Microsoft expands rural broadband push to include 1 million more people

A year and a half ago Microsoft launched an initiative to bridge the digital divide for rural Americans, promising to connect 2 million people in remote parts of the country within five years. On Tuesday, it expanded that program and said it would cover an additional 1 million people by 2022.

On Tuesday, Brad Smith, president of Microsoft, said the company is ahead of schedule with its Airband Initiative, which uses unlicensed TV wireless spectrum. TV white spaces, as the spectrum is known, are the unused TV broadcast channels made available by the transition from analog to digital TV.

Smith said Microsoft has already reached 1 million people in 16 states with Airband and that now the company is promising to make broadband available to 3 million people by July 2022. Microsoft is also expanding the initiative to reach communities in an additional nine states so that by the end of 2019 it'll be operating in a total of 25 states.

Microsoft and its partners want to be part of a solution to a critical problem facing the US: delivering broadband services to millions of rural Americans who don't have access at their homes, farms and businesses. With broadband now as essential as running water and electricity for improving people's daily lives and providing a standard of living equal to that of urban and suburban parts of the country, federal and local policy makers are starting to work with private companies to close the connectivity gap.

"As we deepen our commitment to bringing broadband to rural America, we believe the country can raise its ambition as well," Smith said in a Tuesday blog post outlining the initiative's progress.

A new way to solve an old problem

In spite of the billions of dollars in private investment and government subsidies over multiple decades, the numbers still paint a disturbing picture. Roughly 39 percent of rural Americans lack access to high-speed broadband, compared with just 4 percent of urban Americans, according to a Federal Communications Commission report that relies on figures from 2016. This means more than 19 million Americans, about the population of New York state, don't have access to broadband.

Even within the past five years, $22 billion in government subsidies and grants to telecommunications carriers to sustain, extend and improve broadband in rural America haven't helped close the gap. Smith reports that despite these efforts, the country's adoption of broadband hasn't budged much since 2013.

The biggest issue is that building networks in rural America is incredibly expensive, and in some places it's nearly impossible. The terrain itself can be problematic, but the biggest barrier to getting broadband in certain areas of the country is low population density. Broadband providers simply won't offer service if they can't get enough customers to pay for it.

It's this issue Microsoft is trying to address. But instead of trying to figure out ways to put more costly fiber in the ground to provide broadband to these communities, the company is focusing on wireless technology. Specifically, it's using TV white space spectrum to deliver broadband.

The reason is simple. Laying fiber underground or stringing it on poles is expensive. And it takes much longer.

"We think there is a better way," Smith said.

And though there's much hype around 5G, it relies on high frequency spectrum that transmits signals over shorter distances and requires much smaller cell sites connected to fiber. By contrast, Microsoft sees repurposed TV white space spectrum as a more cost effective approach to delivering broadband to people in rural areas. The propagation properties of the spectrum allow signals to travel over much greater distances without experiencing interference from obstacles like trees, and the spectrum is less affected by weather.

Microsoft holds several royalty-free technology patents for using white space spectrum, but the company said it's not taking on this initiative to make money or to become an internet service provider itself, like Google tried to do with Google Fiber.

What are TV white spaces?

In 2008, the FCC unanimously agreed to open up this unused broadcast TV spectrum for unlicensed use, despite strong protests from TV broadcasters, who argued using this spectrum could interfere with their broadcasts.

The FCC has set rules for the use of white space spectrum and established an administrator of a national database to identify channels that can be used by devices accessing the shared spectrum. But there've been problems with the database's accuracy, and there's not yet an ecosystem of devices, which means the business case for using the technology isn't quite there yet.

That's where Microsoft comes in. The company has been working with a consortium of chipmakers and device manufacturers to produce affordable, innovative TV white spaces technology for internet service providers and consumers. It's been supporting ISPs by providing some funding for upfront capital costs for broadband infrastructure projects. The company hopes to recover some of this investment, which it then plans to reinvest in subsequent projects to further expand coverage.

"The goal is to build a self-sustaining market," Smith said at an event Tuesday in Washington, where he discussed the expansion of the Airband Initiative.

He said the company has already seen significant progress in bringing pricing down.

"When our Airband Initiative was launched 18 months ago, a TV white spaces network connectivity device cost more than $800," he said. "Today, similar and even higher-quality and more-capable devices cost less than $300."

The hope is to bring that cost down to $100 so ISPs can simply offer the hardware to customers as part of their service and recoup the cost through subscription fees.

"As the price of new technology falls and demand rises, these prices will continue to fall -- a critical goal -- and this market will become self-sustaining," Smith added.

For all Microsoft's efforts, Smith said, the federal government is still needed to help spur the market. He said he'd like to see more federal dollars going toward encouraging wireless deployment as opposed to focusing on wired solutions, which still account for 90 percent of the federal dollars spent on fixing the rural broadband problem.

"If the federal government reallocates just a small additional fraction of public money toward incentives for TV white spaces devices, it will help accelerate adoption, bring costs of devices down and help the ecosystem lift off," he said.

The company would also like to see more low-frequency spectrum made available for unlicensed use. And lastly, Microsoft says the FCC needs better broadband maps to target where to focus resources.

Smith said the maps the FCC is currently using are likely underestimating the problem.

"We can't solve a problem that we don't understand," he said. "There is strong evidence that the percentage of Americans without broadband access is much higher than the FCC's numbers indicate."

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