Wednesday, November 30, 2005
Wireless Dead Zone: Life on the Farm
Money Is There to Aid Rural Internet, but Loans Are Hard to Get - New York Times
Vikas Bajaj reports that some rural areas are "wireless dead zones" left off the broadband network. Rural areas without enough population density are not attractive to private internet providers. There is just not enough profit. The federal government has stepped in with a loan program to provide money to "extend high-speed Internet service to rural areas."
This is a good illustration of the government's attempt to make up for the failure of the market to provide digital infrastructure to everyone, not just the profitable communities. The federal government did the same to make sure that everyone had access to electricity and telephone service. This program is limited and has not solved the problem.
In Iowa an internet provider, Prairie iNet, was turned down for a federal loan that would have provided the capital it needed to extend its rural wireless service. It wanted to invest in a system of towers that would provide wifi service:
Such an investment, which could serve several dozen farms and rural homes, would have been far more affordable had the company received the federal loan. But with its private funds, Prairie iNet is better off spending that cash in the fast-spreading suburban office parks outside Des Moines.
Daniel Hawkins, a loan officer at a community bank, said he understood Prairie iNet's position but was not sure why the government did not step in to fill the void as it had in the past.
"This is no different than back in the 30's when farms didn't have electricity - people used to have kerosene lights," Mr. Hawkins said. "This is just a matter of keeping you in touch with the world. I think it would be a huge economic benefit for rural areas."
