$7.2 Billion Plan to Wire Rural America Holds Promise, Pitfalls

[Source: ChicagoTribune.com, By Rebecca Cole - February 22, 2009]

In Martin County, Ky., a remote corner of Appalachia, it can take hours to reach a distant doctor's office, a simple cholesterol check costing a miner a day's work.

"It's a long way from an office building to the mine," says Dr. Raymond Wells.

So amid the secluded mountains and hollers where President Lyndon Johnson announced his war on poverty, Wells, who has practiced medicine in the coal fields for 40 years, has brought medical care to the mine, serving 1,115 people where they work with a nurse practitioner on-site and the physician holding high-speed Internet videoconferences with patients.

Now, with $7.2 billion of the $787-billion federal economic stimulus set aside to expand the reach of broadband service to rural areas, Kentucky stands as a model of how the Internet can alter the lives of workers and small businesspeople alike, but also a lesson in the challenges of connecting far-flung corners of America.

From this Kentucky mine-clinic to a clothing store in Dresden, Tenn., peddling overalls online and an artisanal cheese maker in California's San Joaquin Valley, high-speed Internet access is changing the way people in rural America do business.

Fifty-five percent of all Americans already have broadband access at home, up from 47 percent in 2007, according to a July 2008 Pew Internet & American Life Project report. The study also found that 38 percent of rural Americans have broadband at home, an increase of 23 percent from the previous year.

Congressional leaders and the White House now hope that a wired-up "e-infrastructure" reaching all corners of the country will create new jobs and stimulate economic growth.

In 2004, Kentucky set out to build a statewide broadband network. In conjunction with ConnectKentucky, a nonprofit organization that leverages partnerships between state government and broadband providers, the state has significantly increased broadband availability, spending about $7.5 million on the project.

ConnectKentucky claims that 95 percent of all Kentuckians—546,000 new households—now have high-speed Internet access, up from 60 percent. The organization points to a detailed map of broadband availability showing cable, DSL, wireless and satellite services down to the census-block level as evidence.

The map is compiled from 88 different service providers, according to Brian Mefford, former head of ConnectKentucky and now chairman and CEO of ConnectedNation, a national offshoot based in Washington, D.C. But the organization keeps details about providers as a proprietary and closely held secret.

This has set off alarms for some industry experts, who question whether entities such as ConnectedNation are acting as shills for preferred partners and carriers. Art Brodsky, communications director for Public Knowledge, an advocacy group in Washington, D.C., focused on the emerging digital culture, questions ConnectKentucky's assertion of nearly 100 percent broadband penetration.

"Carriers should be required to submit the data that the states want, not have it be tucked away in some black hole," Brodsky said. "The map isn't transparent. There's no information about competing carriers and their rates. The data just cannot be verified."

Brodsky's proposed alternative is to have the states, not a third party such as ConnectedNation, manage a more ambitious broadband rollout. But this may prove difficult. Faced with a pile of money that must be spent in a short amount of time, states already are turning to ConnectedNation for help in replicating its model.

Mefford calls the key to success a focus on both demand and supply. His group encouraged consumers to adopt broadband in their communities while persuading telecommunications and cable companies to serve areas where they may not have seen investment potential.

"Kentucky served as a great microcosm for the broadband challenge across the country," Mefford said. "Suddenly areas that were underserved or overlooked became a thriving community."

Wells' mobile health program now has a total of four nurse practitioners serving Alliance mines in Illinois, Indiana and two in Kentucky. With each seeing up to 30 patients a day, Well holds a video conference with four or five patients at each location daily.

"At this point, we're so happy about it, we want to keep expanding it," Wells said. "We've caught things like prostate cancer and saved lives."

For retailers, a broadband connection means that sales are no longer simply local.

In Dresden, Tenn., where E.T. "Pap" Reavis opened his clothing shop on the dusty corner of Wilson and Main in 1895, his great-grandson, Tom Reavis, sells bib overalls, jeans and ladies' clothing to customers as far away as Alaska and Hawaii. Today, the majority of E.T. Reavis & Son's business is online.

"All of the box stores had run the small independents out," Reavis said. "This was a way we could keep going."

Three years ago, Bravo Farms in California added an online store to sell artisanal cheeses, nuts and gift baskets. Although the store draws significant foot traffic with a visible spot on Route 99, daily online gift-basket sales run in the hundreds during holidays.

"With the world of Google now, customers are finding us and ordering online," founder Bill Boersma said. "We're not making it our bread and butter yet. The hard part is putting on the jam."

Part of the "jam" is the adoption of broadband.

Technological literacy often is a barrier to rural residents taking full advantage of the digital economy. Included in the stimulus is $250 million for "innovative programs that encourage adoption." Yet that is not spelled out, making it more appealing for states to hire a turn-key operation such as ConnectedNation—with a potential blank check.

Even Kentucky still finds this a challenge.

Although the state moved up several rankings—from 42nd to 33rd—in the addition of IT jobs, according to a December 2008 report by the Information Technology and Innovation Foundation, it still is ranked 43rd in broadband access and speed.

The median download speed for computer users in Kentucky is 1.8 megabits per second, slower than the national median of 2.3 mps. The U.S. speed still is dramatically slower than in Japan, where a median speed of 63.6 mps allows a typical user to download a full-length movie in two minutes.

"There's so much more to do in Kentucky and any other state," Mefford said. "We still have way too many people who aren't using what's available. It's incumbent upon us to ensure the technology is available and that it's being used the right way."