The $7.2 billion rural broadband stimulus program, which is to be signed by the president today, is controversial to say the least. This program has taken more ‘arrows’ than General Custer did at Little Big Horn. Criticism has included its alleged inadequacy to properly address the rural broadband challenge to allegations of inefficiency and outright incompetency of the government agencies tasked with managing it. It was even recently called the “cyber bridge to nowhere.” If you listen long enough, you’d think this program is a complete waste of time. But don’t tell that to William Wallace, chairman of DigitalBridge Communications (DBC), a rural WiMAX operator based in Ashburn, Virginia. “We think the broadband stimulus program is great for the country, great for the WiMAX ecosystem, and great for DigitalBridge Communications,” Wallace told us in a recent interview. “DBC is ready to hit the ground running with numerous shovel-ready projects across multiple states.”
DBC sounds motivated. According to Wallace, DBC has a proven model for deploying broadband in underserved rural territories, and the stimulus program is just what the doctor ordered. In addition to building out underserved communities, Wallace says they’re bringing jobs to the local communities they serve, including local home based customer service representatives. DBC also thinks WiMAX is the way to go. “If a significant amount of the broadband stimulus money went to WiMAX, we’d be able to get broadband out to more markets faster,” says Wallace. “We can deliver 5 Mbps now, and expect that to get better as the technology progresses.” Obviously DBC is somewhat biased given their business model is based on WiMAX, but their arguments have some validity.
The idea that this country ‘needs’ to get FTTH to every home in rural America is preposterous. That argument fails to recognize that many homes in rural areas (and urban for that matter) simply don’t need/want FTTH connectivity – not to mention the cost in getting it there. Outside a rural town’s core center, broadband wireless technologies like WiMAX and other 4G technologies should absolutely be part of the equation. Complementing a robust wireline broadband network with broadband wireless connectivity for the most rural part of a community makes good financial and operational sense. As Wallace points out, “… very few low density rural markets work for broadband unless you’re using technologies like WiMAX.” Wireless is the way to go in many instances, but unfortunately, one critical broadband wireless issue – poor spectrum policy – gets lost in the passionate arguments about rural broadband. Rural broadband wireless can’t happen in the many underserved territories where it makes sense because access to spectrum by operators interested in serving those same communities is limited. There are willing carriers, both incumbent wireline and wireless, who would gladly shoulder the rural broadband challenge if they had access to spectrum. All too often, that spectrum is held by entities either unwilling or unable to serve those territories. In fact, if regulators really wanted to positively impact rural broadband, reforming spectrum policy to encourage (or maybe even mandate) spectrum leasing and partnering could have a profound effect.
Wallace believes DBC has the spectrum issue figured out as well. “Service providers and local communities should partner together to obtain spectrum. It’s a model that we’ve been quite successful with. Our Appomattox, Virginia market is a great example of a public-private partnership to obtain spectrum and bring broadband to an underserved community. We now have 30% penetration of that market and expect to go EBIDTA positive soon,” he said. Wallace believes this model could be replicated in many other underserved communities. With the May 2011 deadline for EBS spectrum use looming, Wallace believes “… there is plenty of opportunity and room for service providers, both incumbent and new entrants, to partner for spectrum.” DBC’s efforts have secured spectrum for about 3 million pops, although they haven’t launched service in all those territories yet.
Regardless of all the debate and argument surrounding the broadband stimulus plan and rural broadband in general, DBC plans to move full speed ahead. “We view the stimulus plan as a very strong growth opportunity for DBC,” says Wallace. We agree. The stimulus plan is not perfect and it will not completely solve the rural broadband challenge. But rural service providers should ignore the cynics and view it as a growth opportunity – one that is there for the taking.
