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The need for broadband in rural America

September 6, 2012
Mark Harvey - FCTC General Manager , Dysart Reporter

As President Barack Obama visited our state, I'm sure he took time to see the great resources available through Iowa's rural landscape. Additionally, I hope he recognizes the conflicting policy being created in Washington that threatens a key economic growth engine - broadband deployment in rural America.

The president has acknowledged the need to strengthen our rural communities and encourage economic development through greater access to broadband. Yet at the same time decisions are being made by the Federal Communications Commission that threaten to undermine progress by leaving many small communities without adequate access to broadband. Here in Dysart, our company, Farmer's Cooperative Telephone, has delayed deployment of fiber optic network services because of the uncertainty created by these new rules.

Thanks to the deployment of broadband Internet service, Iowa communities have seen new economic opportunities and slowed their population losses. Over the past few years, many Iowans have been able to enjoy the benefits of broadband - streaming live sports and movies, telecommuting, WiFi, distance learning and telemedicine. Iowa's independent telecommunications companies have made this possible, particularly in rural areas.

Providing reliable broadband telecommunications service in rural states has largely been left to small, independent co-ops and companies. Serving consumers in sparsely populated rural areas is much more costly than serving people in highly populated urban areas. Over the past five years, independent telecommunications companies in Iowa have spent $235 million investing in fiber-optic capabilities to meet the needs of businesses and consumers - even their wireless needs. But the FCC's actions threaten future progress and could mean a step backward.

In its efforts to expand broadband access, the FCC last year approved rules that are forcing rural providers to reassess how they will deploy broadband in their communities. The rules ultimately eliminate the access fees companies collect from other carriers that transport calls and data over their networks.

At the same time, the FCC is also phasing out the Universal Service Fund, another vital source of revenue for companies that invest in telecommunications services in rural areas. It is being replaced with the Connect America Fund, a program that will penalize local telecommunications providers that have been proactive in offering broadband service to rural customers.

What do these changes mean to Iowans?

First, consumers and businesses will see access recovery charges on their bills (50 cents for consumers and $1 for businesses, per month) as required by the new rules beginning this month. These are fees that typically were shared among providers, not paid by consumers. Other changes and charges loom for 2013 and 2014.

Without USF support and access fees, rural customers most likely will pay more, and deployment of broadband in unserved areas will be slowed or even stopped.

Farmer's Cooperative Telephone Company was recently approved for a $5.7 million loan to deploy fiber in the community. However, our company is holding off on this project until we better understand our revenue projections in this new climate. Delaying this project is not welcomed by employers in our service area that are dependent on reliable broadband connectivity.

According to one survey by the Iowa Telecommunications Association, almost 80 percent of the state's rural telecommunications companies have delayed or canceled plans to deploy fiber optic cable in their service areas because of the FCC's changes.

Iowa's independent telecommunications companies are dedicated to delivering and upgrading broadband services for customers. Industry representatives are working with regulators and other rural telecommunications advocates to better identify the economic impact of these new rules on these companies and their customers. But that may not be enough. To pressure the FCC, I urge rural residents to join the Save Rural Broadband campaign by going to Our goal is to send thousands of letters to Obama to urge him to direct the FCC to change course and provide for a sustainable broadband future consistent with his goals of rural broadband deployment.

Regardless of your political party, the president's visit provides us with an opportunity to make a statement about the importance of keeping rural Iowa communities connected, vibrant and viable. Both candidates need to hear we want to continue moving forward, not backward.



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