Subsidising AT&T fiber to boost bandwidth for schools could be a net loss for rural areas

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

More federal subsidies for fiber build outs and connections for schools in rural areas, as FCC chair Tom Wheeler has suggested in a recent speech is a fine idea as far as it goes. But unless the money is used to create infrastructure that’s available on a competitive basis to all users – residents, businesses and local governments, as well as schools – the net result could be more expensive and less capable access for people in rural areas.

The FCC’s E-rate program picks up part of the monthly Internet service bill – as much as 90% in some cases – for schools. That bandwidth can only be used by schools – it can’t be resold or even offered for free, for example, to low income families. Anyone else who also wants to take advantage of infrastructure that’s installed to provide that subsidised service has to do business with the company that built it, on that company’s terms.

In California, as in many other states, that company is usually AT&T, which doesn’t sell dark fiber or other broadband building blocks – it will only sell fully packaged and managed bandwidth at rates it sets and in a manner it chooses. And for consumers and businesses in many rural areas – indeed, anywhere that’s not a high potential area by its standards – AT&T has chosen to cap legacy DSL capacity and not upgrade to the higher speed VDSL-based Uverse service it offers in more affluent markets. Instead, it’s trying to sell rural customers higher priced, less reliable and capacity constrained wireless service using its mobile network.

Giving AT&T public money to build fiber to schools and, along the way, its cell sites without requiring some level of open access to that infrastructure will lock rural areas into a single provider that won’t invest in upgrading broadband service for the rest of the community. Except at extortionate mobile data prices.