Small, independent telecommunications providers continue to make strides in providing high-speed broadband to rural Americans, according to a recent report from NTCA–The Rural Broadband Association. Still, the telcos struggle with high infrastructure costs and regulatory hurdles.
The report was based on a spring 2017 online survey that asked NTCA members questions about their current operations, competition, marketing efforts, and current and planned fiber deployment. Results are based on the 29 percent of the 172 members that responded.
Fiber by the numbers
While 100 percent of the survey respondents offer broadband to some part of their customer bases, only 52 percent provide fiber to the home for at least half their customers. Another 24 percent of respondents serve 20 percent or fewer of their customers with fiber to the home. Nine percent offer fiber to the node.
Respondents predict these rates will climb over the next few years. Most say they have a strategy in place to deploy more fiber infrastructure by the end of 2019. Of the 82 percent of respondents who say they have a plan in place:
- 39 percent say they plan to offer fiber to the node to more than three-quarters of their customers during that time frame.
- 66 percent plan to offer fiber to the home to at least half their customers in that time.
- 31 percent have already completed fiber deployments to all customers.
Most customers fall somewhere in the middle when it comes to broadband speed, survey respondents say, even when higher speeds are available. The survey found that nearly a quarter of respondents’ customers choose broadband speeds between 10 and 25 Mbps. The next most popular level of service is more than 25 Mbps, followed by 6-10 Mbps.
Bringing in more fiber lines is expected to happen, but it won’t be easy, respondents say. Many cite infrastructure and equipment costs and existing or uncertain regulatory rules as the biggest barriers to the widespread deployment of fiber.
In addition, rural telecoms face the age-old problem of large service areas along difficult terrain that offer few potential customers. Of the customers that are there, some might be unwilling or unable to pay the high costs needed for telecoms to receive a return on their investment.
Respondents say other problems with implementing fiber include: long loops, obtaining financing, fiber-order fulfillment delays, and obtaining cost-effective equipment. Competition with other companies is also an issue in some regions.
Considering the costs
Most respondents say deploying more fiber would cost well into the millions. Nearly a third of the survey’s respondents estimate it would cost between $1 million and $10 million in additional capital investment to bring all of their customers currently receiving service below 25 Mbps up to that speed.
An additional 27 percent could do so for between $20 million and $50 million. Twenty-one percent say it would take about $10 million to $20 million, and 18 percent say it would take $1 million or less. Another 7 percent say it could take more than $50 million.
Still, respondents say many customers are steadily moving up to faster broadband speeds, and companies need to be prepared. This year, 17 percent of respondents’ customers subscribed to broadband service in excess of 25 Mbps, versus only 8 percent a year ago.
Several survey takers say more grants and fewer regulatory restraints are needed in response to the need for faster broadband speed increases. This would ensure that the country’s rural consumers have comparable services as their urban neighbors.