By Peter J. Brown

As we ease into the second half of 2006, the United States rapidly is approaching an impressive milestone with respect to broadband service provision. Exactly when we will be able to declare that 50 million broadband subscribers have signed up for the service is anyone’s guess, but that date is fast approaching. Not approaching as rapidly is the date when the number of two-way satellite broadband subscribers in rural, unserved or underserved areas of the country will cross the 1 million mark.

The U.S. Department of Agriculture has pumped more than $870 million into developing rural broadband infrastructure since 2002 through its Rural Development Broadband Loan and Loan Guarantee Program, part of the department’s Rural Utilities Service. Grants have been awarded to more than 57 applicants, according to Curtis Anderson, deputy administrator for the Rural Development Utilities Programs.

Anderson provided a breakdown of the types of broadband service providers being funded: 18 for fiber to the home, 14 for DSL/ADSL, 13 for unlicensed fixed wireless, 11 for hybrid fiber/coaxial, two for licensed fixed wireless and one for broadband over powerline. Satellite is not on the list, and Anderson points out that no satellite company has applied for a loan,

The program has helped expand broadband availability, Mark Pagon, CEO of Pegasus Communications Corp., testified at a May 17 hearing before the Senate Committee on Agriculture, Nutrition and Forestry hearing devoted to the Department of Agriculture program. "Wireless technologies are now being introduced that allow for the delivery of commercially viable wireless high-speed Internet access services," he said. Pegasus Rural Broadband LLC., a wireless broadband service provider that serves 2,500 subscribers across 50 communities in West and Central Texas, received a $13 million loan from the Department of Agriculture in 2005.

Pagon cited proprietary technologies provided by companies like Alvarion and Motorola and open-standard technologies such as WiFi using unlicensed spectrum, along with 4G technologies such as WiMAX and Flash OFDM designed for use in licensed frequency bands. Increasingly, these fixed wireless services along other cellular broadband service offerings are making rapid inroads into rural America, displacing satellite in some cases. Two years ago, for example, Via Satellite reported how vans used by a Midwestern state patrol’s commercial vehicle section were outfitted with two-way satellite systems, and these systems were given high marks by the agency in question. Today, this agency reports that it relies entirely on cell phone and CDMA technology for its primary mobile data communications.

But the Department of Agriculture program also has come under fire for straying from its primary purpose.

"Loans are largely being used to subsidize broadband deployment in areas already served by companies that deployed broadband service without a government subsidy, instead of being used to bring broadband to consumers living in areas where it is unavailable," said Tom Simmons, vice president for public policy at Midcontinent Communications, which serves more than 200,000 customers in about 200 mostly rural communities in North and South Dakota, western Minnesota, and northern Nebraska.

A September 2005 audit by the Department of Agriculture’s Inspector General found that this program has not maintained its focus on unserved rural communities. "The private entrepreneurs’ reward for being the first risk takers in rural America is to face a government-subsidized competitor," said Simmons. "The threat of a government subsidized competitor in rural markets also creates a disincentive for a company that does not receive federal support to extend service to rural communities."

Anderson confirms that overbuilds are funded, agrees that transparency thus far has been lacking and reports that for this reason, the program’s Web site is being updated to provide everyone with much more information.

Although the Rural Development Broadband Loan and Loan Guarantee Program needs more work, it is promoting and enabling the creation of more rural broadband infrastructure and generating more awareness and more demand for broadband overall. Simply put, the fact is that the goal set forth by President Bush during a speech in New Mexico in 2004 calling for universal broadband coverage nationwide by 2007 is still an elusive one. In the meantime, satellite broadband marches on, down every dusty lane, over every last mile.