The rural space-time continuum

Somewhere out there in the long, dark shadow of the healthcare reform debate, broadband reform for rural markets may be dying a slow death. I will admit right away that this is probably on over-statement made for some dramatic effect, as broadband stimulus and a national broadband plan being developed by the Federal Communications Commission surely will have some positive effect on the overall state of U.S. broadband coverage. However, many rural markets remain stuck in a sort of space-time continuum (or is it a time warp?) in which they want broadband, but expect to get it from a Ma Bell-type of company that either no longer exists, or continues to exist but is no longer interested in them (if it ever was).

Case in point: Regulators in New England are fed up with FairPoint Communications, and rightly so, after all of the network transition and customer service problems that have experienced (and now, accusations of deception). Some regulators are so fed up, they want to get rid of FairPoint by (as near as I can tell) de-certifying the company's ability to operate locally. What's not clear is who would take FairPoint's place if that were to happen. Throughout the nine-month debacle of a transition, it has never appeared that alternative carriers have tried to leverage the situation to their benefit. There are lots of options for dial-tone now, so perhaps wireless, VoIP, cable TV and satellite TV providers have all benefitted in some way, but what the regulators are looking for is an "incumbent phone company." Their options in that regard may remain FairPoint and... FairPoint. Verizon isn't coming back, folks.

I'm not saying everyone should put up with FairPoint, but rural regulators and customers need to either gain a sense of realism about the current telecom service environment, or else come up with a better plan-perhaps a way to woo a nearby cable TV company and new wireless venture of some kind to become a larger, more active player in the region through tax incentives or something. I don't know if this sort of option is even realistic, but also don't know what another Plan B is for the FairPoint markets. I don't believe that anyone has a Plan B.

Another case in point: The Montana Public Service Commission recently tried to get ILEC Qwest Communications to reconsider its decision not to apply for broadband stimulus funding that might help rural markets. The Montana PSC found it "mind-boggling" that Qwest didn't recognize the rural opportunity. Mind-boggling? It's actually pretty simple and boils down to two things: 1) Qwest likely doesn't want federal money with Net neutrality and other strings attached, and 2) Qwest might not feel that rural markets actually do present a strong enough revenue/profit opportunity.

Whether rural markets can pay off or how is unclear to many carriers. Many small telcos have thrived, relatively speaking for decades (more than 100 years in several cases) as the sole providers in rural markets, but other companies, usually larger ones, have failed to craft rural market business plans that contribute enough to the bottom-line promises that they have made to investors. Sean Buckley made the case earlier this week that remote management of a greater array of home network capabilities could be the key to creating more value at the household end of the broadband connection. That could very well be the case, and we need to see large telcos test that theory somewhere else besides suburban subdivisions.

In any case, the Montana PSC's plea shows that the agency is living in another time (perhaps the era of U.S. West?) It should be pleading its stimulus case with other competitive regional providers or maybe satellite companies that might be able to better cover their portion of the Great Plains.

What does healthcare reform have to do with all this? Nothing really, but it's obvious that not many people outside of rural markets share the concern of rural regulators and customers. They are, for now at least, and until they decide to start paying attention again, frying bigger fish. The rural user, meanwhile, remains a small fish in his own small pond, and perhaps is unaware of the careless world above the water's surface.

-Dan

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