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Government
Technology
April
2002
Putting
IT into Community
With some new initiatives and cooperation, rural areas
are leveling the high-tech playing field
By
Tod Newcombe
If
you want to get as far away from Boston as possible and still
be in Massachusetts, your best bet is to head for Williamstown.
Located in the northwest corner of the state, near the Vermont
border, Williamstown is the home of Williams College and a
small but well-renowned art museum, a village center and rolling
countryside for miles around. Williamstown has managed to
maintain its charm because of its remote location, far from
major highways and suburban sprawl.
But
remoteness has its drawbacks, especially in the age of high-speed
telecommunication networks. That's what some Williams College
graduates found out when they started an Internet business
called Tripod several years ago. A T1 line from Verizon cost
$2,200 a month, more than four times the rate in larger jurisdictions.
That's a pretty steep price for a start-up firm to pay, but
those same high costs were also hurting established businesses,
such as Berkshire Health Systems, which manages nursing homes
and hospitals in the area. And the high costs were keeping
some businesses, such as law firms and small hotels, out of
the broadband picture altogether.
Businesses
in Berkshire County decided to fight back rather than pay.
They started an initiative, called Berkshire Connect, which
pooled local demand so they could attract other telecommunications
carriers to step in and offer more affordable services. Today,
the use of high-speed data connections in the county has taken
off, thanks to lower costs and better services. It's a remarkable
story of how rural communities can enjoy the economic benefits
of today's high-tech world without the hassles of today's
suburban and urban areas. But success in the Berkshires took
years of hard work.
"Rural
areas in America will always present a challenge to telecom
firms," said Don Dubendorf, a lawyer in Williamstown
and a founding member of Berkshire Connect. "We are not
low-hanging fruit."
Rural
Realities
America's
rural communities have always struggled when it came to building
better roads, schools or hospitals. It's no different with
telecommunications. They tend to be the last served by broadband
and have to pay some of the highest prices. Those negatives
can hurt economically. The small businesses that dominate
the rural economy have to pay a disproportionate price for
their information infrastructure.
High-tech
firms, which often pay good wages, are less likely than low-
and medium-tech-oriented firms to locate in rural areas, according
to a study by the Small Business Administration. The report,
"High-Tech Rural Renaissance?" cited several factors
for the lack of high-tech jobs in rural areas, including the
lack of infrastructure.
The
nation's governors have grown concerned about the challenges
facing rural communities as the rest of the nation's economy
churns forward. Last June, the National Governors' Association
called for more federal-state coordination in keeping America's
rural communities productive and competitive, citing the high
economic and social costs when a large segment of the labor
force is left behind.
Last
January, a group of senators led by Jay Rockefeller, D-W.V.,
introduced legislation designed to bring affordable high-speed
Internet services to rural and low-income areas around the
country. The bill featured a 10-percent tax credit per year
for five years to companies that will bring existing broadband
telecommunications technologies to both residents and businesses
in rural or underserved urban areas.
In
November, President George W. Bush signed into law a bill
containing low-interest loans designed to spur rural broadband
deployment. The bill provides about $80 million in direct
loans for building out high-speed Internet access in rural
areas.
Whether
that proves to be the spark for building out telecommunications
infrastructure in rural America remains to be seen. For now,
initiatives to bring broadband to America's rural communities
have been largely at the behest of state governments. For
example, North Carolina has created the Rural Internet Access
Authority, which has the ambitious goal of providing local
dial-up Internet access from every telephone exchange in North
Carolina within one year and to provide high-speed access
at competitive prices for residents and businesses within
three years.
Boosting
the Berkshires
In
Massachusetts, the story of Berkshire Connect starts with
the frustrations of businessmen like Dubendorf who were confounded
by the high prices and poor services of their telecom carrier.
But the change in their fortunes may never have taken place
if it weren't for the Massachusetts Technology Collaborative
(MTC), a quasi-state government organization established to
boost the state's knowledge-based economy.
MTC
conducts knowledge-based research and also supports collaborations
among businesses, the academic world and government. "We're
a resource facilitator, providing businesses with best practices;
we show them the options that reduce barriers and improve
growth," explained Patrick Larkin, MTC's senior vice
president. MTC also provides small amounts of funding to help
get projects off the ground.
Back
in 1997, businesses in the Berkshires, both traditional and
new, were struggling with the fact that high telecommunications
costs were putting them at a huge disadvantage economically.
The nearest point of presence for the region was in Springfield,
Mass., more than 60 miles away. That meant businesses were
paying three or four times more than companies in Springfield
and Boston for telecommunications services.
Knowing
something should be done, but not sure what to do about it,
a small group of businessmen turned to MTC for help. Working
with the Berkshire Regional Planning Commission, MTC helped
set up a task force, which tried to gauge demand for broadband.
However, problems arose over technology issues, so a new steering
committee composed of technical experts from the area took
over and gave the group new direction.
The
committee quickly coalesced around the need for new infrastructure,
rather than pushing for a solution through legal and regulatory
changes that would force Verizon to lower its access fees.
"We decided to create an alternative to Verizon,"
said Dubendorf. "Verizon had a legacy of phone-centric,
not data-centric service. They didn't believe the investment
was worth it. But we did if we could find the right private
partner."
With
Berkshire Connect beginning to take form in terms of members,
the group realized they had to fully understand the structure
of returns on investment in the telecommunications universe
in order to find out what it would take to attract a new provider
to the area. They studied the available technologies and what
worked best in their geography, and they learned what it would
take to aggregate demand to attract a new provider.
One
thing they found out was Verizon had been distorting the level
of demand in the area, making it appear to be less than it
actually was, according to Dubendorf. That made them realize
the telecommunications market in the Berkshires was larger
than originally thought. Second, they realized the importance
of sticking together if they were to succeed in attracting
a telecom provider. This led Berkshire Connect to decide that
all members would get the same pricing, whether they were
General Electric, which has a plant in Pittsfield, or a two-person
dot-com firm.
Finally,
Berkshire Connect decided to pursue a partner that would deliver
telecommunications services that weren't part of the existing
Verizon network. While some providers were offering services
besides Verizon, it was done over Verizon's network. Without
new infrastructure, the businesses and institutions in Berkshire
County could not benefit from true competition.
Equal
Opportunity
Seven
providers responded to Berkshire Connect's RFP, which was
awarded to Global Crossing, in partnership with local firm
Equal Access Networks, to build and manage a new infrastructure
for the Berkshires and members of the Berkshire Connect initiative.
Two years ago, Equal Access came in to the region and began
providing voice and data services via a combination of fiber-optic
lines and wireless connections via rooftop antennas.
The
arrangement is somewhat unconventional, according to Daniel
J. Kelley, president of Equal Access Networks. "The project
was a leap of faith. I'm relying on [Berkshire Connect] to
continue giving us their business as a group and to make a
best effort in bringing new business to my firm. While the
project is based on the classic model of supply and demand,
the foundation in this case is trust."
So
far, that trust has paid off in spades for the members of
Berkshire Connect. To date, benefits include:
Facilities
investment in excess of $3 million.
Savings
on voice and data services for members, ranging from 40 percent
to 80 percent.
Over
50 businesses use Berkshire Connect for long distance, T1,
Internet, data, frame relay and private line services.
Over
70 T1 lines to members.
As
for MTC, its role was information broker and overall facilitator
for the members of Berkshire Connect who were having to think
regionally, something that doesn't come naturally to the independent-minded
attitude that prevails in the Berkshires. "We played
technology guru, filling in the gaps and helping them think
through the various technology options they faced," explained
MTC's Larkin.
Given
Berkshire Connect's high degree of success, MTC is working
with a number of other rural regions in Massachusetts and
New Hampshire to help fashion similar arrangements. Both Larkin
and Kelley admit that what worked in the Berkshires won't
necessarily work elsewhere. Already two other projects (not
with MTC) have failed because the affinity group splintered
when the local telecommunications carrier got wind of the
project and dropped prices to save market share.
But
with hard work, rural communities can succeed in attracting
high quality telecommunications service to their area. "Rural
areas are hard to serve," admitted Dubendorf. "But
by working on the demand side we thought we could improve
the market for providing telecommunications services."
And
they did.
Tod
Newcombe
Features Editor
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