Wsu digital center overview
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WSU Digital Center Overview. Goals Speed deployment of telecommunications infrastructure to rural and under served urban communities Increase use of advanced telecommunications technologies to achieve economic, civic and social benefits Services Applied policy research

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WSU Digital Center Overview

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Wsu digital center overview

WSU Digital Center Overview

Goals

  • Speed deploymentof telecommunications infrastructure to rural and under served urban communities

  • Increase use of advanced telecommunications technologies to achieve economic, civic and social benefits

    Services

  • Applied policy research

  • Community outreach

  • Demonstration projects


Rural telecom challenges

Rural Telecom Challenges

  • Rumored RBOC farm sale—crisis or opportunity

  • Affording Nordstrom quality on a lumberjack’s budget

  • Starbucks, microbrews, CLECS and other essential providers not in rural America


The rboc farm sale the business case for divestment

The RBOC Farm Sale—the business case for divestment

  • Strategic need to direct capital to urban markets

  • Limited access to high cost subsidies

  • Elimination of implicit subsidies within access

  • Comparative business advantage of “boutique” rural providers


The rboc farm sale the opportunity

The RBOC Farm Sale-the opportunity

  • Approximately three-quarters of nation’s rural lines served by RBOCs

  • Sold properties often in need of rehabilitation

  • Divestitures typically produce $100 to $200 dollars per line new investment

  • Will regulatory and public policy infrastructure be prepared for large scale divestiture?


The rboc farm sale the need

The RBOC Farm Sale-the need

  • Sufficient, explicit and portable subsidies targeted to rehabilitation of rural properties

  • Consider rate-of-return regulation on a transitional basis

  • Regulatory capacity to deal with potential large scale divestment


Nordstrom tastes

Nordstrom Tastes

  • Section 254 (b) of federal telecommunications act

    • Preserve and advance universal service

    • Comparable service mandate

    • Modern infrastructure for all Americans

  • Essential Nature of Advanced Service infrastructure

    • Jobs

    • Education

    • Health care

    • Civic participation


Lumberjack s budget

Lumberjack’s Budget

  • High cost of serving rural areas

  • Low incomes

  • Expanding line charges

  • Public resistance to more subsidies


Nordstrom on a lumberjack s budget easing the pain

Nordstrom on a Lumberjack's Budget—easing the pain

  • Calculate universal service on the broadest base possible

  • Careful targeting of subsidies through tax credits, grants and loans

  • Support business case for investment through demand aggregation

  • Remove barriers to competitive provision when appropriate

  • Public/private partnerships


Why starbucks microbrews and clecs are not in rural america

Why Starbucks, Microbrews and CLECs are not in Rural America

  • Specialize product offering

  • Limited customer base, low relative return, high cost of entry

  • Difficulty of operating remote facilities

  • Skepticism of capital market

  • High legal/administrative cost of accessing subsidies


Clec success in rural america exceptions which demonstrate the rule

CLEC Success in Rural America—exceptions which demonstrate the rule

  • Western Wireless; McLeod USA; RLEC on RBOC competition

  • Successful rural CLECs boutique operators with focused rural business plan

  • Patience and capacity to deal with high legal and administrative costs

  • Experience in operating remote facilities

  • Acquisition still entry strategy of choice for new players in rural markets


Improving the clec rural businesses case

Improving the CLEC Rural Businesses Case

  • Recognize state commission responsibility with respect to rural entry

  • Replace implicit with explicit and portable subsidies

  • Community education on competitive options

  • Education of capital markets

  • Remove barriers to appropriate strategic alliances


Summary

Summary

  • Potential RBOC property sales will change rural telecommunications landscape

  • Continued pressure to expand rural access to advanced services

  • The universal service goals achievable, but require subsidies

  • Successful deployment of advanced services can help minimize need for longer term subsidies

  • Need to be realistic regarding near term CLEC deployment to rural America


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