LAS VEGAS--The new 4G wireless broadband network that Verizon Wireless plans to launch in 2010 could be rural America's answer to its broadband access prayers. But extending the network to every nook and cranny in the U.S. will likely take years.
Tony Melone, senior vice president and chief technology officer for Verizon Wireless, said during an interview at the CTIA Wireless 2009 tradeshow here Wednesday that the new 4G network that the company is building will blanket the entire continental United States, including the far corners of rural America.
"The licenses we bought in the 700MHz auction cover the whole U.S.," Melone said. "And we plan to roll out LTE throughout the entire country, including places where we don't offer our CDMA cell phone service today."
If Verizon makes good on this promise, it will be helping to bridge a widening gap between broadband haves and have-nots in this country. While Verizon Wireless' parent company Verizon Communications and other broadband providers have concentrated on building wireline broadband infrastructure in densely populated areas, such as cities and sprawling suburbs, they have not done a good job of extending that infrastructure to rural America.
The problem has been that building infrastructure for land-based broadband networks is expensive. And companies, such as AT&T, Verizon and Comcast say they can't make profits by offering service in sparsely populated regions because the cost to build these networks is too high and the number of potential customers is too few. And even though the federal government has provided some $1.2 billion in loans aimed at helping operators in the private sector build broadband networks in remote areas, the money hasn't been stretched to reach every community.
While broadband penetration has increased in rural areas over recent years, it's still not nearly at the same level as more densely populated regions. Only about 38 percent of rural American households have access to high-speed Internet connections, according to a study published by Pew Internet & American Life Project in July. This compares with about 57 percent of city dwellers who have access to broadband and 60 percent of people living in suburbs.
The result has been small towns and communities throughout the country that still have no access to high-speed Internet services. These communities have been stuck in dial-up limbo, waiting for the 21st century technology revolution to reach them. It's made it harder for businesses to grow and compete in the increasingly connected and tech savvy market. It's meant that workers have had a harder time finding jobs. And it's left an entire population less connected to important news and information that is increasingly found online.
Melone said that the spectrum Verizon acquired in last year's Federal Communications Commission's auction is ideally suited to help solve this problem. The spectrum that is being used to build the new network is in the 700 MHz band. Up until now, it has been used to broadcast analog TV.
Because the spectrum is in a lower frequency, it can transmit signals over longer distances and penetrate through obstacles. And because the signals travel longer distances, Verizon can deploy fewer cell towers than if it used spectrum from a higher frequency band, which means it can provide coverage at a lower cost.
Even though Verizon is primarily building the 4G wireless network to provide faster service for mobile devices, Melone said the network could also be used to provide fixed broadband access to rural homes.
"I can't pre-announce any products or services," he said. "But I can envision offering devices that are geared toward putting wireless broadband in the home. And then people could use Wi-Fi to share the connection with multiple devices like they do today with router connected to their DSL or cable modem service."
President Obama's administration is well aware of the high-speed Internet divide that exists today, and he has vowed to do something about it. As part of the overall economic stimulus package passed by Congress, the government is allocating $7.2 billion for projects that bring broadband Internet access to rural towns and communities.
Melone said it's too early to say if Verizon will request money from the government as part of the package to fund building its network in rural communities. But he said that with or without government money, Verizon is committed to providing service in rural areas via its 4G network.
"At this point we haven't made any attempt to get stimulus money for the LTE build-out," he said. "But it's still early in that process and there's not enough clarity around the stimulus package. We don't know what strings will be attached to that money. Regardless, we plan to blanket the country over a period of time with 4G. We bought the licenses to cover the entire continental U.S., and we plan on building the network where ever we have a license."
Still, rural Americans may have to wait years before Verizon's 4G network comes to them. Dick Lynch, CTO for Verizon Communications, said in February during an interview that the 4G network deployment would likely follow the plan used to build Verizon's 3G network. Under that plan, Verizon started with large metropolitan areas and filled out coverage from there. Verizon has said it plans to reach 20 to 30 markets by the end of 2010. And it will continue to add more coverage steadily after that, Melone said.