Three different takes on rural broadband deployment

[Commentary] The Rural Broadband Alliance, a small telco group created a couple of months ago with the specific goal of pushing for changes in the National Broadband Plan, has released a paper to support its agenda, arguing, among other things, that the Federal Communications Commission should not eliminate rate of return (ROR) regulation.

The National Broadband Plan proposed eliminating the ROR system because it offers no incentive for small telcos to reduce their costs. But Lehman offered an interesting rebuttal. "One cost-reducing incentive the small telcos have is that the managing director may be sitting at the lunch table in a small town next to the largest customers or owners," he said.

Considering that most small telcos already have deployed broadband, perhaps the biggest question for those telcos moving forward is what level of universal service support they should expect if policymakers move ahead in implementing the reforms proposed in the National Broadband Plan. Frontier Communications CEO Maggie Wilderotter noted that typically it's the last 8% of a service area that's tough or unprofitable to serve. She argued that only carriers that have deployed broadband to 88% or 90% of a territory should be eligible to receive funding.

The FCC has been promoting 4G wireless service as an alternative to landline offerings such as DSL or fiber to the premise for delivering broadband to unserved areas. The FCC also has noted that for the highest-cost areas, satellite-based service may be the most economical option. Chuck McCown, CEO pro tempore of Beehive Telephone Company, a small telco serving remote areas of Utah and Nevada, said he is not worried that policymakers might shift funding away from companies like Beehive and toward satellite service because satellites are not a suitable replacement for landline service because they have greater latency.