Indeed, many municipal broadband projects are undertaken because the Wall Street metric does not work. The town may be too remote, the population may be too sparse, or the demographic nature may not be consistent with the template used by private sector companies in their profit-maximizing decisions on where and whether to deploy. Those are precisely the circumstances, however, in which the community benefits of providing broadband become most profound, and most valuable.
Rural Broadband Association to FCC: "Satellite Is Not Broadband"
The Rural Broadband Association (NTCA) recently filed a report with the FCC as it examines the role of the Universal Services Fund (USF) in communications. Telecompetitor reports that NTCA filed the report as part of comments on November 7, 2013. The report by Vantage Point telecommunications engineering firm criticizes the argument that satellite is a magic pill for rural broadband availability. You can view a PDF of the report at FCC.gov.
The report lists high latency, capacity limitations, and environmental impacts the three main obstacles that complicate satellite usage. In the Executive Summary, the report goes on to note:
While satellites will continue to provide an important role in global communications, satellites do not have the capacity to replace a significant amount of the fixed wireline broadband in use today nor can they provide high‐quality, low‐latency communications currently available using landline communication systems. While recent advances have increased satellite capacity, the capacity available on an entire satellite is much smaller than that available on a single strand of fiber.
Telecompetitor speculates that the organization was motivated in part by the potential loss of USF funding to NCTA members. From the article:
The FCC has previously stated that as it transitions today’s voice-focused Universal Service Fund to focus instead on broadband, it envisions that homes in the areas that are most expensive to serve would receive broadband from a satellite (or possibly broadband wireless) provider. And depending how far the FCC is able to stretch its limited pool of USF dollars, it wouldn’t be surprising for the commission to consider expanding the number of homes targeted for satellite service – a move that eventually could leave some NTCA members without USF funding.
Regardless of the motivation, the fact remains that satellite is a poor replacement for wireline services. Latency, lack of capacity, and environmental factors degrade the quality of the service; data caps degrade its effectiveness. From the report:
Data intensive applications, such as streaming content, online back‐ups, video conferencing and downloading of large files, can cause subscribers to quickly exceed these monthly capacity limits. Other applications that are extremely data intensive, such as telepresence and some medical and educational applications are not even practical.