Why can’t we get rural America online? Because it doesn’t pay the bills for big companies

Here’s why: First, the definition of broadband internet service is a moving target. Typically, “broadband” refers to high-speed internet connections with more data bandwidth and less lagging, known as latency. Today, the Federal Communications Commission (FCC) defines broadband as having download speeds of 25 megabits per second, and upload speeds of three megabits per second. That’s the speed at which multiple people can stream video simultaneously. But the standard changes all the time. And the inconsistency allows big telecommunications companies, often the first to win subsidies to deliver broadband to underserved areas, to haggle with the government over what they’re really expected to provide.

Second, connectivity varies tremendously. Income is operative—according to Pew Internet, the poorer you are, the less likely you are to be using broadband at home—and so is where you live. Seventy-three percent of urban adults and 76 percent of suburban adults use broadband at home, compared to only 63 percent of rural adults, the same study finds.

John Windhausen, a former FCC staff attorney, says that rural Americans have inferior broadband to their urban counterparts because of the lower population density where they live. Rural counties are also poorer. So internet providers have to build physically larger networks to reach fewer customers who don’t have as much money to pay for services. 

Topography is also a factor in the access equation. A recent report prepared for the Schools, Health & Libraries Broadband Coalition, a broadband advocacy group founded by Windhausen, showed that the cost of fiber connectivity, considered the gold standard in broadband infrastructure, varies tremendously by region and terrain. Again, population density is the primary factor in determining the cost of connections. But the flatlands of the Great Plains are much cheaper to build in than the rocky soil and winding roads of Appalachia.

Want another reason? According to some rural broadband advocates, the telecommunications companies aren’t doing a good job.

Last month, as part of a big push to promote rural broadband connectivity, FCC published a new broadband map, which it intended as a tool to guide legislation and appropriations for federal funding of deployment. It paints an unsurprising picture. Across the country, big cities and their suburbs are served by multiple providers. Large swaths of the Great Plains, and southern states like Arkansas, Mississippi, and Alabama are not. But the data in the map were self-reported by internet service providers, prompting Commissioner Jessica Rosenworcel to call it all faulty, even in urban areas.

“All you gotta do is talk to somebody from the countryside and say, ‘All right, according to the FCC’s map, you can get 100 down, 10 up, from two different carriers. What in fact is available?’” says Marty Newell, referring to upload and download speeds.

Newell is chief operating officer for the Center for Rural Strategies, a nonprofit organization that advocates for rural broadband. He works in Whitesburg, Kentucky, in the Eastern Coal Field region of the state. Only 42 percent of the population where he is has access to a broadband connection. “You know you live in the country when your kids use up all the internet one day into the cycle,” Newell’s email signature reads. “Duh, the Xbox updated automatically.”

According to FCC’s map, which reflects data from December 2016, the county’s longtime telephone provider, AT&T, offers a download speed of 18 megabits per second. Newell says that data’s wrong, and the coverage is exaggerated, too.

“I just didn’t see it,” he says. “Most of those providers show coverage in parts of the county where I know there’s no service, where the lines stop at the mouth of the holler, or down by the main road, and they don’t run up to my nephew’s house.”

But that all changed, he says, when a wireless internet service provider (WISP) named Gigabeam installed relay towers on a city-owned parcel in the mountains. After its towers went up, AT&T and a regional cable company called Thacker-Grigsby both started offering true broadband speeds.

Maybe Newell wouldn’t have had to wait so long if WISPs like Gigabeam had been eligible to receive federal funding for broadband deployment. Since 2012, the FCC has offered up billions of dollars in funds for providers as incentive to go out into the expensive, hard-to-access parts of the country, like Whitesburg. But WISPs generally aren’t eligible for those funds.

Windhausen, the former FCC staff attorney, says FCC only recognizes telecommunications carriers that can cover a whole “service area.” Generally, those areas are historically derived from coverage maps that those very same carriers, often longtime telephone companies, drew up themselves. Over time, those companies have evolved into now-familiar multi-service providers like AT&T and Verizon. Their size and ubiquity tip the balance of certification, and thus federal funding, toward them.

Almost always, says Roberto Gallardo, the assistant director of the Purdue Center for Regional Development, those funds go to major companies. 

When the first round of FCC funding, otherwise known as Connect America Funds, was announced in 2012, it came with the goal of “quickly” providing bare-bones coverage to as much of the country as possible. The funding went entirely to large telecoms: AT&T, CenturyLink, FairPoint, Frontier, and Windstream, according to business information company FierceTelecom.

But that first round of funding was only intended to bring download speeds up to four megabits per second—a pretty low threshold—and it allowed the big carriers to use their pre-existing infrastructure to set up DSL connections. The slow speeds are one thing. Investing in already-outmoded technology could also be considered a waste of money.

“We need more capacity than DSL offers,” says Windhausen. “It’s a very low-class type of broadband. That was the minimum to do to get access to federal money.”

For the second round of Connect America funding, announced in 2015, FCC upped the broadband requirements to 10-megabit download speeds—beyond what DSL could provide, but still well below the agency’s official definition of broadband.

In areas where the large “price cap carriers,” as big telecommunications companies are known, have declined to provide service, the FCC now is giving smaller incumbents, like rural electric cooperatives and cable companies, the opportunity to take on the job through an auction.

“What both sets of companies have is access to the rights-of-way, whether that’s space on telephone poles or trenches dug to everyone’s home,” Windhausen says of the electric co-ops and cable companies. “Once you have the conduit in there, there’s still the expense of pulling fiber through the conduit, but it’s less expensive than starting from scratch.”

This week, the commission began accepting applications from companies that may be interested in taking on these neglected areas, and is set to award funding to the lowest bidders later this year. A map of the census blocks to be served by the auction is available here. It’s basically the inverse of FCC’s broadband map. Big sections of Nevada, Idaho, Utah, and Arizona still don’t have 10-megabit speeds.

Electric co-op advocates, including the Institute for Local Self Reliance, insist that rural co-ops do a better job of serving rural America than corporate interests ever have. At a minimum, allowing co-ops to apply for funding could dispel the notion that FCC is beholden to corporate interests. Famously, last fall, the agency ruled in favor of declassifying the internet as a utility, a move seen as paving the way for companies like Verizon to earn more money by throttling content.

Both the Institute, and Newell, believe those major telecommunications carriers have too much influence in state legislatures. Newell, for one, is more tapped into funding opportunities from the United States Department of Agriculture (USDA), which are set to expand with the passage of the omnibus spending bill.

“If they’re not getting to those places, and they haven’t gotten to these places, why don’t we try something else?” he asks. “I don’t know if that’s a regulatory thing from the FCC, or a legislative thing from Congress. If it’s legislative, I know who’s got the biggest lobbying power.”

Applications to participate in FCC’s Connect America Fund auction are due at the end of the month. The agency expects to conduct the auction in July.