Capital Hill Hearing on Broadband

Paul Carliner, Co-Founder of Bloosurf LLC appeared before the House Small Business Committee on Health and Technology and the Subcommittee on Agriculture, Energy and Trade on March 6th 2018.

He explained that Bloosurf is a rural high speed internet service provider located in Maryland on the Eastern Shore. The company provides service to homes, businesses, schools, hospitals, and to residents living on an island in the Chesapeake.

He said, “The digital divide between urban and rural America is growing and getting worse. Major urban and suburban areas continue to see robust capital investment in internet infrastructure, including the roll out of the new 5G mobile service later this year. However, rural America is still struggling with providing basic internet service.”

USDA’s Rural Utility Services awarded $3.3 million to Bloosurf in 2010 to build a new, state-of-the-art fixed wireless LTE network covering about 100,000 households across three rural Maryland counties on the lower Eastern Shore.

As Carliner explained, “Bloosurf was able to design, build, and now operates the last mile network which covers three counties for $2.2 million. The network was built on time and over one million dollars was returned to the government. Also, a new low-cost model to provide high speed internet service to rural areas has been validated.”

He presented several recommendations from lessons learned by his company as a small rural internet service provider to the House Subcommittees. The first recommendation is for a sustained public investment to be made by local, state, and the federal government.

Without this public investment, the business case for private investment in rural broadband is poor since capital expenditures are high and the revenue stream is low which is why large national wireless companies and cable companies do not invest in the rural market.

Carliner suggests that the most effective and efficient form of public investment would be to provide direct capital grants to assist small rural internet service providers build the last mile infrastructure. The grants could cover the capital costs including design and construction to enable the small internet service provider to provide high speed internet service to small subscribers.

Each community needs a customized solution that uses the correct technology solution that is appropriate and sustainable for that community. For example, in some communities, fiber to the premises may be a viable option, but in other areas, fixed wireless or satellite may be more appropriate or perhaps using a combination of the technologies may be the best solution.

He also commented. “The federal strategy to help expand rural high speed internet service must focus on the last mile as previous public investments have focused heavily on the middle mile. After a decade or more of public and private investment in the middle mile, the federal government should focus on how to monetize that investment by actually providing service into homes and business.”

It is also important for small rural internet service providers to have access to affordable licensed spectrum which will produce greater speeds and faster service and for the internet service provider, it would mean lower operating costs and higher margins.

Finally, there should be a mechanism to share and exchange information between the federal government and rural internet service providers when it comes to cybersecurity. Many internet service providers do not have the expertise and resources to invest in the latest cybersecurity technology and are often forgotten when setting national policies to allocate federal resources.

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