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Industry Survey Examines Small Telecom Companies & Fiber Deployment

| Written by Lisa Gonzalez | No Comments | Updated on Sep 5, 2017 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/industry-survey-examines-small-telecom-companies-fiber-deployment/

When it comes to rural areas, it’s no secret that national providers have little interest in serving the sparsely populated communities. Cooperatives and small local providers typically pick up the slack but it isn’t easy. In a recent survey indicated that small rural telephone companies are overcoming hurdles to deploy fiber and making long-term plans to continue the trend. Furthermore, rural subscribers are proving that they are hungry for high capacity connectivity.

Local ISPs Are Doing It

Approximately 89 percent of “NTCA 2016 Broadband/Internet Availability Survey Report” revealed that the expense of Fiber-to-the-Home (FTTH) deployment was the most difficult barrier to break through. Even though they faced the difficult problem of financing, 52 percent of survey respondents in the midst of fiber deployments in the spring of 2017 were serving at least half of their customers with FTTH.

Planning For The Future

Fiber is the future for most of the survey respondents. Eighty-two percent reported long-term fiber strategies with 66 percent of those with strategies planning on offering FTTH to at least half of their customers. Another 39 percent of those with long-term fiber strategies will offer fiber to the node to more than 75 percent of their customers by the end of 2019. Thirty-one percent of local telcos with long-term fiber plans who responded to the survey report said that they have already completed their fiber deployment plans.

Subscribers Want More

According to survey respondents, rural subscribers are choosing faster speeds tiers. Relative to the same survey one year ago, the demand for download speeds in excess of 25 Megabits per second (Mbps) more than doubled from eight percent of subscribers to 17 percent of subscribers. As the percentage of subscribers choosing a faster speed tier is increasing, the number of subscribers signing up for slower speeds is decreasing. The report describes rural subscriber behavior as, “moving up the broadband speed chain” and says that “…providers need to be prepared to offer them the level of service they demand.”

What Does The Survey Tell Us?

The survey reveals that rural residents and businesses are increasingly interested in high-quality connectivity and that small entities will do what it takes to bring it to them. Based on the fact that cost is the primary barrier facing the small entities serving communities left behind by national providers, it also supports the proposals we recently heard from Jon Chambers in episode 268 of the Community Broadband Bits podcast.

He suggested that, as the FCC reviews how funds for the federal Connect America Fund program are distributed, the agency take a consumer-driven approach. Rather than continue to dole out millions of dollars to national telephone companies only willing to invest in more DSL connections for rural areas, one of the factors the FCC should consider is what rural residents want and which bidders are willing to provide it. Small local companies and rural electric cooperatives that struggle to fund fiber deployment but still prioritize it deserve a higher ranking than multi-million dollar companies that build outdated infrastructure for rural communities. If they can build it and are committed to the project they propose, they should be taken seriously as contenders for Connect America Funds. Additionally, those proposals need to be carefully scrutinized to meet the needs of the people and businesses they aim to serve.

Read the full NTCA report, which includes survey results about other issues such as marketing and video service.

Check out Christopher’s interview with Jon Chambers, a partner in Conexon, on rural electric cooperatives, the Connect America Program, and serving rural America.

This article was originally published on ILSR’s MuniNetworks.org. Read the original here.