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Rural broadband coverage seen as essential

High costs cause some customers to drop service

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POSTVILLE — Dianne Rissman remembers what life was like before she was able to get broadband Internet service at her business in rural Postville.

“We have old phone lines, and it would take 15 to 20 minutes to load a page. We would just finally give up,” said Rissman, co-owner with Caroline Clark of Forest Mills Quilt Shop.

“We used to have the old dial-up credit-card machine. We switched to the Square card reader, and in less than a year we saved enough in fees to pay for the iPad we need to run it.”

Clark and Rissman have fixed wireless broadband Internet service through Allamakee-Clayton Electric Cooperative in Postville.

A receiver mounted on a utility pole is connected to their store by a cable. The receiver links up with a transmitter at the top of a grain silo in Postville.

Paul Foxwell, executive vice president and general manager of Allamakee-Clayton Electric Cooperative, said rural electric co-ops see the need to add Internet broadband service in rural communities that are not being served by other telecommunications providers.

“It really boils down to economic development,” Foxwell said. “It’s a way for rural areas to compete with urban areas and maintain a quality of life for rural residents that’s on an equal footing.

“We liken it to the early days of rural electrification. Having electricity was viewed as a luxury by a lot of people at that time, but now it’s a necessity.”

The population of rural communities in the United States is falling, according to data from the U.S. Department of Agriculture’s Economic Research Service. Average growth rates for rural areas fell from 0.7 percent in 2006 to below zero in 2011, where they have remained.

From 2011 to 2012, rural areas of the country lost more than 40,000 people, a drop of 0.1 percent. Iowa’s population grew increasingly urban between 2000 and 2010 as residents continued to leave rural counties and moved to a handful of larger cities, according to 2010 data from the U.S. Census Bureau.

Iowa’s rural population fell from 1,138,892 in 2000 to 1,096,099 in 2010.

“Broadband Internet service is one of the first things that people want for the their home or business when moving to an area,” said Michael Keyser, chairman of the Rural Broadband Council, a national association of electric utilities that share a mutual interest in constructing broadband networks.

“Broadband is a building block of economic growth. It’s absolutely necessary, and it doesn’t appear that the incumbent telephone companies are interested in building broadband in rural areas. It comes down to how much time it would require for broadband to be profitable.”

Keyser said building broadband networks fits the mission of rural electric co-ops to provide reliable electric service to their members and customers.

“We need broadband as much as our customers for things like substation communication and devices on the smart grid,” Keyser said. “Why not do what our founders did 75 years ago with electricity and build out broadband.”

Getting a broadband project off the ground takes upfront capital and the support of co-op members. That’s where the federal Connect America Fund plays a critical role.

The Connect America Fund, administered by the Federal Communications Commission, awarded $1.45 million to Allamakee-Clayton Electric Cooperative in August 2015 for a hybrid fiber/fixed wireless network.

“We looked at whether we could justify the cost of running fiber to the home,” Foxwell said. “We found that given our low consumer density and the terrain of northeast Iowa, the cost would exceed the value of our total electric utility plant.

“We are getting $1.45 million over 10 years or $145,000 per year to build broadband infrastructure in underserved census blocks of Fayette County. Within three years, we have to be able to verify that we can provide service to 85 percent of the geographic area, and within five years we must verify 100 percent coverage.”

Allamakee-Clayton’s fixed wireless broadband Internet service is capable of providing 10 megabits per second (mbps) for downloads and 1 mbps for uploads. That meets the FCC’s previous definition of broadband — 4 mbps for downloads and 1 mbps for uploads — set four years ago, but falls short of the agency’s revised standard of 25 mbps for downloads and 3 mbps for uploads adopted on Jan. 29, 2015.

Data released in July 2015 by Connect Iowa, a not-for-profit organization that promotes broadband access, adoption, and use, showed statewide broadband availability of 25 Mbps download/3 Mbps upload increased by almost five percentage points since the last mapping data was released in October 2014.

Connect Iowa was commissioned by the state to work with all broadband providers to create detailed maps of broadband coverage and develop a statewide plan for the deployment and adoption of broadband.

Dave Duncan, CEO of the Iowa Communications Alliance, said there are fairly significant pockets of rural Iowa where residents and business owners do not have access to broadband Internet under the new FCC definition of broadband. Duncan said independent telephone companies, such as South Slope Cooperative Communications in North Liberty and USA Communications of Shellsburg, have installed fiber to homes and businesses to provide the higher speeds.

“Unfortunately there are a lot of places where it just doesn’t pencil out,” said Duncan, whose organization represents more than 130 community-based telecommunications providers.

“That’s when you need to look at other technologies, such as wireless point to point, because one size does not fit all. While fiber to the home provides the best broadband service, it may not be economically cost effective for providers or consumers.”

The cost of broadband Internet service is a major factor for consumer acceptance, according to a Pew Research Center report released in early January. A Pew survey of 2001 adults found a 5 percent drop between 2013 and 2015 — from 60 percent to 55 percent — in the percentage of rural households with home broadband.

Although a majority of those surveyed believe a lack of broadband is a major hindrance in getting important information about jobs, news and other information. More than 40 percent of nonusers cited high costs as a reason why they don’t have broadband service at home.

“Financial concerns — the monthly cost of a broadband subscription most prominently, but also the cost of a computer — loom large as barriers to non-adoption,” researchers John Horrigan and Maeve Duggan wrote in “Home Broadband 2015,” the Pew report.

That Pew survey found many rural residents are using smartphones as a replacement for home broadband. The percentage of rural residents who have a smartphone — but no high-speed Internet on a home computer — jumped from 9 percent to 15 percent between 2013 and 2015.

“The rise in ‘smartphone-only’ adults is especially pronounced among low-income households (those whose annual incomes are $20,000 or less) and rural adults,” the Pew report said.

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