Study: High-speed Net bypasses rural areas

The study said differences in state income and government regulation are slowing the introduction of high-speed Internet access across the country. In a few states, such as New Hampshire or Arkansas, for example, the network equipment needed to support high-speed access is practically nonexistent, the report said.

Local phone companies and independent ISPs are largely counting on digital subscriber line (DSL) technology, which allows existing phone lines to carry voice and high-speed data traffic, to enter the consumer broadband market.

"The vast majority of Americans in inner cities and rural areas simply do not have access to the high-speed Internet and are unable to reap the full benefits of the digital economy," said Eric Oblater, the study's author. "We need to make sure we don't have dirt roads between high-speed backbones and high-speed connections."

Washington is particularly interested in the issue of unequal access to the Internet. The Commerce Department released a "Digital Divide" study early this month detailing sharp differences in Internet use and access between races and income levels. Federal regulators also have highlighted problems with rural access to the broadband Internet in recent weeks.

Internet hubs
The study focuses on the deployment of Internet backbone "hubs," which serve as transfer-points for Net-bound data coming in from consumer and business phone lines. Cable companies that offer their own high-speed services have their own separate connection hubs to the Internet.

These pieces of network plumbing are often unnoticed by the average Internet user, but the lack of sufficient Net hubs in a local area can cause data slowdowns in much the same way the lack of a good freeway off-ramp can tie up or bypass a town's traffic system.

The study found that there is a definite discrepancy between the amount of hubs available in urban centers in comparison to rural areas. California has 177 backbone hubs installed, Texas has 90, and New York has 58. In contrast, Arkansas, Wyoming, and Kansas have one apiece, while West Virginia, Wyoming, Montana, South Dakota, North Dakota, Maine, and Vermont have none at all, the study said.

Rural or other areas can get broadband Net access, but it is much more expensive, the study notes. Internet service providers (ISPs) that link to a local backbone hub for high-speed DSL connections spend about $3,000 to $5,000 a month on the connection, the study found. Rural ISPs--which have to go long distances for the link if they can get it at all--spend between $41,000 and $45,000 for the same services, the study says.

Money and demand
The main reason for the slow introduction of broadband services to rural communities was also the most obvious--the equipment follows money and demand. Large metropolitan areas don't have broadband problems--New York and San Francisco are wired, and more companies are building networks around these population centers.

But the study also took a look at current government regulations over broadband networks.

Bell telephone companies like US West and Bell Atlantic can't yet carry long distance data or voice traffic, at least until they convince federal regulators that they have opened their local telephone markets to competition.

The study argues that areas served by smaller, less regulated telephone companies have more direct backbone connections, even if population and income levels are about the same.

The group sponsoring the study, iAdvance, said Congress should pass legislation allowing the Bells to carry long distance data, saying this would allow the Bells to better introduce backbone hubs to rural areas that need them.

iAdvance, a high-profile Washington lobby group largely funded by the big local phone companies, also includes some high-tech companies like Gateway. The group recently hired former Clinton press secretary Mike McCurry and former congresswoman Susan Molinari as co-chairs, and is focused on broadband issues.

Yet national newcomers like Qwest Communications already are rolling out backbone hubs without the overhang of regulation, analysts said.

"I think this is mostly spin on the Bells' part, but very artful spin," said Joe Lazlo, a telecommunications analyst with Jupiter Communications. "The Bells are going to go where the profits are, and that's going to be in the cities where the companies already are."

The slow development of hubs in rural areas is largely driven by a simple lack of demand, since telephone companies' high-speed digital subscriber line (DSL) Net service does not work well over long distances, Lazlo noted.