Broadband for the 21st century

As federal policymakers search for ways to foster job creation, some low-hanging fruit is within reach. The Federal Communications Commission is nearing agreement on reform and modernization of two multibillion-dollar regimes that originally were designed to foster rural telephone service. 

Without spending a dollar more than we do today, the result could be an updated program for the Internet era that enables construction of thousands of miles of new broadband routes across rural America. High-speed connections to the Internet would be available to millions of homes and businesses for the first time. Funding also would be used for an operation of networks that would not exist absent support.

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And it’s not an issue that gets caught up in political gridlock. It’s the outgrowth of a decade of bipartisan work by the FCC, Congress and the White House on the FCC’s most important rural programs, the Universal Service Fund (USF) and its lesser-known but vitally important sibling, the Intercarrier Compensation System.

Last week, FCC Chairman Julius Genachowski announced that he has prepared a proposal and shared it with his fellow commissioners, setting the stage for an Oct. 27 vote.

Although I have not seen the details of the chairman’s proposal, allow me to make some observations on where we should be headed, and also offer a word of caution.

When it comes to deploying broadband in rural areas, my company doesn’t just “talk the talk.” Few companies provide as much rural broadband as Windstream. We have more than 1 million broadband customers in a service territory that averages 17 subscribers per square mile — that’s comparable to the population density of New Mexico, the 45th state in the nation in density.

Across our service territory, more than 90 percent of homes and businesses can subscribe to broadband, the result of continual network upgrades over the past decade. Generally speaking, Windstream’s broadband investments have relied on private capital. Although we serve a vast and sparse region, the company receives relatively little USF support.

Other companies have made similar efforts. The industry has stepped up to meet the demand for broadband in almost all areas where there is a business case for doing so. Wireline telecom providers invested more than $600 billion on networks from 1996 to 2010. 

Unfortunately, Windstream and other broadband providers have reached the end of what can be achieved under current policies. The FCC estimates that 18 million rural Americans still lack broadband, but also concluded that there are very few areas remaining with a business case for private investment.

As other broadband providers do, we wish to reach the remaining 10 percent who lack broadband in our areas, but that will require a reformed USF. We need to pool public funds with private capital to achieve widespread and consistent availability.

An industry coalition of which Windstream is a member has spent months developing a consensus proposal to address the need to support broadband in high-cost areas. We’ve come up with a plan to bring broadband to 4 million more residential and business locations, and enable continued operation of networks that require ongoing support. On average, the areas have 3.6 subscribers per square mile.

The industry plan stays within the existing USF annual budget, $4.5 billion, while targeting support more precisely to high-cost areas. Our plan avoids waste by limiting subsidies to only one provider in each area. Key lawmakers have praised the proposal and have written to Genachowski urging prompt action.

I was very encouraged to hear Genachowski say last week that “we are at the 25-mile marker of a marathon.” But the last mile could be the most difficult. Some on the sidelines — those who never intend to deploy broadband in rural areas — might try to trip up the commission with unworkable proposals and unwarranted criticism. 

I have three admonitions to these critics: (1) “Good ideas” from spectators unwilling to “walk the walk” are likely not so good; (2) Flash cuts from old programs could hobble the very companies that are best positioned to build out broadband, and even could interrupt vital communications to rural consumers — transitions are essential; and (3) Promises and obligations must be funded — the costs of change can be significant, which is frustrating, but they cannot be ignored. After a decade of frustration and defeat for one reform initiative after another, it is vital that the finish line be crossed. 

Many Americans in remote areas lack access to one of the most critical tools of the Internet age. It is these Americans who could benefit from decisive action by the FCC. 

Last year, the commission recognized the urgency of the issue by releasing two reports declaring that broadband isn’t being deployed in a “timely or reasonable manner.” Not only is it imperative that the FCC and federal policymakers act now to speed delivery of high-speed Internet services to rural areas, but in doing so, they not only can increase investment and achieve greater consumer benefits but aid the economy as well.

Jeff Gardner is president and CEO of Windstream Corp.