Chairman Crawford, Ranking Member Costa, and members of this Subcommittee, thank you for the opportunity to testify this morning regarding Future Investments in Broadband.
The mission of the Rural Utilities Service (RUS) is to fund basic infrastructure services, including electric, telecommunications, and water and waste facilities in order to benefit rural America. RUS infrastructure investments deliver reliable, affordable electricity to power our homes and industries, broadband to expand access to education, healthcare, business and social services in rural areas, and clean, safe water to support healthy rural communities and meet the growing needs of rural America.
As Administrator of RUS, I am proud to lead an amazing group of people who are honoring their predecessors in the
The history of rural electrification and rural broadband has many parallels. In the 1930's it took a series of acts and appropriations to establish a public system for financing, designing, and planning rural electrification. Likewise, in the 21st Century, it will take a sustained focus from
The predecessor to RUS, the
As the nation headed into
The building of the rural electric infrastructure has facilitated the use of diverse energy sources, including renewable energy sources such as wind and solar power, and more. The modern business model for energy services is likely to be a consumer-driven platform where existing and rapidly advancing communications and electric technologies are shifting the electric utility delivery marketplace from a commodity-centric model to a consumer-centric model. Similarly, the telecommunications industry made a paradigm shift from the central switch of the telephone company to today's demand for ubiquitous broadband delivered through the network and ordered up on smart devices. Not surprisingly, the challenges faced during the electrification of rural America resurfaced as private broadband entities citing lack of end-users and profitability have not fully-expanded broadband infrastructure into rural areas.
As a result, RUS is as relevant in the 21st Century as REA was in the last century. RUS is actively positioning rural America - through broadband investments - to compete in the global economy, benefit from internet-based educational opportunities, and take advantage of telemedicine resources.
For example, in Arkansas RUS funded a telemedicine network through the Distance Learning and Telemedicine program that has permitted numerous patients, who previously would have been transported to
Recently a patient who underwent surgery returned to the local hospital two weeks later with a life-threatening blood clot in their lungs. Utilizing the telemedicine network, a specialist in
Rural Utilities Service and Broadband
The broadband loan and grant programs at RUS are intended to accelerate the deployment of broadband services in rural America. "Broadband" refers to high-speed Internet access and advanced telecommunications services for private homes, commercial establishments, schools, and public institutions. Currently in
Broadband access enables a number of beneficial applications to individual users and to communities. These include e-commerce, telecommuting, voice service (voice over the Internet protocol or "VOIP"), distance learning, telemedicine, public safety, and others. It is becoming generally accepted that broadband access in a community can play an important role in economic development.
Since 1995, RUS has been in the forefront of meeting rural consumers' demand by requiring broadband capable technology in all telephone loans in order to play a major role in closing the urban rural digital divide. Today, RUS is focused on funding and providing broadband to rural America through the traditional telecommunications program, the broadband program and the Broadband Initiatives Program (BIP) funded through the American Recovery and Reinvestment Act of 2009 (Recovery Act). Through Recovery Act investments alone, RUS awarded over
Broadband and Rural America
Access to affordable broadband is viewed as particularly important for the economic development of rural areas because it enables individuals and businesses to participate fully in the online economy regardless of geographical location. For example, aside from enabling existing businesses to remain in their rural locations, broadband access could attract new business enterprises drawn by lower costs and a more desirable lifestyle. Essentially, broadband potentially allows businesses and individuals in rural America to live locally while competing globally in an online environment.
Given the large potential impact broadband may have on the economic development of rural America, concerns have been raised over a "digital divide" between rural and urban or suburban areas, with respect to broadband deployment. While there are many examples of rural communities with state-of-the-art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. For example, according to the
The comparatively lower population density of rural areas is likely the major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies--such as cable modem, fiber, and DSL--the greater the geographical distances among customers, the larger the cost to serve those customers. Thus, there is less incentive for companies to invest in broadband in rural areas than, for example, in an urban area where there is more demand (more customers with perhaps higher incomes) and less cost to wire the market area.
The terrain of rural areas can also be a hindrance, in that it is more expensive to deploy broadband technologies in mountainous or heavily forested areas. An additional cost factor for remote areas can be the expense of "backhaul" (e.g., the "middle mile"), which refers to the installation of a dedicated line that transmits a signal to and from an Internet backbone, which is typically located in or near an urban area.
As a result, the economic impact on rural America of not having broadband is significant. For example, an economic study from
Broadband deployment is increasingly seen as providing a path towards greater regional economic development. From our long history of working with companies in rural America and providing capital for broadband infrastructure, we know that many rural areas, due to factors such as low population density and high costs associated with difficult terrain, have difficulty attracting the investment required for a sustainable broadband operation.
To meet the goal of increasing economic opportunity in rural America, RUS programs finance rural telecommunications infrastructure. RUS telecommunications programs, with a combined loan portfolio of
I thank the Committee and its members for their continued interest in broadband programs.
Read this original document at: http://republicans.agriculture.house.gov/sites/republicans.agriculture.house.gov/files/pdf/hearings/Padalino140729.pdf
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