Survey Shows Competition, Regulatory Uncertainty Pose Challenges to Rural Broadband Deployment

For Immediate Release
Contact: Hillary Crowder, 703-351-2086, hcrowder@ntca.org

Arlington, Va. (May 29, 2014) – The nation’s small, independent telecommunications providers continue to make significant progress in providing availability of high-speed broadband to rural Americans, but competition within the marketplace as well as regulatory uncertainty continue to pose challenges, according to a new survey by NTCA–The Rural Broadband Association. 

The “NTCA 2013 Broadband/Internet Availability Survey Report” found that 41% of survey respondents currently deploying fiber serve at least 50% of their customers using fiber to the home (FTTH), up from 33% in 2012. Seventy-six percent of respondents indicated that they have a plan in place to continue deployment: 58% expect to offer fiber to the node (FTTN) to more than 75% of their customers by the end of 2016 and 61% expect to be able to provide FTTH to at least half of their customers by 2016.  

While advancements are being made, more than half of respondents indicated their ability to compete with larger providers may hinder their efforts. However, they are taking numerous marketing steps to combat this, including bundling services (87%) and offering free equipment installation (79%), price promotions (74%), free modems (59%), free introductory service (45%) and free education and training (33%).   

Eighty percent of respondents also indicated regulatory uncertainty continues to discourage expanding broadband deployment. Chief among their concerns is what mechanism will ultimately take the place of the quantile regression analysis (QRA) caps that were eliminated by the FCC in April. 

“While the regulatory picture has become somewhat less murky on Universal Service Fund support with the elimination of the QRA, the future is still far from certain,” said NTCA Economist Rick Schadelbauer. “Absent some sense of predictability, small carriers will be loath to commit precious capital resources to long-term projects, and lenders will not be willing to make loans when payback cannot be satisfactorily guaranteed.” 

Twenty-seven percent of NTCA members participated in the online survey in the winter of 2013. 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.