Get out of town to see new broadband horizons

by Steve Blum • , , , , ,

One trend to watch for in 2013 is consolidation and growth in rural broadband in the U.S. AT&T and Verizon are backing – sometimes running full speed – away from the wireline business in less densely populated markets. That's an opportunity for entrepreneurs with rural telecoms experience to create their own kind of economies of scale.

Frontier Communications is well down that road, with five million phone lines under its management nationwide. Like Google, Surewest is looking to Kansas as a growth opportunity. Here in California, Sebastian is expanding from its home base in Kerman, acquiring another small telco in the Sierra foothills and positioning itself as the go to company for rural telecommunications construction. Suddenlink has discovered how to run geographically scattered cable systems with a lean and mobile staff.

But that's just the first wave crashing on shore. The one built on legacy systems. It's the next wave that will run up and over the beach.

Fiber backbones are easier to build outside of metropolitan areas, when people are of a mind to cooperate. The options for last mile service – wireless, legacy copper and maybe even fiber – are gaining in effectiveness while holding steady on costs.

Dispersed and fully digitally native, small management and operations teams have no trouble keeping in touch with networks, customers and each other. Networks can scale up while head counts and costs stay relatively flat.

This coming year, watch for one or two embrace these advantages introduce new service delivery and business models that overcome the high fixed costs of broadband infrastructure and the low marginal revenue of rural markets.