by
Brendon Nafziger, DOTmed News Associate Editor | February 05, 2011
From the January/February 2011 issue of HealthCare Business News magazine
However, T1 lines – copper or bundled glass, fiber optic lines which deliver 1.5 mbps—are often too slow for data-heavy transfers.
And nationwide, there are still obstacles. Anecdotally, the costs of broadband, even mass-market, can be three or four times higher in one part of a state (usually rural) than in another.
The reason for the higher prices is simple: the lower household density in small towns or the countryside drives up costs. The Telecommunications Industry Association, a trade group that represents telecom manufacturers, shared with DOTmed News a report it compiled last year. The report showed, among other things, costs associated with services to a rural town with about 600 people per square mile, and a completely rural area with around 60 people per square mile.
Under some estimates, for a carrier servicing a country town, the free cash flow after 10 years would be $2.7 million. But by servicing the countryside, the carrier gets hit with a negative cash flow --to the tune of minus $9.7 million.
“In rural and hard-to-reach areas, there’s not as much of an economic incentive,” says Danielle Coffey, vice president of government affairs with TIA.
But the government recognizes telecom challenges in the country, which is why the FCC runs its Universal Service Fund. Paid for by charges from long distance calls, this helps spread telephones and telecommunications to areas that otherwise wouldn’t make economic sense for carriers.
And the FCC has plans for broadband. Last spring, the agency unveiled its long-simmering National Broadband Plan, with ambitious goals: as FCC Chairman Julius Genachowski explained it, the aim is to bring 1-gigabit connections to every community nationwide. It also hopes to expand affordable 100 mbps broadband to 100 million households over the next decade.
The FCC also has worked specifically on rural health care. The results, though, have been mixed.
FCC plan, and why it struggled
Last fall, the Government Accountability Office issued a scathing report on the FCC’s 1997 Rural Health Care Program. This plan was designed to fund telecommunications for rural providers, and in 2007, noting it was underused, the agency added a pilot program, to help offset costs for broadband access between rural and urban providers.
On paper, the program seems fairly helpful: it offered to pay about a quarter of the monthly costs for Internet access for rural health providers (and a full 50 percent for the lucky residents of Guam, the U.S. Virgin Islands, the Northern Mariana Islands and Samoa). And the pilot program would cover 85 percent of the costs of laying out broadband networks in regions of the country where they didn’t exist.
