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Verizon CEO raises concern about rural broadband services

  
  
  

Rural BroadbandLowell McAdam, CEO of Verizon Communications, created a bit of a stir recently when discussing the future of services in rural America.

McAdam indicated that he wants the company to quit investing money in its copper network in rural areas and focus more resources on enhancing wireless services and, in more urban areas, improve its packages of bundled services offered through its FiOS system.

"In ... areas that are more rural and more sparesely populated, we have got (wireless facilities) that will handle all of those services and so we are going to cut the copper off there," McAdam said, in part. "We are going to do it over wireless."

He likened trimming parallel networks to dipping into a "pot of gold."

A link to a story published by Stop The Cap! – an online publication that promotes broadband service – can be reviewed at:  http://stopthecap.com/2012/07/17/verizon-ceo-ponders-killing-off-rural-phonebroadband-service-rake-in-wireless-profits/

As a practical matter, even if federal regulators don't throw up any obstacles, McAdam’s vision isn’t likely to have much short-term impact in South Dakota or the region. That’s because Verizon depends heavily on SDN’s fiber optic network to transmit voice and data for its customers. The technical reality is that even mobile calls depend heavily on landline networks for transmission.

Still, it's a telecommunications trend worth monitoring.

“My take is that they (Verizon) would seek to raise prices to rural customers,” says Bill Heaston, vice president of legal and regulatory for SDN Communications.

Kristie Fiegen, a member of the South Dakota Public Utilities Commission, says  federal regulators’ plans seem to count heavily on major wireless providers, such as Verizon, to help provide broadband services to rural America.

“It could be interesting to see how that all plays out,” Fiegen says.

Fiegen, incidentally, speaks highly of SDN as a South Dakota-based telecommunications business.

“It’s neat to see that we have developed a company that worked with our phone companies to expand broadband network access in the state,” she says.

SDN is owned by 17 independent telephone companies that serve 80 percent of South Dakota. The company’s network of more than 21,000 miles of broadband, fiber optic Internet connectivity helps provide an array of business-to-business services.

“We’re very fortunate in South Dakota to have a company like SDN that invests in our citizens and our future,” Fiegen says.