[1st-mile-nm] Taos Broadband

[Richard Lowenberg]

Taos broadband network nearly done, but what’s the cost?

http://www.santafenewmexican.com/news/local_news/taos-broadband-network-nearly-done-but-what-s-the-cost/article_08d47beb-85e1-5456-8a9a-9e06669dadb8.html

Posted: Saturday, April 4, 2015 7:00 pm

J.R. Logan
The Taos News | 4 comments

TAOS — Right now, residents of Las Vegas, N.M., can get 20 megabits-per-second Internet service for $69.95 a month. If you live in northeastern Oklahoma, the same price will get you a 50 mbps connection. And folks in central Missouri are actually looking at 100 mbps service for 10 bucks cheaper.

But if you want access to Kit Carson Electric Cooperative’s brand-new fiber network at your house, $69.95 a month gets you 10 mbps.

Access to high-speed Internet — especially in rural America — is notoriously inconsistent. And so are costs to get online. But as Kit Carson Electric Cooperative nears completion of its fiber network, its current pricing is above industry standards, even for Podunk, U.S.A.

“That sounds a little high to me,” said Sharon Strover, a professor in the College of Communication at the University of Texas at Austin and an expert in rural broadband policy, when told about Kit Carson’s advertised cost of $199.95 for 20 mbps for business access. “On the face of it, $200 doesn’t sound very good.”

By comparison, the same download speed in Las Vegas, N.M., is $70 from Plateau Telecommunications and $80 from Guadalupe Valley Electric Co-op in relatively rural central Texas.

Strover is quick to point out that it’s very difficult to compare apples to apples when discussing Internet pricing. Download speeds and upload speeds vary, and several providers often bundle Internet access with phone and TV packages.

But in general, rural broadband access is, of course, more expensive than in urban areas, Strover said. That fact was at the heart of the federal government’s effort to spur broadband expansion to rural communities.

A few years back, Kit Carson was among a batch of awardees that got generous grant and loan packages under the federal stimulus program to expand superfast Internet to places for-profit companies were unlikely to approach. The co-op got a $45 million grant and $19 million loan to bring fiber-optic service to every customer it serves.

Strover said she was invited to be part of the stimulus program that put federal money in the hands of companies like Kit Carson. She came on board after the program had been developed, and she said the emphasis was primarily on getting the networks on the ground.

“They were really intent on getting the infrastructure out,” Strover said. “The whole issue of what you charge people later, I don’t think that was even asked in grant proposals.”

“My guess is that it wasn’t an issue,” Strover added. “These were businesses, and they assumed people knew how to run these businesses.”

While pricing may not have been set in stone, Brett Kilbourne, vice president and deputy general counsel for the Utilities Telecom Council, said co-ops getting into the broadband game has generally proven to be very good for consumers.

“Some of the co-ops have been able to do it at price points that are pretty darn reasonable,” Kilbourne said. “The number one reason is co-ops tend to be very community-focused. They’re not as driven by profit as private entities.”

Co-ops like Kit Carson, Kilbourne said, are better positioned to serve out-of-the-way customers. Stimulus grants like the one awarded to Kit Carson subsidize the expense of taking fiber-optic networks to such customers. But even with that help, Kilbourne said, building a fiber network from scratch is expensive, and that will likely be reflected in the access costs.

But what good is millions of dollars in infrastructure if it’s too pricey for the average resident?

As part of a pitch to drum up support for its grant/loan application, Kit Carson committed to offer “low cost service options.”

“For decades, rural communities, Native American tribes and local governments in this area have struggled to negotiate access to telecommunications services, infrastructure, connectivity and affordable rates from the small number of incumbent carriers that dominate the market,” the proposal reads.

While its prices may still seem steep, the new fiber network appears to be impacting for-profit competition already. CenturyLink, for instance, is offering the fastest speeds it can give a customer for $29.95 a month for 12 months. But CenturyLink’s DSL network is limited, and doesn’t extend very far into less populated parts of the county.

Kit Carson CEO Luís Reyes acknowledged that pricing broadband is “really more of an art than a science,” and he expected the co-op’s prices to change dramatically in the coming months.

The co-op is the exclusive provider on the new network at the moment. Reyes said that’s because he wants to ensure the system is airtight before letting other companies connect. When and if they do, it’s possible that competition will drive down prices, though it’s up to Kit Carson to determine wholesale costs for its competitors.

While parts of the fiber network are online, Kit Carson Telecom (a co-op subsidiary) still relies on a fiber-optic cable owned by CenturyLink to reach the rest of the world. The co-op expects to make two other connections — one to the south and another to the north — that will give it additional options for buying bulk bandwidth. Those options, says Reyes, will likely be cheaper, and the savings can then be passed onto the consumer.

“Once we get to the bigger hubs, we can get bandwidth real cheap,” Reyes said.

Reyes also said major institutions like governments, schools and hospitals are being targeted now, and those large accounts could defray costs for regular consumers as well.

Still, the reality for the co-op is that it will probably charge a consumer in Amalia the same for Internet as it does someone who lives in Taos. That means the customer in Taos is helping cover the cost of the fiber-optic cable it takes to get the Web to the northern county.

“We’ll be in the middle [on pricing] because we do have to serve a diverse group as far as Costilla and Ute Park,” Reyes said. “When you blend that pricing, it’s going to be a little higher.”

But, Reyes says, that’s always been the spirit of the co-op model, and it gives the co-op access to places that would otherwise go unserved entirely.

One notable change to be enacted since the construction of the network began was a redefining of “broadband.” In January, the Federal Communications Commission raised the official threshold for broadband speeds from 4 mbps to 25 mbps. Based on that change, none of Kit Carson’s current advertised speeds technically qualify as “broadband.”

Reyes said the current offers are preliminary, and updated packages with faster speeds will be advertised in the coming weeks.

But he also pointed out that for a lot of Taos County residents, any access to the Internet is better than the status quo.

“They just need access,” Reyes said. “Anything more than dial-up is broadband to them.”


This article first appeared in The Taos News, a sister newspaper to The New Mexican.


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Richard Lowenberg, Executive Director
1st-Mile Institute          www.1st-mile.org  
P. O.  Box 8001, Santa Fe, NM    87504
505-603-5200                 rl at 1st-mile.org
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