Digital Divide: Virus Spotlights Arkansas' Broadband Deficit

Nathan Smith, who  oversees the Arkansas State Broadband Office, decries the state’s ranking in broadband access.
Nathan Smith, who oversees the Arkansas State Broadband Office, decries the state’s ranking in broadband access. (Karen E. Segrave)

The coronavirus pandemic, which has pushed much of daily living online, highlights Arkansas’ status as a laggard in broadband deployment and illustrates the digital divide between broadband haves and have-nots.

“Broadband internet is a great equalizer. It brings opportunities that we haven’t even fully realized and, in the post-COVID world, are going to be absolutely critical going forward,” said Elizabeth Bowles, who chairs the national Broadband Deployment Advisory Committee and is president and chairman of Aristotle Unified Communications in Little Rock.

Providers and state officials told Arkansas Business the main barrier to expanding and improving access is the expense. Bringing access to rural areas makes for a weak business case, they said.

Rural areas have fewer prospective customers, and deploying broadband is a per-mile — not a per-customer — expense. The more customers there are to pay for a service, the more sense it makes to invest in bringing them access. It works the other way, too.

However, deployment projects were underway before the coronavirus outbreak, and are still proceeding. New projects will be funded as well, by federal dollars meant to help the state get through the crisis.

ARC Program

The Arkansas Rural Connect grant program was established nearly a year ago to help qualifying communities of at least 500 people deploy high-speed broadband to their residents.

Speeds of at least 25 megabits per second for downloads and 3 megabits per second for uploads must be offered. That’s the Federal Communications Commission’s definition of broadband.

Money for the program was to come from the state’s general revenue fund; then the pandemic presented an opportunity for speedier implementation. Of the $1.25 billion the state received through the federal Coronavirus Aid, Relief & Economic Security Act, $19.3 million will go to the ARC program.

Gov. Asa Hutchinson and the steering committee he created to guide the spending of CARES Act funds approved that use of the money, said committee chair Elizabeth Smith and Steven Porch, chief legal counsel for the Arkansas Department of Commerce.

In addition, another $2.3 million will be spent on the state’s Rural ID Broadband Program, which assists organizations in applying for other grants to fund broadband deployment.

There’s one caveat. This money must be spent by Dec. 30, they said.

So the Legislature passed an emergency rule that allows the ARC program to pay grant money to providers in advance and gives the Arkansas State Broadband Office that runs it the flexibility to prioritize rapid deployment, said Nathan Smith, the state’s first broadband manager. He oversees that office, which the governor created in July 2019.

To qualify for an ARC grant, projects cannot have received federal funding through other programs, such as the FCC’s Connecting America Fund. Applications for ARC grants are being accepted through Aug. 15, with the awards set to be announced by Nov. 1.

Monetarily, ARC is a good start, but not sufficient to bridge the digital divide, according to Bowles of Aristotle. Her company has a deployment project underway funded by FCC dollars.

She also cited the FCC’s new $16 billion Rural Digital Opportunity Fund Phase I Auction as a good opportunity for Arkansas. Through it, providers can receive funding for deploying broadband internet in certain locations.

Bidding will begin on Oct. 29, with the application window for potential bidders opening on July 1, according to FCC spokesperson Anne Veigle. In Arkansas, 201,944 locations will be eligible.

Current and Planned Broadband Coverage in Arkansas

This map was compiled, in accordance with the Arkansas Rural Connect rules, by the Arkansas State Broadband Office, based on Form 477 data from the FCC (June 2019) combined with information provided by internet service providers in Arkansas about the areas where they are either providing broadband internet service with 25-megabits-per-second download and 3 Mbps upload speeds or obligated to deploy 25/3 broadband in connection with federally funded projects.

The blue areas in the map represent areas that are currently served or scheduled to receive 25/3 service and are not targeted for grant funding by the Arkansas Rural Connect program. White areas in the map are not currently served or scheduled to receive service, so they are eligible for deployment projects funded by the Arkansas Rural Connect grant program.

‘Dead Last’

“Arkansas is ranked 41st of 50 states by, in terms of broadband access, but we’re actually 50th of 50, dead last, in the share of the population that has access to broadband,” Smith said. He believes that the state moved up in rankings because of policy changes it has made.

Smith identified four main ways to deliver broadband internet service: traditional cable, fiber optic cable, DSL (through phone lines) and fixed wireless, which refers to a last-mile technology that transmits data from a wireless tower to a fixed antenna at a home or business.

Arkansas is in the bottom 10 states for DSL, cable and fiber optic coverage, he said. It’s also in the bottom half of states for fixed wireless coverage.

Barriers to Progress

Alan Morse, CEO of Ritter Communications in Jonesboro, best explained the expense barrier.

“Like any for-profit company, we have obligations to our shareholders to make sure we do what we can with an appropriate level of return on the investment that we’re making. So that’s one consideration. I wouldn’t call it an obstacle, necessarily, but it’s a consideration,” he said.

Geography is also important. For example, installing a mile of fiber optic cable through Arkansas Delta farmland costs $35,000-$40,000, he said. In a mountainous area, it costs $180,000-$200,000.

Another big barrier has been political, Bowles said, with 30-plus broadband-related bills failing in Arkansas over the last decade or so. Just last year, the state lifted a prohibition on municipal ownership of broadband, clearing the way for public-private partnerships.

The few bills Bowles pushed for were defeated by traditional telephone companies because, Bowles said, there had been this idea that others should stay out of their territories.

The counterargument is that telephone companies wanted potential competitors paying the same taxes and paying fees to attach broadband technology to poles, Morse said, and to ensure taxpayer funds wouldn’t be used to artificially lower customer prices.

“That attitude is shifting,” Bowles said, “because we can’t afford that attitude anymore. And so we’re seeing now everybody pulling in the same direction. ... So you’ve got the state, the counties, the municipalities and the providers all lining up in the same way and saying, ‘OK, how can we get this solved and how can we get this solved quickly?’”

‘An Essential Thing’

Since COVID-19 struck, people have been using the internet to do everything: to work, learn, access telehealth and entertainment, shop for essentials, etc.

“I think it’s become one of those products that it’s viewed as no different than electricity, water, you know. It’s an essential thing for people in this time of our history. … I think COVID has shined a light on an issue that we’ve been struggling with for a long time,” said Buddy Hasten, president and CEO of Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives Inc. “And it’s important that influential people in our country are now more aware of it than they were and they are probably more willing to do something about it.”

Smith said, “It will be interesting to see in the coming years how much people’s habits have changed, how lastingly people’s habits have changed. Certainly, all of these new uses of broadband, new and more urgent uses of broadband, are a further reason to prioritize broadband deployment.”

Several sources said online education will remain important, and Bowles added that some children who didn’t have internet access at home may be up to a year behind peers who had access.

The digital divide creates a system of “haves and have-nots,” she said, leading to people being deprived of opportunities, including the ability to work from home.

Access is also important, Hasten and others said, because internet service quality is a factor in where people choose to live and where they go into business.

Millions Invested

Hasten estimated that electric cooperatives in Arkansas have invested about $800 million in expanding access to their member-owners. He believes that will reach $1 billion as they deploy broadband in the state over the next four to six years.

Windstream Holdings Inc. of Little Rock has invested $135 million in Arkansas on expanding and improving its network, said Brad Hedrick, president of Windstream Operations in Arkansas.

In the past decade, Ritter has spent about $120 million to expand and improve its network in four states, Morse said. It expects to spend another $50 million in the next three years.

AT&T spokesperson Jim Kimberly said it had invested more than $625 million from 2016-18. The company plans to extend service to more than 41,000 rural homes and businesses in Arkansas with help from the FCC’s Connect America Fund. It is set to complete 10,000 hook-ups this year.

Comcast couldn’t offer Arkansas-specific data but is actively looking at opportunities, spokesperson Alex Horwitz said.

Bridging the digital divide in Arkansas will take “money, time and commitment,” Bowles said. Hasten said it will take “all hands on deck.”