Survey Shows Regulatory Uncertainty Weighing Heavily on Community-Based Telecom Providers

For Immediate Release

Contact: Laura Withers, 703-351-2086, lwithers@ntca.org
               Wendy Mann, 703-351-2087, wmann@ntca.org

FCC reforms threaten to impede steady progress in deploying fiber to rural consumers

Arlington, Va. (March 21, 2012) – The nation’s small, independent telecommunications providers continue to make significant improvements in the availability of high-speed broadband to rural Americans, but uncertainty arising out of recent FCC reforms has already begun to impede their progress, according to a new survey by NTCA–The Rural Broadband Association.  

The "NTCA 2012 Broadband/Internet Availability Survey Report" found that 74% of respondents currently offer fiber to the home to some portion of their customer base, up from 64% in 2011. Rural consumers also can access broadband at higher speeds: seven of 10 customers of survey respondents can now receive broadband service of up to 6 Mbps. Fifty-one percent can receive service of between 6 and 10 Mbps, and 40% can receive service of greater than 10 Mbps. The overall take rate among customers of survey respondents also has improved to 69%, up from 66% in 2011.

But survey results also paint a sobering picture of what the next few years might hold for customers of rural telecom providers in the wake of FCC cuts to the Universal Service Fund. Although sixty-one percent of respondents indicated they expect to be able to provide FTTH to at least half of their customers by year-end 2015, respondents indicated those plans could be put on hold or canceled outright as a result of the commission’s actions. More than three-quarters of respondents cited regulatory uncertainty as a top barrier to broadband deployment, second only to cost concerns.  

“It is patently clear that regulatory uncertainty is a major impediment to rural providers and weighs heavily on their minds,” said NTCA Economist Rick Schadelbauer. “This uncertainty already is leading some carriers to slow their forward progress by cancelling or postponing planned deployment projects. This is the exact opposite of the intent of the reforms that are causing the lion’s share of uncertainty and fear.”

The survey also shows that rural communications providers are finding it increasingly difficult to gain access to fairly priced “must-have” video content controlled by vertically integrated cable providers, such as regional sports networks. One hundred percent of survey respondents cited trouble obtaining video programming at reasonable cost as an impediment to the provision of video services, which has traditionally provided an important method of recovering the cost of broadband deployment.

Twenty-five percent of NTCA members (132) participated in the online survey in the winter of 2012, prior to NTCA’s unification with OPASTCO. The survey comprised general questions about the respondents’ current operations, competition, marketing efforts, and current and planned fiber deployment. Additional questions addressed the Internet backbone, voice over Internet protocol (VoIP) and video.

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NTCA–The Rural Broadband Association is the premier association representing nearly 900 independent, community-based telecommunications companies that are leading innovation in rural and small-town America. NTCA advocates on behalf of its members in the legislative and regulatory arenas, and it provides training and development; publications and industry events; and an array of employee benefit programs. In an era of exploding technology, deregulation and marketplace competition, NTCA’s members are leading the IP evolution for rural consumers, delivering technologies that make rural communities vibrant places in which to live and do business. Because of their efforts, rural America is fertile ground for innovation in economic development and commerce, education, health care, government services, security and smart energy use. Visit us at www.ntca.org.