Microsoft's Rural Push

Company Wants to Close Broadband Gap in Rural America

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A proposal by Microsoft could turn much of this map green in the next five years. (Graphic courtesy of Microsoft)

OMAHA (DTN) -- Microsoft has announced a potential way to provide broadband access to more than 23 million rural Americans using what is called "TV white space."

In an announcement on Tuesday, the company's president, Brad Smith, told an audience of the Media Institute in Washington, D.C., that Microsoft plans to invest its own money in a philanthropic effort to provide broadband access through what essentially is unused television space.

That includes providing broadband to about 2 million people in rural areas in the next year.

About 34 million people lack access to broadband, including about 23.4 million in rural America. Microsoft said its goal is to close that gap in the next five years.

Though talk of broadband expansion centers on 5G networks, Smith told the audience that 5G does nothing to provide broadband to rural America.

"The exciting part of TV white space is it can travel long distances," Smith said. When it comes to 5G, however, he said it is only good for broadband expansion in densely populated areas.

Microsoft is among a group of technology companies that have been pushing the idea for the past decade. Microsoft joined Google, Dell, HP, Intel, Philips, Earthlink and Samsung, among others, to form the White Spaces Coalition.

HOW THE TECHNOLOGY WORKS

In a Microsoft white paper released on Tuesday, the company described how the use on TV white space would work.

TV white space essentially is unused airwaves left by the termination of analog television as digital was implemented. Microsoft's idea is to access those white spaces using fixed wireless technology and satellite technology.

There is technology available that would allow rural residents to buy router-type devices to access the TV white space.

According to a white paper from the company, http://bit.ly/…, this approach would lead to the reduction of capital and operating costs by about 80% compared to using just fiber optics. It would save about 50% compared to the cost of current LTE fixed wireless technology.

"One key to deploying this strategy successfully is to use the right technology in the right places," according to the white paper. "TV white spaces2 is expected to provide the best approach to reach approximately 80% of this underserved rural population, particularly in areas with a population density between two and 200 people per square mile."

Microsoft already has deployed 20 TV white spaces projects worldwide serving about 185,000 users. There is potential in rural America to provide broadband at a much less costly amount compared to other available technologies.

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"But TV white spaces alone will not provide the complete solution," the white paper said. "Satellite coverage is expected to be the most cost-effective solution for most areas with a population density of less than two people per square mile, and LTE fixed wireless for most areas with a density greater than 200 people per square mile. This mixed model for expanding broadband coverage will likely bring the total national cost of closing the rural broadband gap to roughly $10 billion."

Microsoft said that to install 4G LTE in rural America would cost between $15 billion and $25 billion. The 4G LTE is the standard high-speed wireless connection. The costs to install fiber optics to rural homes would be $45 billion to $65 billion.

Microsoft plans to partner with companies in 12 states in the next year, including Arizona, Georgia, Kansas, Maine, Michigan, New York, North Dakota, South Dakota, Texas, Virginia, Washington and Wisconsin.

"Our goal is not to enter the telecommunications business ourselves or even to profit directly from these projects," the white paper said. "We will invest in the upfront capital projects needed to expand broadband coverage, seek a revenue share from operators to recoup our investment, and then use these revenue proceeds to invest in additional projects to expand coverage further."

The plan also includes providing training in rural areas through the company's Rural Airband Initiative, including the National 4-H Council.

In addition, Microsoft plans to stimulate investment in technology licensing "through royalty-free access to at least 39 patents and sample source code related to technology we've developed to better enable broadband connectivity through the use of TV white spaces spectrum in rural areas."

AG LEADERS WELCOME ANNOUNCEMENT

Johnathan Hladik, policy program director for the Center for Rural Affairs based in Lyons, Nebraska, said Microsoft is attempting to do what politicians have failed to accomplish.

"In a lot of ways, it looks like Microsoft has done what the Trump administration has failed to do, which is to develop a clear vision, a clear goal, and a clear timeline," Hladik told DTN.

"For years, politicians and others have given lip service to the need for expanded broadband in rural areas, but haven't supported those words with actions. Both adequate funding and innovative policy solutions have been missing. What Microsoft is proposing is not the public-private partnership we have become accustomed to. Their effort here is much more philanthropic in nature.

"Will other tech companies do the same? It is hard to say, but it would be a poor strategy to assume they will," Hladik said. "Closing the broadband gap certainly demands action from the private sector, but we should not wait around for similar examples of philanthropy."

R.J. Karney, director of congressional relations for the American Farm Bureau Federation, told DTN that having Microsoft involved is good for farmers and ranchers.

"Looking at the big picture, it's great to see Microsoft step up and begin an initiative to bring broadband to rural America," he said. "Access to broadband is essential for farmers and ranchers to utilize precision agricultural equipment, follow commodity markets, communicate with their customers, gain access to new markets around the world and regulatory compliance."

INDUSTRY, REGULATORY HURDLES

Microsoft faces two immediate challenges, Hladik said. First, some individuals and communities "just don't feel an urgent need" to access the technology.

"There are many counties that are getting along just fine with limited broadband access, and this may not be their top priority," he said.

In addition, there are a number of policy barriers that could stand in Microsoft's way. Currently, the Federal Communications Commission protects TV white space. Second, there is a need for matching funds at the state and federal levels, Hladik said, and there needs to be improved broadband data collection by the FCC.

"But there is a whole panoply of rules and regulations at the state level that must be accounted for," he said. "Each state is different, and some regulatory commissions may have laws on the books that limit technologies, carriers, or both. They will have to be realistic about what can and cannot be achieved and need to build strong relationships with key stakeholders now in place."

Microsoft also faces powerful opposition to the use of TV white space from the likes of the National Association of Broadcasters, which on Tuesday issued a scathing statement in opposition.

"It's the height of arrogance for Microsoft -- a $540 billion company -- to demand free, unlicensed spectrum after refusing to bid on broadcast TV airwaves in the recent FCC incentive auction," said NAB Executive Vice President of Communications Dennis Wharton.

"Microsoft's white space device development has been a well-documented, unmitigated failure. Policymakers should not be misled by slick Microsoft promises that threaten millions of viewers with loss of lifeline broadcast TV programming."

Microsoft acknowledges its efforts will succeed only with the help of the public sector. That includes having the FCC ensure at least three channels below 700 MHz, where white spaces are available, remain in place on an unlicensed basis.

"In addition, federal and state infrastructure investments should include targeted funds on a matching basis for the capital investments that will best expand coverage into rural areas that currently lack broadband access," the white paper said.

"Finally, there is a need for improved data collection on rural broadband coverage. The FCC can help by accelerating its work to collect and report publicly on the state of broadband coverage in rural counties, thereby aiding policy makers and the private sector in making targeted investments."

In June, USDA awarded four loans worth about $43.6 million to help provide broadband service in rural California, Illinois, Iowa and Texas, to add nearly 1,000 miles of fiber to fund broadband service.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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Todd Neeley