Texas considers ways to make broadband technology available to all - city or country

02/20/2001

By Jim Landers / The Dallas Morning News

WASHINGTON – First it was the railroads. Then it was the interstate highway system. One farming hamlet would be on the corridor to commerce, while others ate their dust.

Today it's the fast lane to the Internet that has rural communities worried.

Auto dealers complain about the hours spent downloading specification manuals for new cars that manufacturers will no longer put in the mail. Business boosters in Kenedy, Texas, say three companies looking to relocate kept on going because the latest in telecommunications technology was not available.

"For a community to provide this kind of service ... is no guarantee that you're going to have economic development. However, if you don't have it, you're guaranteed those prospects are going to go somewhere else," said Claiborn Crain, a spokesman for the Agriculture Department's Rural Utilities Service.

The Rural Utilities Service is lending $770 million to rural broadband providers this year. Congress, after two years of study, is weighing a bill that would give those companies tax credits for as much as 20 percent of their investment.

The Texas Legislature is poised to take up a package of incentives its sponsors hope will make broadband available throughout the state within 15 months.

Regional telephone companies such as SBC Communications Inc. and Verizon Communications Inc. are urging Congress to let them run their high-speed Internet service across state lines, with rural service as one of the dividends.

SBC and Verizon were compelled by regulators to extend their high-speed service in some rural areas last year as a condition for merging with other companies.

SBC subsidiary Southwestern Bell's Project Pronto promises to make high-speed digital subscriber line service available to 80 percent of its rural Texas customers within 18 months.

Countryside broadband service is also emerging in unexpected ways. And some of the early sellers fume that tax breaks, federal loans, subsidies and other government lures aren't needed.

That's the way Larry Anglin sees it. Mr. Anglin, 37, is a native of Hamilton, Texas, who went off to engineering school at the University of Texas and stayed in Austin to make a pot of money in the Internet business.

He cashed in his stock options and went home to Hamilton to raise his children and start his own company. Hometown Computing now has 10,000 Internet service customers. Since late August, Mr. Anglin has signed up about 50 of those customers for high-speed Internet service. His technology is fixed wireless that uses the free spectrum of the airwaves. Any home or office in Hamilton, Stephenville, Clifton or Gatesville that has the town water tower in its line of sight is a potential customer.

"We provide the local government free high-speed Internet access, and they provide us access to the water tower for our antenna," Mr. Anglin said.

Hamilton County residents raised funds for a CAT scan machine for Hamilton General Hospital, and then realized hiring a radiologist would cost more than the machine itself. So Hometown Computer provided wireless broadband and T-1 high-speed telephone line access to the Internet. The hospital's CAT scans are now read by radiologists in Nashville, Tenn.

"Hundreds of ISPs are doing this across the country," Mr. Anglin said. Some of the initiatives before Congress and the Legislature are "taking my tax money to entice my competitors to serve a market they would otherwise ignore."

Texas Public Utility Commission Chairman Pat Wood III and House Rural Caucus Chairwoman Rep. Judy Hawley, D-Portland, approach this problem with a similar skepticism about the need for taxpayer subsidies.

Where there's an entrepreneur willing to meet the demand, go for it, Mrs. Hawley said. "Where that's not enough, let the community aggregate itself so it becomes more attractive for the guy in Hamilton to come in and do it. And when that's not enough, the community has to ask, what else do we have to put on the table? What incentive will do it?"

Demand isn't great yet anywhere in Texas for high-speed Internet access. While 60 percent of the households in the state now go online, most seem satisfied with dial-up modems.

The PUC sent a report to the Legislature last month noting a University of Texas study where 80 percent of Texans using the Internet said they were satisfied with their connection speeds. Whether rural or not, about the same percentage (15 percent to 17 percent) said they weren't satisfied.

Mr. Wood doesn't want taxpayers across Texas to carry the burden the way they subsidize outlying telephone service through universal service fees.

"Getting a voice dial tone is one thing, but having access to the Internet and other uses for high-speed – it's hard to say that is a public good we ought to subsidize," Mr. Wood said. "On the other hand, there are some things we could do."

The Texas Telecommunications Infrastructure Fund helped pay the cost of getting high-speed Internet service to schools, hospitals, libraries and government offices across the state.

For commercial and residential customers, Mr. Wood recommended that those interested in obtaining broadband service should pool their resources, or let the local economic development authority use its share of the sales tax to support a project.

More than half of the Texans surveyed in the UT study, whether rural or not, were interested in broadband. Mrs. Hawley said a big part of the problem in rural Texas is learning what's out there.

"We hear two-way satellite will be available at the end of this month," she said. "I hope so. I'm 60 miles from Corpus Christi, and I can't beg borrow or steal anybody to provide me with bandwidth. ... Each community will have to come up with their own solution that works for them. You just can't cover the state with one paintbrush."

Fixed wireless service like that offered by Mr. Anglin works well in flat terrain where there's little radio interference and water towers are visible for miles. But it won't work in the mountains.

DSL depends on proximity to a telephone switching facility. Cable broadband needs not just access to cable television, but to cable that's been upgraded to handle two-way communication.

Bobbie Purcell, assistant administrator of the federal Rural Utilities Service, said most of her agency's loans go to rural telephone cooperatives or small commercial firms offering wire-line services such as ISDN, T-1 lines or DSL.

Mrs. Purcell said the Rural Utilities Service has made loans available to broadband providers for years in rural communities with populations of less than 5,000 people. This year Congress made available an extra $100 million for broadband loans to communities up to 20,000 residents. The agency has loans outstanding to 32 Texas borrowers.

"Our borrowers are doing a very good job of deploying broadband, but there's still a lot of rural America our borrowers do not provide service for that are well behind," she said.

Kenedy is one of those places that fears it is falling behind. The site of December's big prison escape wants to attract other kinds of businesses, Mrs. Hawley said, but it struck out three times recently because it did not have broadband available.

"Having high-speed Internet access is just as important to your infrastructure as having a hospital or access to the interstate highway," she said. "Without it, despite good schools and medical care, they're just out of the economic loop."