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High-speed Net finds way to small-town USA
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Rural America, starved for high-speed Internet access, is getting more help to get more wired.
By Jim Hopkins, USA TODAY
Rural communities didn’t get much of the billions invested in high-speed Internet networks during the telecom boom. That’s because such networks are costly, and companies stand a better chance of making money from them in more populated areas. As a result, less than 5% of towns with fewer than 10,000 residents have a common form of high-speed access, digital subscriber lines, vs. 56% of cities with more than 100,000 residents, government figures show.
For rural areas — home to 62 million people — that makes it tougher to attract and keep companies, says Damian Kunko, CEO of the Rural Broadband Coalition trade group. That may change because of:
* Government help. The U.S. Agriculture Department last week announced its first big rural broadband effort — a $1.5 billion loan program to encourage high-speed start-ups. Such efforts hastened the spread of electricity and phone service to rural areas. The broadband program has already attracted interest among dozens of entrepreneurs, the department says. The idea is that, with subsidized loans, companies can make the economics of rural broadband work. The loans charge interest rates near 5% — about three points below market. A pilot rural broadband loan program in 2001, with $180 million, drew 61 applications totaling $500 million.
Lawmakers are also getting involved. Sen. John McCain, R-Ariz., who last month became chairman of the influential Senate Commerce Committee, is making wider high-speed deployment a priority.
* Private enterprise. Star venture capital firm Kleiner Perkins Caufield & Byers, whose investments include Amazon.com, was one of five investors in December who pumped $156 million into WildBlue Communications, a Denver start-up that’s targeting rural areas for high-speed access.
Rural start-ups, which buy broadband capacity from large telecoms, say they can make money where big players have not because they aim for lower profit margins. Also, they use less-expensive technology that might offer fewer features but still hasten the flow of data. Mount Vernon Net, with almost $1 million in annual revenue, has been profitable from its 1997 start. John Scrivner, co-founder of the 3,400-subscriber service in southern Illinois, hopes soon to expand to nearby Bluford, with 785 residents.
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