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Arkansas confronts cost of connecting every resident, business with broadband

A legislative panel studying the costs of expanding broadband service to every resident of Arkansas is learning how expensive such an endeavor would be. The heads of telecommunications companies told members of the Joint Committee for Advanced Communications and Information Technology it costs about $125,000 per mile to bury the needed fiber-optic cable to provide high-speed internet in northwest Arkansas. It s more expensive in that part of the state because of the rocky terrain, they said. That s about three times the cost per mile of running fiber in other areas.

Ritter Communications Holdings President Alan Morse said that even though rural providers get government assistance through the Arkansas High Cost Fund1, a charge on state customers cell phone and landline bills that reaps $40 million annually, the costs are still too great in some areas.

The Arkansas High Cost Fund has helped with funding. But the rugged terrain is an added obstacle, Morse told the committee, as reported by Talk Business & Politics.2

The Arkansas Legislature tasked that committee3 last fall to begin studying a border-to-border broadband initiative, giving the group until October 2016 to develop a plan to connect every home and business in the state with high-speed broadband.

Arkansas Confronts Cost Of Connecting Every Resident, Business With Broadband

DEPRESSION-ERA EXAMPLE: State Rep. Stephen Meeks co-chairs a committee studying broadband expansion in Arkansas, and plans to lead debate on the issue in 2017. The committee defines that as a download speed of 25 megabits per second, following the Federal Communications Commission s standard. About half of Arkansans can access broadband now, according to a FCC report.

Members of the committee began meeting with community leaders, particularly in rural areas, in January, with the first meeting at University of Arkansas Community College in Hope. The group also met at the Southeast Arkansas Education Service Cooperative in Monticello in February and at Arkansas State University in Jonesboro in March.

(Read synopses of the meetings in this report, beginning on page 15 of the PDF file.)4

They ve heard a story that s common in the South: there aren t enough homes and potential customers on rural roads and highways to make fiber-optic installation cost-efficient, and many of those residents are increasingly reliant on wireless technology for internet. While large-scale government broadband efforts are picking up pace around the country, particularly in the rural South, such studies are relatively new in Arkansas so new that two of the state s free-market oriented think tanks haven t examined the issue closely yet. That s bound to change, though, after the committee reports back to the legislature.

Committee co-chair Rep. Stephen Meeks, R-Greenbrier, has compared the initiative to the 1930s efforts that helped expand electric and telephone service across the state, and plans to open debate on the issue in the 2017 legislative session. Meeks and several other members of the committee didn t return Watchdog.org s requests for comment this week. Greg Kaza, executive director of the Arkansas Policy Foundation, said that while he hasn t studied the issue of government-backed broadband extensively, he believes that s an issue better solved by private providers.

Generally these decisions should be left up to markets and those operators in those markets, he said. They know far more about the allocation of capital than government policymakers.

Representatives from the Advance Arkansas Institute say they also have not yet focused on the issue of broadband expansion. Speaker of the House Jon Eubanks suggested public-private partnerships may be the solution.

A news release from the Arkansas Senate5 references the meeting in which Eubanks and Senate President Pro Tem Jonathan Dismang, both Republicans, charged the committee with the study, and includes snippets of conversation from the discussion.

While encouraging the development of greater access to the internet in rural areas, at the same time legislators must be careful that new government incentives are fairly applied, the release says. Legislative decisions should not distort the workings of the market place in determining the most cost-effective method of providing broadband.

References

  1. ^ Arkansas High Cost Fund (www.apscservices.info)
  2. ^ as reported by Talk Business & Politics. (talkbusiness.net)
  3. ^ The Arkansas Legislature tasked that committee (www.arkansas.gov)
  4. ^ (Read synopses of the meetings in this report, beginning on page 15 of the PDF file.) (www.stc.arkansas.gov)
  5. ^ A news release from the Arkansas Senate (www.arkansas.gov)

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