FCC chair advocates closing rural-urban digital divide
MADELIA — Ajit Pai, Chairman of the Federal Communications Commission (FCC), stopped in Madelia for a round-table discussion with broadband providers.
During the round table, which was closed to the press so participants felt they could speak freely, they discussed challenges for expanding rural broadband and tools available to overcome them.
“One of the things that is really important to me and to the FCC is rural broadband deployment,” Pai said. “Increasingly, the Internet is an important part of Americans’ lives and that is especially true in rural America.”
Pai began his post-discussion statements to the press arguing for the importance of internet access. He called it a “force multiplier” that has a positive impact on anything from health care to education.
“For agriculture, for instance, I have been on feedlots that use broadband in order to make sure that the cattle are getting the feed that they need and the antibiotics that they need,” Pai said.
He argued that there is a disparity in U.S. citizens’ ability to get online, drawn largely between rural and urban residents.
“To me the number one issue for the FCC is closing the digital divide as I have called it,” Pai said. “That means making sure investment pours into parts of the country that have not necessarily known it before.”
A major obstacle to expanding broadband is simply the cost, Pai said. It takes a lot of money to build and maintain a network, and in rural areas there are fewer customers, making the cost more prohibitive.
“You have copper cable that goes to existing customers and that revenue does not change when you switch them to broadband,” Brent Christensen, President/CEO of the Minnesota Telecom Alliance (MTA), said after Pai’s remarks. “So you have to find a way to keep upgrading your network on the same revenue base.”
Pai also listed Minnesota’s seasons as a major challenge particular to this state, as winter is not a good time to bury fiber optic cable.
A third reason was how difficult state and federal approval can be to get. Additionally, many broadband companies in the area are smaller, which in and of itself limits their capabilities.
“It is really hard to build and to maintain and to operate these networks, and if you have a smaller company, then you necessarily have fewer resources to throw at these problems,” Pai said. “It is frankly amazing that some of these companies I have met today and I met yesterday in Wisconsin are able to do what they do.”
As for solutions, Pai said the broadband representatives identified tools the FCC already has. He listed three: subsidies, regulations and advocacy.
On subsidies, there were two prongs Pai mentioned. The first is largely an issue of priorities. Pai said he would like to see less government funds going to upgrades and more going to deployment.
“Currently, for instance, we spend hundreds of millions of dollars to subsidize areas that already have broadband service,” Pai said. “I think those funds would be wisely spent making sure that unconnected Americans have a chance at a digital opportunity.”
The second prong was introducing market forces into broadband deployment. An example he used was a reverse auction — where providers would bid to build a network.
Reverse auctions would put downward pressure on the cost of broadband, Pai said, making it cheaper to deploy.
Updating regulations could also be effective at making it easier for broadband companies to lay down fiber optics.
A lot of regulations relating to the FCC began in the 1930s with the expansion of rural electricity and phone lines, Christensen said after Pai’s remarks. Now those rules are shifting from phone lines to broadband access.
Another concern was regulatory stability. Representatives mentioned concerns over how the FCC could change the rules, Pai said.
“We want to make sure that the rules of the road are stable and that they reflect the marketplace of today,” Pai said. “That is an approach I think will give them the ability to pull the trigger on some of these critical investment decisions in towns like this one.”
Connor Cummiskey can be emailed at firstname.lastname@example.org.