February 3, 2009
The Honorable Henry A. Waxman
U.S. House of Representatives
2204 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Waxman:
The American Cable Association and its more than 900 independent operator members, serving smaller markets and rural areas in all 50 states, share the interests of the Administration, Congress, and others in ensuring that high-speed broadband services are available nationwide. Small and medium-sized providers are particularly well positioned to assist in delivering these current- and next-generation broadband services in areas of great interest to policy makers, most notably unserved and underserved communities. ACA urges Congress to include federal grants, loans and loan guarantees in the economic stimulus package because this type of funding would make it easier to further deploy these advanced services, while at the same time create new jobs in this economy.
Of greatest priority to offering current- and next-generation broadband speeds in areas that currently have only limited performance capabilities is the ability of local networks to connect directly into the national fiber network that today only runs through major markets. In many smaller markets and rural areas, ACA's local operators have systems capable of providing higher broadband speeds to their customers, but the only option to connect to the Internet is through limited-capacity pipes, such as T1s. However, these backhaul connections have high costs and narrow data throughputs. As a result, these limited-capacity connections become the bottleneck that prevents consumers from receiving significantly higher speeds using existing local infrastructure. In short, a local system can provide an entire community with 10-times the speeds by simply having a better connection to the backhaul network, which means entire communities can see significant improvements in speed by laying a single pipe to the national fiber network without having to invest in expensive upgrades of entire networks.
As an example, one of our members, Wave Broadband, has a local cable system serving approximately 1,500 homes in Garberville, California, which is about 200 miles north of San Francisco. Because the national fiber network is too far from the community, the company connects to the Internet through a low-capacity connection, which allows download speeds no greater than approximately 1 Mbps, and the monthly cost to provide this service is about $23 per user. In order to deliver faster speeds at lower costs, Wave needs to connect to the national fiber network. However, the closest node to the Internet backbone is approximately 50 miles away, and the cost to construct a long-haul fiber connection is approximately $1 million. If grants, loans or loan guarantees were available to build these backhaul pipes and/or connect to the national fiber network, the company could offer its customers user speeds up to 18 Mbps. Moreover, the cost per user would drop to an estimated $2.80, and the money saved can be used to build out its service to more customers.
Another ACA member, Avalon Cable makes broadband service available to about 1,300 homes on Catalina Island, one of the most rural and remote areas of California. While higher speeds are possible from the Avalon system, customers of the company receive no better than current-generation DSL service because the only backhaul service available is via microwave. There's no direct fiber connection to Catalina Island from the mainland. If the government helped fund such an underwater fiber pipe to the Island, then Avalon Cable could offer their customers user speeds up to 20 Mbps as soon as the project was completed without having to make any additional investments to its system.
Bringing the national fiber network to small towns and rural areas offers many benefits. In addition to providing consumers with higher speeds at lower costs, other entities, such as local schools, hospitals, businesses and the government could tap into the Internet backbone and offer new services, such as distance learning and tele-medicine. The pipe would also be available to other companies interested in offering a competitive broadband service in these areas. Building the connection to the Internet backbone also immediately creates new jobs for skilled technicians. We estimate that it would take approximately 10 individuals about four months to build a 50-mile connection to one community. Given the number of unconnected small towns and rural areas across the country, bringing higher broadband speeds to these areas could provide thousands of jobs over the next couple of years.
Furthermore, this kind of approach would be consistent with the bill's current desire to be company and technology neutral in its approach, see assets operate on an open access basis, and make it possible for a more robust, high-speed offering to become a reality in places where it may never come otherwise.
We applaud the intent of the language included in the current version of the House-passed economic stimulus package, H.R. 1, and believe that this language is timely and important. We hope you will consider additional ways to ensure that local cable operators in smaller markets and rural areas have access to the national fiber network, and we look forward to working with you as the members of the American Cable Association continue to build and deliver broadband solutions in the present and the future.
Yours most respectfully,
Matthew M. Polka
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