rural broadbandFive rural telcos have worked together to propose a pilot program to improve broadband adoption among low-income Americans in rural areas. With the assistance of the National Telecommunications Cooperative Association (NTCA), the carriers have filed an application with the Federal Communications Commission for program funding. Rural telcos participating in the application include three Illinois-based companies — Adams Telephone Co-operative, Madison Telephone Co. and Mid Century Telephone Cooperative – as well as Iowa-based Alpine Communications and New Mexico-based Leaco Rural Telephone.

With plans underway for transitioning today’s voice-focused high-cost Universal Service fund to focus on broadband, the FCC also is contemplating a similar transition for the low-income Lifeline portion of the Universal Service program. Back in January, the FCC announced plans to free up funding for a pilot broadband low-income program through modifications to the Lifeline program and tighter control of disbursements.

In April the commission announced that it would make $25 million available for the pilot program. The commission said that any pilot program proposals should not simply focus on affordability but should also include a plan for increasing digital literacy.

The proposal from the rural telcos appears to address both of these goals. According to a release issued Tuesday by the NTCA, the application includes a plan to work with the non-profit organization Connected Nation to provide low-cost computers to consumers who complete free online digital literacy training.

In addition, the applicants propose to examine “how and to what extent broadband adoption by low-income consumers in rural areas might be driven or deterred” by various service and price packages. Among the options to be tested are flat and sliding scale discounts, as well as stand-alone broadband offerings and bundled voice and broadband services at various data rates.

According to the NTCA release, the plan calls for providing as much as $400 per eligible consumer over the program’s 12 months. The rural carriers estimate that as many as 1,000 low-income consumers in the five companies’ service areas could participate in the program.

An FCC spokesman said the commission received about 20 applications to the broadband low-income pilot program, which were due Monday. At press time the applications had not yet been made publicly available.

But other service providers that might be interested in participating include Comcast and CenturyLink, both of which were required to offer discounted broadband service to low-income customers as a condition of recent merger approvals. The Comcast program has mushroomed since its inception and several other cable companies are now participating in the Connect2Compete program, which was based heavily on Comcast’s program.

The FCC spokesman said the commission hopes to make awards soon.

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8 thoughts on “Rural Telcos Pursue Low-Income Broadband Pilot Test

  1. Thats the trouble with programs like this. Well intenioned for sure, but hardly moves the needle. Only 1000 participants from 5 companies. By my math, if every rural telco did the same thing, you would only affect about 200k people. Just a drop in the bucket …

    1. So, does that mean we should ignore rural America? Maybe we should be filling the bucket drop by drop, instead of trying to figure out how to fill the bucket all at once. The FCC is already emptying the bucket with one pour.

    2. Keep in mind that this is only a pilot program, designed to allow the FCC to gather data on the most efficient means of utilizing funds to encourage broadband adoption up the road. As such, it is intended to be a small scale program ($25 million over 12 months is just north of $2 million per month.) The full scale program is in the near-term future…

  2. @guest. I’m on your side. I guess i just would like to see bolder ideas from our leaders to solve this problem. I fear they do stuff like this and then wash their hands of it, without the real problem being solved.

    1. Not sure I would call NBB bold. Isn't that the plan that called for 4 Mbps broadband for rural America. I don't think you could get any further from bold than that.

  3. One area where I think programs like this should focus on is the use of tablets vs PCs. Tablets are game changers and I think if non-broadband users are introduced to broadband via a tablet, rather than a PC, they will be more apt to recognize the value of broadband. Tablets are cheaper than PCs (not the iPad, but the Kindle Fire, Nexus 7, both of which are $200), they are mobile, and they are more intuitive. The PC/Laptop is so 20th century 🙂

  4. The FCC estimated it would free up $200 million from the voice-focused Lifeline/Linkup program for broadband. The pilot is using about 12% of that. And if the rural companies are chosen to participate, they will likely be only one of multiple participants. If all of the Lifeline/Linkup dollars are eventually transitioned to broadband, the funding available would be even bigger. But you've got to start somewhere. I think it's a good idea to get the industry involved in decisions like this. It's important to keep in mind though that total funding would be for low-income people nationwide, not just in rural areas.

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