Regulatory Uncertainty Weighs on Community Telecom Providers

ARLINGTON, VA – The nation’s small, independent telecommunications providers continue to make significant improvements in the availability of high-speed broadband to rural Americans, but uncertainty arising out of recent FCC reforms has already begun to impede their progress, according to a new survey by NTCA (The Rural Broadband Association).

The "NTCA 2012 Broadband/Internet Availability Survey Report" found that 74 percent of respondents currently offer fiber to the home to some portion of their customer base, up from 64 percent in 2011. Rural consumers also can access broadband at higher speeds: seven of 10 customers of survey respondents can now receive broadband service of up to 6 Mbps. Fifty-one percent can receive service of between 6 and 10 Mbps, and 40 percent can receive service of greater than 10 Mbps. The overall take rate among customers of survey respondents also has improved to 69 percent, up from 66 percent in 2011.

Universal Service Fund Cuts
But survey results also paint a sobering picture of what the next few years might hold for customers of rural telecom providers in the wake of FCC cuts to the Universal Service Fund. Although 61 percent of respondents indicated they expect to be able to provide FTTH to at least half of their customers by year-end 2015, respondents indicated those plans could be put on hold or canceled outright as a result of the commission’s actions. More than three-quarters of respondents cited regulatory uncertainty as a top barrier to broadband deployment, second only to cost concerns.

“It is patently clear that regulatory uncertainty is a major impediment to rural providers and weighs heavily on their minds,” said NTCA economist Rick Schadelbauer. “This uncertainty already is leading some carriers to slow their forward progress by cancelling or postponing planned deployment projects. This is the exact opposite of the intent of the reforms that are causing the lion’s share of uncertainty and fear.”

Limited Access to Premium Video Content
The survey also shows that rural communications providers are finding it increasingly difficult to gain access to fairly priced “must-have” video content controlled by vertically integrated cable providers, such as regional sports networks. One hundred percent of survey respondents cited trouble obtaining video programming at reasonable cost as an impediment to the provision of video services, which has traditionally provided an important method of recovering the cost of broadband deployment.


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