesses also," McCracken added.

The Internet was needed in the state, he said, as a way of attracting businesses from around the world as well as allowing established businesses in the state to compete.

Nationally, high-speed Internet connections — defined as speeds exceeding 200 kilobits/sec in both directions — increased 33 percent during the second half of 2001, to 12.8 million lines in service, according to Federal Communications Commission statistics provided by the National Association of Regulatory Utility Commissioners.

Citing National Telecommunications and Information Administration data, the National Association of Regulatory Utility Commissioners also reported that Internet use among rural households grew 24 percent on average annually from 1998 to 2001, and the percentage of Internet users in rural areas is 53 percent, almost even with the national average.

Minnesota state Sen. Steve Kelley said there is no digital divide in terms of access, but there is one in terms of price. On average, a rural school district in his state pays about $2,200 per month for a T1 line, while an urban counterpart pays only $300 to $400 per month.

One way to promote more broadband use is to bundle the service with "competitive video," he said, possibly referring to cable TV. Video thus becomes a way of subsidizing the broadband service’s usage.

http://www.fcw.com/geb/articles/2002/1216/web-rural-12-19-02.asp

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N.C. links Internet, economy

Every North Carolina resident will have high-speed access to the Internet by the end of 2003, according to an ambitious timetable set by a public/private organization.

BY Dibya Sarkar FCW.com

Led by the Rural Internet Access Authority, the e-NC initiative — started in 2000 following a state report that linked broadband deployment to the state’s future economic health — is targeting mostly rural counties where many economically distressed areas lie.

The deadline is reachable, representatives said. Previous national and state statistics showed that North Carolina homes — mostly in rural regions — were near the bottom in being connected to the Internet, but new statistics are encouraging.

More than a year ago, local dial-up service became available statewide. By the end of this year, 75 percent of residents will have some type of high-speed Internet access. And a new state survey shows that 52 percent had home Internet access in 2001, up from 36 percent in 1999.

Providing entrepreneurial and educational opportunities are prime reasons for the initiative, said James Leutze, chairman of the authority. In 2001, there were 63,000 layoffs in the manufacturing sector, and in January 2002, unemployment payments totaled about $135 million. But he also said entertainment, such as communication among family members, provides an added value.

Backed by reports, statistics and surveys, the initiative is pinpointing areas with the greatest need, plowing two-thirds of its investment into rural areas. (Of the state’s 100 counties, 85 are considered rural — and are home to half the state’s population.)

MCNC, a local nonprofit corporation based in Research Triangle Park, has contributed $30 million; the Commerce Department’s Technology Opportunities Program has contributed $700,000; the Appalachian Regional Commission has awarded $200,000; and 80 other organizations have given in-kind and cash support to the initiative.

The state is approaching the issue systematically, addressing supply, demand and content, said Leutze, who is chancellor of the University of North Carolina at Wilmington. But he emphasized that the initiative is fundamentally grass-roots, building commitment and participation among local leaders and governments to extol the benefits of the Internet and technology as well as drive local projects. The initiative has more than 2,800 volunteers statewide, providing expertise and training as well as hosting hundreds of forums about the issue.

Such a model, Leutze said, can be replicated nationwide and internationally.

Besides investing money into education, outreach and research, the initiative developed several mechanisms to increase Internet use among North Carolinians and businesses:

* Provided $8 million in incentive grants to private companies to lay down fiber or provide wireless satellite linkups.

* Opened or expanded more than 130 public access sites in 64 rural counties. A pilot with Kerr Drug, which operates 24-hour stores, will provide four sites where people can have round-the-clock access to the Internet.

* Created four "telecenters" in the most economically distressed areas to provide public access sites and Internet and computer training, and to help spur entrepreneurship among individuals. The initiative has plans to open four more.

* Conducted 25 e-workshops around the state for small-business owners.

* Provided 28 grants, totaling about $720,000 for free or low-cost digital literacy training focusing on the unemployed, disabled, elderly and non-English speakers.

* Established a Web site listing Internet service providers, research, surveys and other data that can be used by local governments and residents.

Jane Smith Patterson, the authority’s executive director, said there are also opportunities to develop infrastructure and technology programs with neighboring states — Tennessee, South Carolina, Virginia and Georgia — since many economically distressed North Carolina counties are near such borders.

But the e-NC’s representatives — who outlined the program during a Commerce Department media roundtable Nov. 18 — said it needs federal funds and encouragement to drive such interstate initiatives.

Undersecretary of Commerce Phillip Bond said the department has noted that "and tried to make some noise," but the law limits some cross-border opportunities, such as telemedicine. However the U.S. Agriculture Department’s Rural Utilities Service is providing $100 million in loans to provide broadband in rural, underserved areas, another Commerce official said.

http://www.fcw.com/geb/articles/2002/1118/web-nc-11-21-02.asp

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Idaho expands broadband

Eighty percent of the population in southern Idaho will have Internet broadband connectivity by year’s end, according to a representative from Syringa Networks, a consortium of a dozen independent telecommunications companies that is spearheading the initiative.

BY Dibya Sarkar FCW.com

The prospect of providing affordable high-speed Internet access for residents and businesses will greatly boost economic development, said Rick Gerrard, Syringa’s sales and marketing manager.

Although there are pockets of Digital Subscriber Line service in the region, the development of the $36 million network ñ an interconnected series of fiber-optic cable rings totaling 1,400 miles ñ will provide much better and faster connections, he said.

It will benefit populations from Boise to McCall, 90 miles to the north, and out to the eastern border toward St. Anthony. When completed, it could serve up to 150,000 people.

Early last year, the state legislature passed a 3-percent tax credit for companies investing in broadband technology to help provide additional equity for the project. The consortium also is getting financial assistance from a U.S. Department of Agriculture program that provides loans and loan guarantees for rural broadband deployment.

Nortel Networks has provided three multiservice switches ñ its Passport 15000-VSS product ñ said Errol Binda, a senior Nortel manager for product marketing. The advantage is these switches support multiple data applications and services and can be deployed on Asynchronous Transfer Mode (ATM), Frame Relay, IP, and Multiprotocol Label Switching (MPLS).

"It’s not only providing connectivity, but the key thing is the preservation of the qualities of service," he said, referring to a network’s performance. "What ATM as an infrastructure gives you Ö [is that it] ensures high quality connections for things like video and voice. Without that ATM layer, you don’t have the ability to efficiently use that."

Performance is important in a rural area, he said, especially as the potential and need for telemedicine and distance education applications increases.

Binda said Nortel, which is helping Syringa deploy the technology, will provide additional multiservice switches as the network is developed further.

http://www.fcw.com/geb/articles/2002/1104/web-idaho-11-08-02.asp

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Bringing Web Speed to the Sticks

Not everybody can get cable or DSL service. Here are two businesses that speed up Internet access for the rest of us.

By Rafe Needleman, Business 2.0

If you use the Web at all and have a few extra bucks a month to spare, you’d have to be crazy not to sign up for broadband. Speed is to the Web as color was to television; it adds a new dimension to the experience. But fast DSL or cable Internet connections aren’t available everywhere — there are tens of millions of dial-up-only households in the United States.

Steve Kirsch, CEO of the startup Propel, wants to come to their rescue. His company offers a paid service (about $5 a month) that accelerates dial-up Web browsing by aggressively compressing and caching images and webpages. There’s clearly a market for Propel, and it has many competitors, but like the Outlook plug-ins I recently covered, for end users it’s a grudge purchase: It enhances a service the user is already paying for, adding an extra fee just to make Net access tolerable. A cleaner business is Propel’s ISP Partner Program, through which access providers can resell the Propel service, and presumably bury the fees in their bills.

Propel is a cost-effective solution and clearly a good thing, but for real speed, there’s no substitute for bandwidth. For households without access to DSL or cable, there are "fixed wireless" radio technologies from companies like Navini and Soma Networks, and there’s also an odd startup out of Idealab that brings broadband into the home via optics. Omnilux uses laser transceivers mounted on residential rooftops to route high-speed network traffic. A house’s rooftop gizmo then sends Ethernet data to PCs via short-range Wi-Fi.

Only one of the houses in an Omnilux community needs a wired high-speed connection; the rest share it by zapping laser signals from rooftop to rooftop. Maximum reach of the Omnilux device is about a quarter of a mile, but each house’s router must be able to see another for the lasers to communicate. It’s an optical mesh network, something that hasn’t been tried as a consumer solution before. (For comparison’s sake, Terabeam uses similar "free-space optics" for getting high-speed data into office buildings.) The routers should cost about $300 per house and will probably be paid for by the ISPs. It remains to be seen whether broadband providers will be able to persuade enough homeowners in a neighborhood to install the Omnilux routers and make the model work.

FAST FACTS
Propel
http://www.propel.com

CEO
Steve Kirsch, founder of InfoSeek

HQ
San Jose

FOUNDED
1999

EMPLOYEES
40

FUNDING
$50 million in private funds

PROFITABLE?
Expected in "a couple of years"

MARKET
Internet acceleration

Propel and Omnilux couldn’t be more different technically, but both bring improved Web speed to places that don’t currently get it. It’s an understandable business, at least for now. There are still more potential customers who don’t have broadband access than those who do.