| 12/21/2006 9:38:00 AM | Email this article • Print this article | New tools for rural competitiveness
Guest Opinion
by Niel Ritchie
A boom in manufacturing jobs has surely been the jet fuel in China's growing economic juggernaut, but the country wants to become a global player in agriculture as well.
Thanks to favorable government actions, rural Chinese have had the benefit of a rather robust broadband Internet infrastructure that helps farmers not only grow their businesses but educate their children and boost economic and social development in rural areas as well.
Here in the U.S., most rural households aren't hooking up to the high-speed Web. At the beginning of 2006, the Pew Internet and American Life Project estimated that only 24 percent of rural Americans use the Internet through a high-speed connection at home - almost half the percentage of suburban and urban users.
As a result, America's heartland is missing out on advances in areas like distance learning and telemedicine - advances designed to keep doctors and educators a little closer to home.
But thanks to a new telecommunications technology called Voice over Internet Protocol - also known as VoIP - Middle America may soon see increased broadband capacity - so long as Congress keeps the Bell phone monopolies from gumming up the works. VoIP sounds and feels identical to traditional phone service, but it employs different mechanics, using a broadband connection to send and receive our conversations the way computers pass other types of data back and forth.
And because it requires a high-speed connection, VoIP also holds the key to the next broadband revolution. It promises a fertile business model for broadband companies waiting for the call to expand their high-speed networks into yet-untapped areas like rural America.
Unleashing the VoIP business model could bridge the digital divide and usher in a new age of rural connectivity, easily putting 21st century tools within reach of the 55 million people who call rural America home.
Experts have predicted that the number of VoIP phone subscribers will increase as much as six-fold over the next four years and could bring $100 billion in consumer savings over the next five; this would mean hundreds of dollars each year for every household that uses the services.
But Bell telephone companies, slow to innovate and perpetually fighting competition, have cooked up a regulatory scheme to stop VoIP in its tracks. Their plan involves exploiting an obscure FCC rule in order to make it more costly to "interconnect" with traditional phone lines.
Interconnection is the golden rule that fuses the many different U.S. phone networks into a functional whole, allowing calls to flow without a hitch between big urban carriers, rural cooperatives, cell phones and other networks.
But because VoIP treats phone calls as data, a potential legal loophole could allow the old-line Bell monopolies - who Business Week referred to as the "last monopoly in America" - to unplug their newest high-tech competitors.
A pending bill in Congress would extend the time-honored guarantee of interconnection - the one that ensures that a cell phone call can be connected to your land-line phone - to VoIP calls. But the telephone companies - marching under the banner of competition so that they can get favorable rules to enter the cable television market - are ironically pushing back on the same competition in the telephone market, arguing that the traditional guarantee of "interconnection" should not be extended to new VoIP calls.
One leading Bell executive called the application of interconnection rules to VoIP "old world thinking" that "simply won't do." In the telephone company's view, VoIP providers seeking interconnection can simply negotiate "commercial agreement(s)" with the Bells, who can stand atop their 85 percent market share to gain the upper hand - effectively stopping VoIP companies from bringing competition and consumer choice to rural markets.
Bell companies move at snail's pace and will do everything in their power to slow others to a crawl. Instead of hitting the brakes, we need to stomp on the accelerator.
Congress must pass interconnection rights for VoIP providers, extending phone choice, lower prices and broadband everywhere.
Niel Ritchie is the Executive Director of the League of Rural Voters, founded in 1985 as a non-profit organization dedicated to increasing the representation of rural people in the public policy making process.
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