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The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis ofrace, color, national origin, sex, religion, age, disability, political beliefs, sexual orientation or marital or family status.(Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means forcommunication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Centerat 202-720-2600 (voice and TDD). To file a complaint of discrimination, write: USDA, Director, Office of Civil Rights, Room 326W, Whitten Building,14th and Independence Avenue, SW, Washington, DC 202-509-410 or call 202-720-5964 (voice and TDD). USDA isan equal opportunity provider and employer. Advanced Telecommunications in Rural America The Challenge of Bringing Broadband Service to All Americans National Telecommunications andInformation Administration Rural Utilities Service Gregory L. Rohde, Assistant Secretary forCommunications and Information Christopher A. McLean, Acting Administrator Joint Project Team for RUS for NTIA Office of the AdministratorAnthony Haynes, Confidential Advisor to theAdministrator Office of Policy Analysis Wendy Lader, Senior Policy AdvisorJames McConnaughey, Senior Economist Advanced Services DivisionOrren E. Cameron III P.E., Director Institute for TelecommunicationScience Kenneth C. Allen, Electronics EngineerJohn J. Lemmon, PhysicistFrank Sanders, Electronics EngineerPerry F. Wilson, Electronics Engineer Universal Services Branch Gary B. Allan, ChiefJohn L. Huslig, Financial Analyst EXECUTIVE SUMMARY Advanced Telecommunications in Rural Americais a response by the NationalTelecommunications and Information Administration (NTIA) and the Rural Utilities Service(RUS) to a request by ten U.S. Senators on the status of broadband deployment in rural versusnon-rural areas in the United States. This report also responds to a call by President Clinton andVice President Gore to bridge the digital divide and create digital opportunities for moreAmericans. The rate of deployment of broadband services will be key to the future economicgrowth of every region, particularly in rural areas that can benefit from high-speed connectionsto urban and world markets. This report finds that rural areas are currently lagging far behind urban areas in broadbandavailability. Deployment in rural towns (populations of fewer than 2,500) is more likely to occurthan in remote areas outside of towns. These latter areas present a special challenge forbroadband deployment. Only two technologies, cable modem and digital subscriber line (DSL), are being deployed at ahigh rate, but the deployment is occurring primarily in urban markets. Broadband over cable,which provides most broadband service, has been deployed in large cities, suburban areas, andtowns. One survey found that, while less than five percent of towns of 10,000 or less have cablemodem service, more than 65 percent of all cities with populations over 250,000 have suchservice. DSL technology also has been deployed primarily in urban areas. The Regional Bell OperatingCompanies (RBOCs) are providing DSL service primarily in cities with populations above25,000 according to public RBOC data. While more than 56 percent of all cities withpopulations exceeding 100,000 had DSL available, less than five percent of cities withpopulations less than 10,000 had such service. Deployment of both cable modems and DSLservice in remote rural areas is far lower. The primary reason for the slower deployment rate in rural areas is economic. For wirelineconstruction, the cost to serve a customer increases the greater the distance among customers.Broadband service over cable and DSL is also limited by technical problems incurred withdistance and service to a smaller number of customers. Both technologies, however, promise toserve certain portions of rural areas. Cable operators promise to serve smaller rural towns, andsmaller, independent telecommunications companies and competitive providers may soon beable to offer DSL to remote rural customers on a broader scale. Advanced services in rural areas are likely also to be provided through new technologies, whichare still in the early stages of deployment or are in a testing and trial phase. Satellite broadbandservice has particular potential for rural areas as the geographic location of the customer hasvirtually no effect on the cost of providing service. Several broadband satellite services areplanned. Their actual deployment remains uncertain, especially in light of the recent entry intoChapter 11 bankruptcy of two satellite service companies. Wireless broadband services are also planned for rural areas. More immediately, multipoint-multichannel distribution system (and potentially local-multipoint distribution system) fixedservice capabilities may provide a solution for some rural areas. In as little as five years, thirdgeneration mobile