Microsoft’s rural broadband gamble might have millions of winners

by Steve Blum • , , ,

The rural/urban broadband divide is deep, according to a report by Microsoft. For people living and working in rural areas, it’s confirmation of what they already know, but it’s valuable nonetheless. Microsoft’s critique of the available data – and the 25 Mbps download/3 Mbps upload speed standard – is a useful corporate counterweight to the claims made by AT&T and Frontier, which are the telcos receiving the lion’s share of federal broadband subsidies for 10 Mbps down/1 Mbps up service in rural California.

The report highlights the annual coverage data submitted to the Federal Communications Commission by Internet service providers. The latest numbers show that 25 million people in the U.S. lack access to what Microsoft calls “a broadband-speed connection to the internet”, i.e. 25 Mbps down/3 Mbps up. Of those, 19 million people live in rural communities – 31% of the U.S. rural population.

California has 1.2 million unserved rural residents, representing 54% of our rural population, according to Microsoft.

But the FCC data probably overstates broadband availability, Microsoft says…

Data that Microsoft collects as part of our ongoing work to improve the performance and security of our software and services for customers provides additional evidence that the FCC overestimates broadband usage in the United States. While the FCC reports that 92 percent of Americans have access to broadband, our data indicates that the number of people who connect to the internet at 25 Mbps is probably closer to 49 percent. Largely rural states including West Virginia, Alaska, New Mexico, Arkansas, and Mississippi that rank among the lowest for broadband access according to the FCC are also among the lowest in our data.

Microsoft’s solution is its “Airband Initiative” which, the company says, is aimed at “harnessing unassigned broadcast spectrum known as TV white spaces to bring broadband connectivity to 2 million unserved rural Americans”.

That spectrum is in the 700 MHz range, which is better able to propagate over rural distances and cut through foliage and other obstructions, but also carries less data than more finicky higher frequency bands. That’s the reality of wireless engineering trade offs: there are no magic solutions, only different – and valuable – tools in the kit.

So far, Microsoft has invested in eight companies – including Cal.net in California – that plan to eventually reach about 1.1 million unserved people via fixed wireless service. Microsoft is not releasing actual subscriber or availability data, or disclosing how much it’s investing, though.

The initiative is not philanthropy on Microsoft’s part (nor should it be). The investments might or might not generate a direct return, but the “royalty-free access to…patents and sample source code related to TV white spaces technology” that Microsoft is also contributing could be significant. Using white spaces without interfering with TV broadcasts requires a central frequency coordinator, such as Microsoft or Google, another contender for that role.

The more rural households that Microsoft’s partners serve, then the greater the adoption of Microsoft’s core technology and the better the chance it has of cornering the top spot in that market. If that strategy works, everyone wins. If it doesn’t, Microsoft loses.

Just so.