^{Democracy & Technology Blog} Broadband is coming to a rural area far from you

A small rural community in Western Oregon has a communications network that is far more advanced than most American cities, with IPTV available to every resident. So reports Bobby White, who profiled Monroe Telephone Company and its president, John Dillard, in today’s Wall Street Journal. Dillard participated in a conference on universal service reform sponsored by the Discovery Institute earlier this year, where he shared ideas for making universal service more efficient and sustainable — ideas that do not exactly place Dillard in the small company maninstream.
Dillard’s investment in IPTV is part of a small company trend. White cites an industry analyst who estimates there are 313,000 IPTV subscribers in the U.S., 95% of whom subscribe through a “rural telephone company” — including Monroe Telephone Co.
Why does this happen? Sure, as the article notes, an RTC like Monroe Telephone Co. can access guaranteed loans through the USDA Rural Utilities Service. These loans are not available to large or mid-size carriers, but those companies have other available sources of capital.
The big reason is outdated regulation. There are 33,000 cable franchise authorities in the U.S., and RTCs usually only have to contend with one. It might have helped that Dillard is a leading citizen and former mayor of Monroe. But in this case, Monroe Telephone Co., which was already providing cable tv service before it retrofitted its network to provide IPTV, had a franchise to begin with. Larger carriers have to negotiate with hundreds or thousands of cable franchise authorities — a process which is both expensive and time-consuming. Each negotiation can take a year or more and typically resquires concessions that have nothing to do with communications services. There is bipartisan support for proposals before Congress which would fix this problem, but they are languishing.
See: “Tech’s Cutting Edge? Try a Tiny Town,” Wall Street Journal, July 27, 2006; Page B1