TMCnews Featured Article


May 13, 2010

Rural Broadband Penetration Sees Annual Double-Digit Growth

By Paula Bernier, Executive Editor, IP Communications Magazines


Broadband penetration in rural markets has seen double-digit growth in the past year as regional providers capture an increasing share of the market in these areas, according to digital measurement firm comScore Inc.

"The recent announcement of the government's national broadband plan demonstrates the increasing importance of broadband expansion as a country-wide initiative, with rural areas playing an important role in this expansion," said Brian Jurutka, comScore (News - Alert) senior vice president. "Although rural markets have witnessed significant increases in broadband penetration during the past few years, these areas still lag behind the penetration rates of metropolitan areas. As the primary drivers of rural broadband growth, regional ISPs have the opportunity to increase their market share by delivering broadband to the millions of households still relying on dial-up services."

Broadband penetration in rural markets reached 81 percent in the fourth quarter, according to the firm, which reports this is an increase of 13 percent.

The firm also called out the fastest growing ISPs in rural areas. For example, in Maine, TDS Telecom saw a 101 percent increase in households with broadband, according to comScore. Meanwhile, Arkansas Windstream (News - Alert) Communications reported a 57 percent gain, according to comScore.

The digital measurement firm identifies GCI and Bresnan Communications as the leading service providers in the country's three most rural markets based on population density. GCI (News - Alert) owns 61 percent of the broadband market in Alaska. Bresnan Communications, meanwhile, has 56 percent in Wyoming and 52 percent in Montana.

As noted in INTERNET TELEPHONY's May cover story, the federal government's broadband stimulus effort - for which most of the first-round winners have now been named and for which the NTIA and RUS are now reviewing second-round applicants - is helping to move rural broadband forward. However, the National Broadband Plan will provide a longer-term push to make broadband more widely available, even to rural areas.

In The National Broadband Plan the FCC (News - Alert) lays out its "100-squared" initiative to bring 100mbps downstream access to 100 million homes. However,  the universal broadband  goal is to facilitate the delivery of 4mbps downstream and 1mbps upstream "actual speeds" by 2020. The FCC also aims to implement a program to ensure no state lags significantly behind the 3G wireless coverage national average.

The FCC in the national plan also calls for the creation of the Connect America Fund to support the 4/1mbps effort, and the establishment of a Mobility Fund related to the above-noted 3G goal.

According the commission, the Connect America Fund could get at least part of its money from the Universal Service Fund. The FCC in the National Broadband Plan suggests that $15.5 billion over the next decade should be shifted from the USF to the CAF. The commission also gingerly notes that Congress might consider allocating additional public funds for broadband.

"If Congress wishes to accelerate the deployment of broadband to unserved areas and otherwise smooth the transition of the Fund, it could make available public funds of a few billion dollars per year over two to three years," the FCC writes in the National Broadband Plan.




Edited by Marisa Torrieri