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By Robert Bell, John Jung, Louis Zacharilla: Intelligent Communities are those which have - whether through crisis or foresight - come to understand the enormous challenges of the Broadband Economy, and have taken conscious steps to create an economy capable of prospering in it. They are not necessarily big cities or famous technology hubs. They are located in developing nations as well as industrialized ones, suburbs as well as cities, the hinterland as well as the coast.

The Challenge and Promise of Rural Broadband

August 29, 2011 By

Here we sit in the New York metropolitan area waiting for the arrival of an uninvited guest.  As I write, Hurricane Irene has made landfall in the state of North Carolina.  The meteorologists say that the eye of the hurricane will pass within about 30 miles of my home sometime tonight.  We have battened down as well as we can, but I find it unnerving to prepare for something I don’t really understand:  I have been through big wind and rain before but a hurricane with its own category number may be an entirely different matter. 

One thing is almost certain: we will lose electricity and, with it, our broadband connection to the world.  I can only hope the loss is brief.  Once you are used to a multi-megabit connection to the Web, your habits tend to converge on it.  I work remotely on many days.  I rely on the Web for news and weather.  I abandoned my cable TV subscription a few months ago because I found I was downloading all the video I wanted to see.

Access to broadband in metropolitan areas like mine is pretty good around the world.  It is rural areas – where half of the world’s people still live – that continue to face a broadband challenge.  Because of distance and low density, these are challenging places for a private-sector communications company to make money.  In work with rural communities, I have learned that a given region may have 3 to 5 broadband carriers, which sounds like effective competition.  But the reality is that each carves out a service area with little or no overlap.  Demand is just not sufficient to reward head-to-head competition.  What competition there is comes from satellite, but high prices and limited bandwidth have given it a bad reputation. 

The irony is that rural areas stand to benefit from broadband so much more than urban ones.  Distance and isolation are the negatives of rural life, with impacts on health, education, employment, consumer choice and the prices people pay.  Services delivered over broadband – from telemedicine and distance learning to online retailing – have the potential to erase those negatives while preserving the quality of life that rural residents treasure. 

What to do?  National strategies – from CAP in Canada to Broadband Stimulus in the US and EU, and the NBN in Australia – subsidize the construction of rural infrastructure.  The Chinese community of Tianjin has done the same.  Rural electric utilities, often owned by municipalities, have a good track record at overbuilding their electric grids with broadband.  In Chattanooga, Tennessee, the municipally-owned Electric Power Board has deployed a broadband network as part of its smart grid program not only within the city limits but to parts of seven surrounding counties.  Bristol, Virginia’s utility has deployed fiber deep into surrounding counties, where it has spurred the development of new businesses and enabled major employers to remain in Bristol. 

The market may yet yield a solution.  A new generation of satellites is now entering service (Spaceway 3 and ViaSat-1 over the US and KA-SAT and Hylas over Europe) that will offer 10 times the capacity of the previous generation at one-half to one-third of the cost per subscriber.  Together, about $5 billion is being invested by satellite companies specifically to deliver broadband.  A system called O3B (for the Other Three Billion) even aims to expand broadband access in developing nations, where 70% of the world’s population has never connected to the Internet at any speed. 

As investments in rural broadband take hold, there will be luxury to worry about the next problem.  This was articulated for me by Wes Rosenbaum, CEO of Bristol Virginia Utilities (BVU), who explained in 2009 that his company was already pushing up against the capacity of what is called the “middle mile.”  Local Internet Service Providers like BVU need to connect their customers to the major Internet peering points where the world’s communications carriers exchange Internet traffic.  Like most ISPs, BVU could never afford its own connection to a distant peering point, so it pays another carrier to bridge the gap.  Rural markets have generated little Internet traffic in the past, so the middle-mile carriers have sized their networks accordingly.  When all-fiber carriers like BVU serve Fortune 1000 companies in their service areas, the “skinny” middle mile becomes a bottleneck. 

A decade ago, the world’s Internet traffic was very lopsided.  Most Internet content was located in the US, so for every bit entering the US, hundreds or thousands of bits flowed out, carrying that content around the world.  I suspect that Internet traffic between urban and rural areas today looks like international traffic looked a decade ago.  As rural connectivity advances, communications carriers will need to prepare for something they have not experienced before: an Internet “hurricane” that blows in all directions at once.


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Comments

PhilT    |    Commented September 2, 2011

Chattanooga is a seriously expensive project, both in terms of retail price point and cost per household connected. Is it really an example to follow ?


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Intelligent Communities

About the Intelligent Community Forum
The Intelligent Community Forum is a think tank that studies the economic and social development of the 21st Century community. Whether in industrialized or developing nations, communities are challenged to create prosperity, stability and cultural meaning in a world where jobs, investment and knowledge increasingly depend on advances in communications. For the 21st Century community, connectivity is a double-edge sword: threatening established ways of life on the one hand, and offering powerful new tools to build prosperous, inclusive and sustainable economies on the other. ICF seeks to share the best practices of the world's Intelligent Communities in adapting to the demands of the Broadband Economy, in order to help communities everywhere find sustainable renewal and growth. More information can be found at www.intelligentcommunity.org.

Robert Bell
Robert Bell is co-founder of the Intelligent Community Forum, where he heads its research and content development activities. He is the author of ICF's pioneering study, Benchmarking the Intelligent Community, the annual Top Seven Intelligent Communities of the Year white papers and other research reports issued by the Forum, and of Broadband Economies: Creating the Community of the 21st Century. Mr. Bell has also authored articles in The Municipal Journal of Telecommunications Policy, IEDC Journal, Telecommunications, Asia-Pacific Satellite and Asian Communications; and has appeared in segments of ABC World News and The Discovery Channel. A frequent keynote speaker and moderator at municipal and telecom industry events, he has also led economic development missions and study tours to cities in Asia and the US.

John Jung
ICF co-founder John G. Jung originated the Intelligent Community concept and continues to serve as the Forum's leading visionary. Formerly President and CEO of the Greater Toronto Marketing Alliance and Calgary Economic Development Authority, he is a registered professional urban planner, urban designer and economic developer. He leads regular international business missions to US, European, Asian, Indian and Australian cities, and originated the ICF Immersion Lab program. John is a regular speaker at universities and conferences and serves as an advisor to regional and national leaders on Intelligent Community development. The author of numerous articles in planning and economic development journals, he has received global and Toronto-based awards for his work in collaboration and strategic development and sits on numerous task forces and international advisory boards.

Louis Zacharilla
ICF co-founder Louis Zacharilla is the creator and presenter of the annual Smart21, Top Seven and Intelligent Community Awards and oversees ICF's media communications and development programs. He is a frequent keynote and motivational speaker and panelist, addressing audiences of tech, academic and community leaders around the world, and writes extensively for publications including American City & County, Continental Airline's in-flight magazine and Municipal World. His frequent appearances in the electronic media have included both television and radio in South Korea, China and Canada. He has served as an adjunct professor at Fordham University in New York and is a Guest Lecturer at Polytechnic University's Distinguished Speaker Series. He holds a Masters Degree from the University of Notre Dame.