Rural areas pass on fast connections

LINCOLN — Most Nebraska and Iowa telephone companies, mirroring a national trend, appear to be taking a pass on seeking federal stimulus funds to extend and improve broadband Internet services in rural areas.

The $7.2 billion in funds were intended to expand high-speed services to underserved and unserved areas, and Sen. Ben Nelson, D-Neb., was among those urging companies to apply.

But telecommunications representatives said they were passing on the program, citing the red tape it would involve and a feeling that most rural areas that can be economically served already have some high-speed Internet service.

“You’re looking at a pretty small number of potential customers that don’t have high-speed Internet access,” said Dwight Wininger of the Nebraska Rural Telecommunications Coalition, a group of 12 rural telephone companies. “Is it worth it to take federal money to extend services for the last few miles with the federal strings that are attached?”

In Iowa, many companies appear to be sitting out the first-round of grant applications in hopes that a troublesome definition of rural areas — areas farther than 50 miles from a town — is changed, said Chuck Seel of the Iowa Utilities Board.

Eric Carstenson, president of the Nebraska Telecommunications Association, said most of the 36 companies in his association passed because of the program’s extensive and complicated requirements.

Of those interviewed, representatives of just two companies — Blair-based Great Plains Communications and Viaero Wireless, which serves rural communities west of Grand Island — said they had met Thursday’s deadline to apply for the first round of $4 billion in stimulus funds.

“The application process wasn’t easy,” said Ken Pfister, a vice president of Great Plains Communications. But “it’s a good opportunity to kick-start new broadband in areas that we wouldn’t be going into soon, if ever.”

Pfister said Great Plains hopes to provide or upgrade services for 20,000 customers, some of them far from towns.

The Washington Post recently reported that the nation’s largest Internet providers, such as Verizon and AT&T, were mostly shunning the program because of the red tape and because they have enough cash to do improve service themselves.

Qwest, Nebraska’s largest telecommunication’s firm, is among those passing on the stimulus program, as is Windstream, a major provider in the Lincoln area.

“There are too many weird strings attached,” said Randy Dannar, co-general manager of Hemingford Cooperative Telephone in northwest Nebraska.

Just where that leaves one of President Barack Obama’s priorities — to make broadband service more accessible to Americans — is unclear.

Also unclear is exactly how accessible high-quality, high-speed Internet service is in Nebraska. One portion of the stimulus plan will help address that by financing a “mapping” of the Internet services available at every address in the state.

The most recent survey of Nebraska Internet services, in 2007, found that nearly every incorporated community had some type of high-speed service. A similar Iowa survey in January 2008 found service available in 94 percent of communities.

But what qualified as “high speed” in both surveys was only 200 kilobits per second (200Kb), which is about 15 times slower than the 3 megabits per second (3Mb) or faster services offered in the largest cities. (By contrast, older “dial-up” services is about 56Kb.)

Those interviewed said true high-speed services was lacking mostly in areas more than three to five miles from a telephone office, although some rural phone companies have strung high-speed cable farther than that.

Customers in those underserved areas can obtain Internet service via satellite or, in some areas, cell phone towers. But those services are typically too slow for demanding applications, such as putting up a Web site, and cost more and have limitations in bad weather.

“It’s really distance-sensitive,” said Mike Hybl, executive director of the Nebraska Public Service Commission, referring to fiber-optic lines that carry high-speed services. Other technologies, such as wireless or satellite Internet, have “twists” of their own, he said.

The Public Service Commission, at the urging of Gov. Dave Heineman, applied for two portions of the broadband stimulus program.

One was a request for proposals to “map” the services available, which is estimated to cost between $1.9 million and $3.8 million.

By 2011, Hybl said, Nebraska residents will be able to access a Web site that will tell them, with a click of a mouse, how many broadband companies serve their homes and at what cost.

Similar “mapping” surveys have been done before, he said, but the new one will provide more detail and set a slightly higher bar for what qualifies as high-speed: 768Kb.

A second grant application from the PSC seeks $500,000 to promote and educate people about broadband services. The University of Nebraska and the Nebraska Department of Economic Development will carry out that grant, Hybl said.

The $4 billion in federal stimulus grants available to telecommunications companies is the first round of funding from the American Recovery and Reinvestment Act of 2009 to expand broadband access.

Wininger, of the rural telephone group, said he sympathizes with rural residents who cannot get true high-speed service. He lives six miles outside Auburn and cannot get it, although he can obtain 3Mb service in Lincoln.

Brian Depew of the Lyons, Neb.-based Center for Rural Affairs said his organization is closely watching how the broadband stimulus program plays out.

Rural areas, he said, need true high-speed service, at least 1Mb or 2Mb, to attract businesses and residents. Depew said he hopes the money is used in areas that lack high-speed service or to improve speeds in poorly served areas.

“We need to keep up with urban areas,” he said. “You need to have higher and higher speeds to fully benefit from the Internet.”

Contact the writer:

402-473-9584, paul.hammel@owh.com

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