Which five states have the highest percentage of wireless-only homes? The answers, which came this week from a Georgetown University Center for Business and Public Policy white paper, are not only surprising, they also have some interesting policy implications.
Topping the list were five heavily rural states, including Arkansas (35.2%), Mississippi (35.1%), Texas (32.5%), North Dakota (32.3%) and Idaho (31.7%). In comparison, the national average is 25%.
This may not seem logical, considering that rural telcos have seen less landline erosion than counterparts in metro areas. But as the researchers theorized, wireless communications has the strongest appeal to people who are not “yoked to their nodes (e.g., domiciles.)” The researchers also offer an example of the theory in action, which illustrates their thinking in a more down-to-earth manner. The white paper, titled “Achieving Rural Universal Service in a Broadband Era: Emergent Evidence from the Evolution of Telephone Demand,” quotes a U.S. Cattlemen’s Association official and rural rancher:
“When I leave the house and head out to the high country, I have, at best, limited access to Internet and cellphone service. While out gathering cattle, I am virtually unreachable and must suspend all business communications . . . and that is not an ideal working situation.”
The white paper also asserts that “after controlling for a host of other demand determinants, population density of a household’s county is inversely related to the demand for wireless telephony.”
The Georgetown University research comes to light just one week before the FCC plans to unveil long-awaited reforms to the Universal Service program—reforms aimed at making broadband available to all Americans by transitioning today’s high-cost program to one focused exclusively on broadband (CP: Genachowski outlines USF reform plans: “Status quo is no longer an option”). Those reforms are expected to draw heavily on a brokered solution proposed by the nation’s six largest telcos and the major rural telco associations (CP: Rural carrier associations confirm agreement with large carriers on broadband USF funding).
The Rural Cellular Association has fought the brokered solution, arguing that it doesn’t allot enough money specifically for wireless. Companies like AT&T and Verizon note, however, that the brokered solution does not prevent the use of wireless broadband solutions for unserved areas–as long as the solutions meet the minimum speed target, which is expected to be 4 Mb/s downstream and either 768 kb/s or 1 Mb/s upstream.
The Georgetown University data suggests wireless broadband solutions may be better received than one might expect. But I still think we should be concerned about relying solely on wireless to bring broadband to unserved areas because of the usage caps that typically are involved.
Is it possible that we may not have seen much wireless erosion in rural areas because there probably has not been significant landline deployment in rural areas in the past? In addition to not being yoked to their nodes, terrain in western states especially made deployment costly, and probably even with high-cost support, the consumer opted for alternative modes of communications.
This story is likely incorrect regarding the level and drivers of landline erosion in some rural areas. In our rural Mississippi area, landline erosion is significantly greater than the 35.1% figure given here for wireless only homes. I suspect the largest driver for higher levels of wireless only households is low household income in Mississippi, but there may be other drivers in states where the \"unyoked\" effect might be more important. I\’ve lived in North Dakota and in Mississippi, and the two states seem to have very different density characteristics.