Broadband for Rural Businesses
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BROADBAND APPLICATIONS Broadband for Rural Businesses Rural providers are taking aim at rural businesses with fiber and DOCSIS 3.1–based broadband services. But providers must educate this segment about using these new services to become more viable in the online world. By Sean Buckley / Broadband Communities ith most business broadband access. A September 2018 Illinois Farm Bureau deployments taking place in large study revealed that although three-quarters of W metro areas, rural businesses often respondents had residential internet access, their lack affordable broadband options. However, business broadband performance was poor. there are signs that change is underway, and rural Further, two-thirds said broadband service providers are finding cost-effective ways to extend quality “negatively impacted” their farming fiber and DOCSIS 3.1 to business customers. business. Inadequate broadband keeps farmers Farmers are especially impacted by poor from implementing new precision agriculture broadband service. According to the USDA methods, which are necessary for both report “Farm Computer Usage and Ownership, competitiveness and environmental protection. 2017,” 29 percent of U.S. farms have no internet However, farmers aren’t the only group lacking good broadband options. Broadband availability affects all kinds of rural businesses. Jamie Belcore Saloom, assistant chief counsel for telecommunications for the U.S. Small Business Administration, said during the GUIDELINES FOR RURAL BUSINESS Incompas Policy Summit in February that rural BROADBAND PROVIDERS small businesses cite a lack of broadband as a key issue. • Speed: Service providers should offer a range of speed “Our office has published research showing packages, whether they offer fiber or coax-based services. A that small businesses – particularly in rural symmetrical-speed service offers consistent download and areas – tend to pay more for lower-quality upload speeds that businesses need to rapidly exchange large services than bigger businesses,” Saloom said. files and support managed services. She added that “policies that encourage • Price: Small rural businesses have historically been overcharged more [providers] deploying more broadband for poor service, and because they have limited budgets, to encourage companies to invest in places they seek lower prices. However, price/performance is the that are hard to reach” can bridge the rural more relevant measure. Providers need to help customers business divide. understand that a higher-priced, symmetrical service may be more economical than a low-cost service because it provides CLOSING THE BUSINESS FIBER GAP greater reliability and reduces downtime. A key gap in the rural business services market • Availability: As service providers deepen their rural business is the fiber available to business buildings. By broadband footprints, they will need to get the word out to making fiber available to more commercial local business communities that they offer services. buildings, carriers will narrow what Vertical Systems Group (VSG) calls the fiber gap. 66 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | MARCH/APRIL 2019 Since the research firm started collecting on-net fiber information in 2004, the fiber gap has continued to shrink as providers extend fiber deeper into metro and rural markets. Fiber-lit buildings are defined as sites that have on-net fiber connectivity to a provider’s infrastructure. These sites also include onsite active service termination equipment such as routers and optical switches. In larger U.S. metros, the availability of fiber to large and medium-size commercial buildings that have 20 or more employees jumped to 54.8 percent in 2017. As a result, the fiber gap dropped to 45.2 percent for the first time. However, in rural markets, the Small and rural commercial buildings are much more likely than larger buildings to lack fiber. business fiber gap is much greater. In the small and rural segment, which covers buildings with fewer than 20 employees, VSG says more than 90 as customers in larger cities,” says Diego we weren’t synchronized,” says Craig percent – that is, more than 4 million Anderson, senior vice president and Venable, director of wireline sales and buildings – are without fiber access to general manager of Lumos Networks. marketing at Shentel. “By having one network services. Cable operators such as Mediacom commercial sales team, we can find out STEPPING UP THE FIBER and hybrid telco/cable MSO Shentel are if we can solve it with cable or deliver FACTOR also being aggressive. fiber outside of the cable markets.” Through its Project Open Road Service providers are now stepping up Competitive carriers such as initiative, Mediacom set a goal in rural business fiber deployments to Fatbeam are also making an impact. 2016 to put gigabit internet speeds address the fiber gap. These carriers Fatbeam has taken a two-pronged are looking to give their customers the within immediate reach of more local approach to building out its fiber same experience available to customers businesses. This is part of a broader network: partner with a third-party in Tier-1 cities. goal to invest $1 billion over three years carrier to get a foothold and then Consider Windstream’s plan to to upgrade and expand its national migrate customers onto its network. expand its 1 Gbps Kinetic fiber service broadband network. Tammy Lange, vice president of to 100,000 business locations across 16 Mediacom, which targets rural sales for Fatbeam, says this method states. Nearly one-third of commercial customers via DOCSIS 3.1 and gave it a head start in Sand Point, locations – primarily small and fiber, sees an opportunity to pursue Idaho, with immediate revenue results. medium-sized businesses – across its businesses that currently use lower “Originally, we were waiting until rural footprint will get access. speeds. Its efforts are paying off as we got our own fiber network built “Our approach to rolling this out is business services revenues rose 6.5 and marketing services,” Lange said. ubiquitous,” says Jeff Small, president percent year-over-year in 2018. “[Partnering with another carrier] gave of consumer, small and medium-sized “Our share of the business market is us an advantage, and we’ve generated business for Windstream. “We’re still below 50 percent, so there’s lots of $35,000 to $40,000 in monthly bringing the same types of services room for growth,” says Dan Templin, recurring revenues.” to Española, New Mexico, that we’re senior vice president of Mediacom bringing to Lexington, Kentucky.” Business. “We believe we will get the UNDERSTANDING Likewise, Lumos Networks, which customers that need to go beyond a CUSTOMER NEEDS recently announced plans to support DSL or a T-1 connection.” In targeting rural businesses with 10 Gbps service, says customers want Shentel realigned its sales team broadband services, service providers the same services found in urban to sell fiber and cable-based services. begin by understanding customer markets. “Previously, we had a cable sales team needs. “We’re finding rural market users focused on selling our cable plant to A medical provider may need have the same bandwidth requirements SMBs and our fiber sales team, but symmetrical bandwidth to process MARCH/APRIL 2019 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 67 BROADBAND APPLICATIONS MRIs, and schools need speeds for Similarly, Lumos finds that sizeable broadband assets struggle online learning. Other segments, customers – particularly those to attract new businesses and retain such as car dealerships, which handle migrating to VPNs, VoIP and existing businesses. When providers sensitive customer information, may managed PBX – are willing to pay for align with a local community’s find utility in managed security. symmetrical speeds. economic development teams, Shentel has found that car “Several of our customers are taking broadband deployment is most likely to dealerships are good targets for the 1 Gbps profile because they’re using result in economic development. distributed denial of service (DDoS) cloud-based solutions where they need For example, broadband is a mitigation. “Rural car dealerships are [symmetrical] speeds,” Anderson says. concern for residents in Prince George one of the prime targets for hackers “It depends on the application and County, Virginia. According to the because there’s so much sensitive what the customer is trying to do.” Hopewell/Prince George Chamber information there,” Venable says. of Commerce, 61 percent of all FOCUS ON AVAILABILITY “Although we don’t provide fully businesses in Prince George County Because rural business density is low, managed security solutions, we do are home-based. Prince George Electric service providers need to educate clients have DDoS mitigation within our Cooperative (PGEC) Enterprises is on service availability. Often, a small network, so that gives another layer deploying a new fiber network to help business may not be aware that a rural of protection.” address their needs. carrier has installed fiber facilities Providers need to convince nearby. “High-speed internet will help our businesses that higher-priced, Michael Morey, CEO of Bluebird, a businesses become more competitive symmetrical services with quality-of- midwestern carrier recently purchased in this internet-based economy,” said service guarantees offer greater value. by Uniti and Macquarie, says his sales Becky McDonough, CEO of the Trevor Jones, vice president of team must convince