Monday, January 07, 2008

A question of values...

Stu Ellis at Farmgate had a good summary of recent research into rural Internet use. But more interesting to me were the comments. [I also spoke about this on USFR last week]

It is the cost of satellite Internet service that prevents most non-users from signing up. What is that cost? Well, for HughesNet - my provider right now it's $300 up front and $60/month for the lowest speed (which worked well for me for 3 years).

I think there are two things going on here.

First, rural America has grown accustomed to subsidized services. Lord knows my electric company doesn't begin to recoup the cost of providing me power. And the same goes for the [landline] phones. But we expect to pay the same as guys in town. For the most part, the rest of America agrees, and views these services as essential to national interests.

Broadband doesn't seem to be viewed the same way, so rural users will have to pay the going rate. That's not our view of how things should work out here in the country.

Second, those without broadband obviously don't value it at $720/year, but I have never met a broadband user who does not - or would exchange his service for the money. So there is a sales hurdle to get broadband into homes for trials, I think.

It is not an inconsiderable sum, of course, but if you have a second phone line for your computer/fax, dropping it could save half the cost of broadband (my extra line was $32/mo. basic charge). Then, because you don't need a local Internet Service Provider (ISP), that saved me $15/mo. In the end I was paying (after the initial hardware cost) all of $12/mo. for hours of time not spent waiting on pages to load.

Plus, unless I miss my guess, cell phone numbers and usage are skyrocketing among rural residents, and I'll bet almost as much is being poured into that communications category.

In short, the choice to plunk down money for broadband is not easy, but it reflects our ability to decide what we value in our lives.


Roger Osburne said...

Folks in rural areas shouldn't have to pay more for high speed internet service. Access is so important for the future of these areas. Economic development can be greatly enhanced and needed services like telemedicine, distance education and civic involvement are crucial.

The Communications Workers Of America are working to ensure all Americans have access to low cost broadband. Check out their website for more information at

John Phipps said...


Thank you for reading and for the pointer.

I find the use of the word "shouldn't" intriguing. This strikes me as another entitlement claim by rural America.

Isolation is not just an impediment to commerce, it is a treasured aspect of rural living that ex-urbanites often pay to acquire. Given it has positive dimensions, I cannot justify asking other Americans to offset the disadvantages while enjoying none of the advantages.

Low cost broadband would be a plus for rural America. So would better roads, health delivery, etc. Those benefits should be paid for by those who enjoy them.

Regardless, I fear much of truly rural America will be essentially empty before we can extend such universal conveniences.

More on this topic in another post.

Anonymous said...

Thanks for including your current satellite internet provider. As I understand Hughes owns the satellite, and thus all users end up paying them at some point. I chose to go with another company that "rents" bandwidth from Hughes. The cost is essentially the same as what you quoted, but speed is an issue. The plan calls for 700Mbps and the fine print says that it may slow, but should always be between 60-100%. This slows to where it is actually slower than dial-up at various times of the day (10 a.m.-8 p.m.). I'm located in the Pacific Northwest and this may have something to do with the satellite I am aimed at. The provider has been slow-w-w-w to attempt to rectify the problem, but I will keep after them.

I now consider high speed internet as a necessary luxury for our family. What with digital photos, kids needing to do research for school online, and today's commodity prices. In January of 2006, I sold my 2005 wheat crop (SWW) for $3.50/bu (basis Portland, OR). Today, I can sell for $13.30 and if I want to pay a little extra storage, the offer is $13.65 for May. Garnering information from USFR and other sources (most of which come to me everyday via the Internet) has convinced me to hold on as long as possible.

It is certainly easier to come up with the higher fee for the satellite service than it was just several months ago.