Rural Communities Lay Own Data Pipe for High-Speed Internet


Recommended Posts

Rural Communities Lay Own Data Pipe for High-Speed Internet

By Nancy Gohring

July 31, 2002

http://www.newsfactor.com/perl/story/18825.html

Rather than let the broadband tide pass them by, rural communities in Washington State have taken the matter of high-speed connections to the Internet into their own hands. Kitsap County is the most recent jurisdiction to decide to build its own high-speed network after being bypassed by broadband companies that consider the area too sparsely populated to make service work out financially.

The Kitsap Public Utility District announced yesterday that it has completed laying 52 miles of fiber-optic cables to form what's called a "backbone," a major "pipe" to move data. By the end of the year it expects the backbone to reach 108 miles at a total cost of $4.5 million.

Without fiber, Kitsap workers and residents have been stuck with slow dial-up connections for Internet access. In addition, using dial-up can be costly because the three local phone companies serving the county charge higher rates for calls that span each others' territories.

Boosting the Economy

Area leaders expect the new network to boost the economy in the county. "There's an important link between broadband and economic growth in an increasingly networked economy," said U.S. Rep. Norm ######, D-Bremerton.

The trend in Washington toward public-utility companies building high-speed networks started with a bill backed by Gov. Gary Locke that allowed utilities to get into telecommunications. The bill, passed in 2000, allowed utilities in rural areas to build networks if they wholesale the service to companies that would sell directly to end users.

"The idea was to promote competition on a retail level," said David Danner, executive policy adviser to the governor.

Massive Penetration Rate

The utilities get the money to build the networks from different sources. Kitsap County funded it through property-tax revenue. Grant County used money from electric-power sales, though it couldn't raise rates to fund the fiber network.

The plan to get into telecom appears to have worked particularly well in Grant County. In the two years since the county started building its network, it has drawn 12 Internet service providers (ISPs), two video providers and one telephone company to sell services using the network. So far, 2,600 customers are hooked up out of 6,000 homes that the network can reach -- a 40 percent penetration rate.

"When we first started, we had a business plan that said we'd get 5 percent penetration over the first five years," said Sarah Morford, customer-education specialist with the Grant County PUD.

In Grant County, ISPs offer Internet connections for as little as $17.95 for access that moves data at speeds of up to 1 megabit per second. That compares with $40 to $50 for DSL or cable-modem service in metropolitan areas. Chelan, Douglas, Mason and Benton counties are also building fiber networks.

Challenges Ahead

Kitsap has some challenges ahead of it, though. Unlike the Grant County PUD, the Kitsap PUD is a water utility and doesn't handle electricity. As such, it doesn't control the right to actually extend the fiber network to the doorsteps of businesses or homes.

That means the county is plagued with the same "last mile" problem that forced high-profile fiber companies into bankruptcy in recent years. Those companies built long-haul fiber networks across the great distances that remained largely unused because they didn't actually reach users.

A group representing a variety of Kitsap County organizations met yesterday to discuss the last-mile problem. One option is to create a local utility district, an organization that residents can form as a vehicle for the PUD to collect fees for a service.

Nonprofit Needed

It would be a nonprofit organization owned by the PUD that would handle acquiring the rights to extend the network and build the rest of it, passing the cost on to the companies that buy bandwidth to sell to customers, said David Jones, business manager of Kitsap County PUD.

Another option would be to create a nonprofit public development authority that can build the rest of the network.

The county ultimately could also partner with Puget Sound Energy, the company that markets electricity in the county, to build the last mile. The Internet, however, isn't tied to PSE's core business so it's not likely that the utility will pursue a partnership even in the future, said PSE spokeswoman Dorothy Bracken.

Link to comment
Share on other sites

This topic is now closed to further replies.
  • Recently Browsing   0 members

    • No registered users viewing this page.