Benton Research Fellow Christopher Ali Shares Broadband Lessons Learned: Large Telecom Has Failed Rural America

As he was researching an upcoming book on rural broadband policy — including reviewing every comment filed with the Federal Communications Commission or the US Department of Agriculture about the 2009 broadband stimulus program, the Broadband Opportunity Council or the USDA E-Connectivity program — Professor Christopher Ali of the University of Virginia realized that he “needed to humanize” the research. Thus began a 4,000-mile rural road trip, in which Ali visited rural broadband providers, state broadband officials and other stakeholders based largely in the Midwest.

In comparing what he hears today with what people have told the FCC and USDA in the past, Ali said, “the conversation hasn’t changed at all.” We still hear that rural areas need broadband and people are “frustrated” because “large telecom is gobbling up the subsidies,” he said. By “large telecom,” Ali means the nation’s price cap carriers. Those carriers were offered a right of first refusal on Connect America Fund (CAF) subsidies to bring broadband to unserved areas of their local service territories and received the bulk of those subsidies but, in large part, deployed only the minimum speed required. Yet, when subsidies for areas where the price cap carriers turned down CAF funding were awarded through a reverse auction, a large amount of the funding went to competitors that offered to deploy speeds of 100 Mbps or even a gigabit for less money than the incumbent price cap carrier was offered to deploy slower service. Ali noted that smaller rate of return carriers generally have treated FCC speed targets as a “floor” rather than a “ceiling” and have generally deployed faster speeds in comparison with the price cap carriers. Of the price cap carriers, Ali said, “We trusted them, they failed, and they don’t deserve our trust anymore.”

What are Ali’s rural broadband policy recommendations? Although he believes FCC and USDA funding programs, collectively, have enough money to cover the cost of bringing broadband to rural America, he argues that the money should be spent “more democratically and intelligently.” He argues that a single agency should be responsible for broadband funding, and that agency should be USDA because it has a greater presence in rural America and its field staff can help explain the funding process to would-be applicants. “We need to empower new entrants,” said Ali, who argued that states shouldn’t pass laws to prevent municipalities and cooperatives deploying broadband. Asked about what the broadband speed target should be, Ali said “100/100 would be amazing” and noted that this is the target that the state of MN has used successfully.

[Dr. Christopher Ali is a Faculty Research Fellow at the Benton Insitute for Broadband & Society]