Will Technology Trickle Down to Rural America?

A NetAction Report


Cable Modem

Cable television originated in 1948 as a service to households in mountainous or geographically remote areas where reception of over-the-air television signals was poor. Antennas were erected on mountain tops or other high points, and homes were wired and connected to these towers to receive the broadcast signals.[21] It is unfortunate today that cable hasn't so far been leveraged to provide Internet access in the very areas where it was born.

According to a report from the US Department of Commerce and other entities (April 2000),[22] cable television service providers are generally unwilling to extend their cables into rural areas where the subscriber density is less than 10 per mile. NTIA spoke to approximately two dozen small cable companies serving 1,000 customers or fewer about the deployment of broadband over their cable systems. Approximately half of the companies currently offer, or plan to offer, cable modem service to small towns, some of which would likely be rural. These companies reiterated that, because cable service is more economical where there is a higher density of customers, it is unlikely that they will build out to isolated customers in the rural countryside. The NTIA report also states that current practice in the cable industry is to provide broadband from a node passing between 500 to 1000 homes (350 to 700 customers) with the expectation that only a fraction of customers will take the service.

The deployment of coaxial cable is fairly high with the NTIA estimating that between 81% to 97% of Americans have access to cable TV. To utilize this coaxial cable for two-way Internet access, cable companies are required to invest in the installation of equipment that allows for downstream as well as upstream traffic. As mentioned earlier this makes investing in smaller communities economically not viable for cable TV companies.

Mid-sized communities, however, can make use of cable for net access through turnkey solutions where a larger service provider farms out equipment to small cable TV companies who want to upgrade their network for net access. For example, Softnet's ISP Channel offers data services in such towns as Atchison, Kansas; Kennebunk, Maine; Lake Travis, Texas; and Bonneville, Mississippi. While these towns do not fall under our definition of rural, they are certainly smaller than the large metropolitan areas where cable modem service first appeared. Another example is @Home Solutions, which specializes in supplying Internet access capabilities on a turn-key basis to small and mid-sized cable system operators, many of whom serve primarily rural areas. @Home Solutions has signed an agreement that will provide turnkey service and financial support to Falcon Communications, Inc., the nation's largest rural cable system operator.[23]

While cable is good for small towns it is not the answer for scattered rural communities for the following reasons:

Upgrading a cable system for two-way broadband service requires substantial financial investment. It has been estimated that the cable industry will expend $21 billion to upgrade their systems to reach roughly one half of the homes passed in the United States and an additional $31 billion to upgrade their systems to reach all homes passed (NTIA p 15). Even cable companies that utilize turnkey systems will not find it feasible to run cable lines to places with a population below 1,000 (9,993 towns in the table below).

With the arrival of direct broadcast satellite for television, it is even less likely that cable systems will extend further into the countryside.

Cable, however, can be used to provide unidirectional net access. In such a situation downstream traffic is carried via the cable TV's coaxial cable and the upstream traffic can be carried via regular phone lines. SoftNet, for example, allows cable systems to offer Internet access at up to 1.5 Mbps downstream, with the return channel being provided on a telephone dial-up system.[24]

Selwynn identifies a third more innovative means of providing unidirectional Internet access via coaxial cable. InterTech corporation provides downstream access via coaxial cable and upstream access via satellite. Upstream traffic is routed via a VSAT in conjunction with HTTP/Proxy servers at the head-end. This provides much faster speeds, and often even exceeds those offered by a conventional, dedicated T1 circuit.[25]

Source: http://www.intertech.net.

Digital Set Top Boxes

The "idiot box" is finally attaining maturity with the onset of interactive television. Using a set-top box, keyboard and enhanced remote control, an essentially one-way medium has been converted into one that enjoys the power of interactivity. Set-top boxes come in varying flavors, depending on the level of service. Some merely enable users to use their current analog television sets to decode digital broadcasts. An Internet enabled set-top box enables a television set to interface with the Internet. It contains a Web browser (in other words a Hypertext Transfer Protocol client) and the Internet's main program, TCP/IP. The service to which the set-top box is attached may be through a telephone line as, for example, with WebTV, or through a cable TV company.[26]

Microsoft-owned WebTV Networks, Inc provides Internet access via the television. Users connecting to the WebTV network would require an Internet Receiver, (a set top box), a phone line, and any television set. The costs are $99 for the Internet Receiver and $21.95/month for WebTV Classic service.

Downstream traffic is carried via coaxial cable and upstream traffic via regular phone lines. Users have to dial into the local WebTV access number. In case WebTV does not have a local number to dial into users can dial into their local ISP's number. WebTV charges are then $11.95 per month. Users would have to pay this fee in addition to the per month charge of the local ISP.

The following is a hypothetical situation for a user interested in using WebTV in a small rural community, Libby, Montana, where WebTV does not provide a local number to dial into. The local community based ISP is KooteNet. KooteNet charges $16/month or $168/year. This would bring the monthly cost of using WebTV to $28 ($312/year).

A monthly fee of $28 is in itself fairly high. The disadvantage of interactive TV is that it becomes unaffordable for those who do not have a local ISP. As recently as 1994 Lincoln County (where Libby is located) still had about 800 four-party lines and also did not have an ISP with a local dial-up number. KooteNet was born with the help of a $25,000 loan from the Lincoln County Commission. Within four months of its being in operation, it had 120 subscribers and was able to pay back this amount. Regulation at the State level has generally stressed the need to allow local exchange customers to access an internet provider by making a local call.[27] Recent studies show that a very large percentage of households can dial into a local number to reach an ISP.

A federal technology literacy grant has enabled the use of set-top boxes for Internet access for giving fourth- and fifth-grade students of San Jose's Cesar Chavez Elementary School a chance to surf the Web on their television sets. The program gives school children from low income families access to the Internet using a television, phone line, set top boxes and wireless keyboards distributed free of cost by the school. Neon Technology, an Internet appliance company, donated many of the digital set-top boxes.[28]

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