Rural broadband a ‘necessity' -
Published Thursday, May 19, 2011 at 12:01 am / Updated at 9:58 am
Rural broadband a ‘necessity'

DILLER, Neb. — In this small town southwest of Beatrice, companies like C&C Meats are thriving on the trickle of broadband that connects them to the outside world.

Back in Washington, D.C., politicians have used C&C Meats as an example of the impact that barely adequate high-speed Internet can have on businesses in rural America.

The small Midlands towns once built on railroad tracks and paved highways now need a new kind of infrastructure to carry them through the 21st century and beyond.

Without adequate Internet speeds, small businesses will stagnate or crumble, as will rural economies, leaving residents with little choice but to move to larger cities and urban areas.

On Wednesday, Julius Genachowski, chairman of the Federal Communications Commission, was among a delegation from Washington that visited C&C Meats and its owners, Chad and Courtney Lottmen.

Genachowski, who came to the state at the request of Rep. Lee Terry, is leading the movement to expand broadband access and overhaul the Universal Service Fund.

The fund, which is administered by the federal government, contains $8 billion that is used to provide reasonably priced telecommunications services to all U.S. citizens.

Currently, all telecommunications companies that provide service between states — including long-distance and local telephone companies, wireless telephone companies, paging companies and pay phone providers — are required to contribute to the fund, as are carriers that provide international services.

Genachowski said Wednesday's visit showed that broadband is no longer an optional service only for the affluent. It's a prerequisite for business success everywhere, he said.

“What we saw today convinces me that we need to succeed” with broadband expansion plans, Genachowski told The World-Herald in an interview.

“The problems keep getting worse and the challenges keep getting greater ... and the digital divide isn't shrinking,” he said. “It's gotten to the point where more and more people across the country, including rural America, realize that (broadband) is not a luxury, it's a necessity.”

C&C Meats, Genachowski said, is a perfect example of what even an adequate Internet connection can do for a company.

Since 2001, when C&C got a low-level broadband connection from the Diller Telephone Co., business has thrived and its workforce has jumped from 11 employees to 29.

Diller Telephone serves 760 people in that town and surrounding rural communities.

The broadband connection allowed the Lottmens to build a website to enhance the company's marketing and e-commerce efforts. The website alone has attracted private-label meat producers from Maryland, Colorado and Oklahoma, who have contracted with C&C Meats to prepare, package and label their products.

Without the broadband connection and without the website, C&C would be a fraction of what it is today, Chad Lottmen said.

“If I had to guess, I would say the business would probably be half of what we are today without our broadband connection,” he said. “The business would still be here, the question is whether I would be or not. Because without it, if we wouldn't have seen that growth, I probably would have moved on, being an aggressive businessman.”

In surrounding communities, like tiny Liberty, Neb., with a population of about 85, people crave the kind of access Lottmen has.

The difference between the broadband availability in Diller and the lack of access in Liberty is an example of what Genachowski calls the “rural divide,” or the discrepancy in Internet access.

“To me, the most significant learnings from the day were, hey, broadband can really make a difference in rural America and help people grow small businesses, create jobs, support education and health care,” he said.

“And that there's a real rural divide. It couldn't have been more vivid today.”

During the visit to Diller and Liberty, Genachowski, Terry and Rep. Adrian Smith, also a Nebraska Republican, toured C&C Meats' meat processing and sausage production facility and Diller Telephone Co.

To illustrate the kind of money it takes to serve broadband customers, Loren Duerksen, director of operations for the telephone company, said the switching room alone has about $750,000 in equipment. That translates to about $1,000 per customer, he said.

“The numbers are telling, but if we can't supply broadband, Chad wouldn't be in business,” Duerksen said.

According to Genachowski, between 20 million and 25 million Americans don't have even a basic broadband option in their communities. And millions more have just one or limited options.

Additionally, deployment of in-ground wires and fiber-optic cables, and wireless infrastructure, is much too slow, he said, and adoption rates are moving at, well, dial-up speeds.

“On the deployment side, the farther you get out the harder it is,” Genachowski said. “On the adoption side, wireless is helping. More people are connecting through cell phones, but neither of the numbers are moving as fast as we would like.”

According to figures from the FCC, more than 300,000 Nebraskans, or 18 percent of the state's population, lack basic access to a high-speed broadband connection.

Nationally, from 5 percent to 10 percent of people, on average, don't have broadband access, according to the FCC.

Terry, who serves on the House Energy and Commerce Committee, said a Universal Service Fund overhaul — to focus expenditures on broadband expansion rather than telephone service and to cut waste — is a complicated matter that Congress and federal agencies and administrators must tackle.

“If it was easily solvable, we would've (overhauled USF) eight years ago,” Terry said. “What we agree on is that the old laws don't really work in a 21st century, technology-driven economy.

“But how we get the money focused on those that are seven, 15, 20 miles away from a carrier — that's where the real problem lies. And we're working through a lot of solutions, but where do we get that money? Who do we get that money from?”

Genachowski said the country must answer those questions quickly in order to give all Americans access to the modern version of utilities that supported citizens and businesses in the past.

“The role that high-speed Internet plays is very similar to the role that telephone service and electricity used to play,” he said. “We just have to drive that up to create the kind of jobs and grow the kinds of businesses we saw here today.”

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