Reaching the most remote rural customers with high-speed Internet access can be prohibitively expensive. Consider the case of Hill Country Telephone Cooperative in Ingram, Tex. The small provider is undertaking a $57 million effort to install fiber and bring broadband service to a substantial part of its market, which covers 2,900 square miles, roughly twice the size of Rhode Island. Yet even with this effort, the provider will not be able to serve 543 remote households, about 5% of its market area, because it's simply too expensive. To do so would involve laying 522 miles of fiber optic cable at a cost of $20 million—an average cost of $37,000 per subscriber, according to Delbert Wilson, general manager of the provider, who testified in July before the House Agriculture Committee.
Government agencies are now considering the costs of providing high-speed Internet access to rural areas and which technologies might be the most cost-effective. The economic stimulus legislation has set aside $7.2 billion in grants and loans to encourage the installation of broadband networks, especially in rural regions that currently lack access. The applications for the first round of funding are due on Aug. 14. The Agriculture Dept.'s Rural Utilities Service and the Commerce Dept.'s National Telecommunications Information Administration will be vetting those submissions.
Service providers are expected to propose a range of schemes to deliver high-speed Internet through both existing infrastructure — such as telephone lines, cable-TV networks, or electric power lines — and through the installation of new fiber-optic cables going directly to residences, new wireless networks, or by using satellites. While the Federal Communications Commission has remained neutral on which technology is best for rural markets, it did say in a May report on rural broadband that it needed to be cost-effective to install, provide consistent performance at an affordable price, and be able to upgrade to higher speeds over time.
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