GETTING CONNECTED
Internet firms weigh options for rural areas
Underground high-speed Internet lines crisscross downtown streets and apartment complexes, but they are scarce along country roads and farm fields.
There’s a reason for the distinction: money. Installing broadband networks can cost millions of dollars, and technology experts say Internet providers are reluctant to invest in wiring an area unless it has enough potential customers to cover the cost. That can leave rural residents hanging because they need broadband service to access everything from online college courses to their bank balances.
Fiber-optic cable manufacturer OFS will discuss how telephone companies can better serve rural areas during the Midwest Telecom Expo at Grand Wayne Center this week. The event gives telecommunications workers a chance to learn about the industry’s evolving technology. More than 600 people are expected to attend, said John Koppin, president of the Indiana Telecommunications Association, an event sponsor.
The cost of extending fiber-optic cables – lines with enough capacity to carry Internet, phone and TV signals at high speeds – to communities is falling, said Guy Swindell, OFS’ manager of field applications for eastern North America. As companies such as Verizon Communications Inc. invest in building fiber-optic lines to homes and businesses in northeast Indiana and other regions, fiber-optic network equipment prices are dropping. That could make it more affordable for Internet providers to extend fiber-optic networks to rural areas, he said.
Industry estimates indicate the cost of installing fiber-optic lines can range from $40,000 to $70,000 a mile, Koppin said.
Declining equipment costs have allowed some Internet providers to bring broadband service to towns with as few as 1,000 or 2,000 people, said Dom Caristi, an associate professor of telecommunications at Ball State University. When they spend less on equipment, he said, providers can afford to wire markets with fewer people.
“It makes it more logical to go into areas that are not as urban,” Caristi said.
Some local companies already are building fiber-optic networks in small cities and towns. AdamsWells Telecom expects to invest about $9 million to finish installing fiber-optic lines to Bluffton homes and businesses, general manager Lee VonGunten said. The company already has spent about $2 million to wire more than 1,000 houses and businesses north of Indiana 124.
It’s quite an expense to serve a city with fewer than 10,000 residents, and the project will likely take three more years. But VonGunten said taking the leap made sense for AdamsWells Telecom, a spin-off of the small telephone company serving Craigville, a town along the border between Adams and Wells counties. Some consumers are dropping landline phones and relying only on cell phones, but many still want the high-speed Internet and cable TV services that fiber-optic lines can provide.
“Really, it boils down to surviving as a company,” he said. “We needed to move out of our comfort zone.”
Fiber-optic lines have practically unlimited capacity to carry technology such as high-definition TV channels and large Internet files, making the service more attractive, VonGunten said. The lines have been used for years to carry signals long distances, but more companies now are running them to doorsteps.
Verizon initially invested $75 million and has continued to spend undisclosed sums to wire sections of Fort Wayne, New Haven and Huntertown with fiber-optic lines. More than 120,000 area homes have access to the service, spokesman Lee Gierczynski said. The company expects to spend $23 billion to deploy fiber-optic lines to markets in 16 states by 2010, but the selected markets tend to be urban and suburban. So far, Gierczynski said Verizon has not announced plans to extend its fiber-optic service, FiOS, beyond Fort Wayne, New Haven and Huntertown to serve other parts of Indiana.
Providing any broadband service to rural markets is challenging, Gierczynski said. With wider distances between homes and businesses, Internet providers can’t realize the same economies of scale they would in a more populated area.
Fewer rural residents subscribe to high-speed Internet service, in part because the service isn’t available everywhere.
About 38 percent of rural Americans have broadband access at home, according to the Pew Internet & American Life Project’s annual broadband adoption study published in July. In contrast, 57 percent of urban residents and 60 percent of suburban residents have broadband connections at home.
Non-profit group Connected Nation Inc. wants to expand broadband Internet’s reach to unserved areas. The Washington, D.C.-based group maps areas to see where broadband is not available. Then Connected Nation helps community leaders document local demand for high-speed Internet service, said Kasey McCrary, the organization’s public affairs manager. The group has campaigned for additional service in Ohio, Kentucky and Tennessee and is mapping broadband availability in three other states.
Documenting broadband demand shows Internet providers how many potential customers they could gain by extending service to rural communities, McCrary said. Connected Nation helps providers design business plans to serve sparsely populated areas.
Verizon wants to offer high-speed Internet service to anyone who needs it, Gierczynski said. The company has extended DSL service, a slower option than fiber-optic Internet service, to St. Joe and Mentone during the past month.
The company will keep working with Connected Nation and other groups to bring services to rural areas, he said.
Many Internet providers share that philosophy, the Indiana Telecommunications Association’s Koppin said. That’s why the Midwest Telecom Expo will offer a session on how to design cost-effective broadband networks to serve rural areas.
“It is the desire of the industry to provide ubiquitous service so regardless of where you live, you have the best possible service,” he said.
jglenn@jg.net
