The Internet Slow lane
andre.kesteloot at verizon.net
Sat Sep 30 15:18:16 CDT 2006
International Herald Tribune <http://www.iht.com>
Rural states could wind up in Internet's slow lane
By Ken Belson The New York Times
THURSDAY, SEPTEMBER 28, 2006
*CANAAN, Vermont* For most businesses, the goal is to attract as many
customers as possible. But in the fast- changing U.S. telephone
industry, companies are increasingly trying to get rid of many of theirs.
Bill and Ursula Johnson are among the unwanted. These dairy farmers in
northeastern Vermont wake up before dawn not just to milk their cows but
also to log on to the Internet.
Their dial-up connection is so weak that the only time they can reliably
get onto the Web site of the company that handles their payroll is at 4
a.m., when it is less busy. Johnson doubles as state representative for
the area, and he does not even bother logging on to deal with that. He
communicates with colleagues in Montpelier, the capital, by phone and
The Johnsons' communication hurdles could soon get worse. Instead of
upgrading them to high-speed Internet access, Verizon, their local phone
company, is looking to sell the 1.6 million local phone lines it
controls in Vermont, New Hampshire and Maine. The possible sale is part
of an internal plan called Project Nor'easter, according to a person
with knowledge of the details.
A Verizon spokesman, John Bonomo, would not comment on the plan but said
the company "continually evaluates the assets and properties in our
portfolio for strategic fit and financial performance."
Verizon is not alone in its desire to reduce the number of land lines it
owns. Big phone and cable companies are reluctant to upgrade and expand
their networks in sparsely populated places where there are not enough
customers to justify the investment. Instead, they are funneling
billions of dollars into projects in cities and suburbs where the
prospects for a decent return are higher.
But such networks are unlikely to reach rural areas of Vermont and other
states, leaving millions of people in the Internet's slow lane, just as
high-speed access is becoming more of a necessity than a luxury. The
United States already lags behind much of the industrialized world in
If Verizon does sell the New England lines, it would most likely be to a
smaller company or private equity group that could be even less capable
of offering fast Internet access. That prospect has Vermonters fearful
that the exodus of jobs and employers from the state could accelerate.
"We have companies that lose money because they don't have broadband,"
said Maureen Connolly, a director at the Economic Development Council of
Northern Vermont. "We're not a third- world country. We shouldn't have
to beg for service."
The proceeds from any sale of New England lines would help Verizon pay
for the potentially more lucrative fiber optic network it is building in
and around cities like New York and Boston. The network is part of
Verizon's push to transform itself into a fast- growing technology
company and shed its image as a stodgy utility.
The possibility that Verizon may sell local lines is another sign of how
much the phone business has changed in the last half-decade.
Verizon and other former local phone monopolies argue that since the
cellphone, cable and Internet companies that are luring away millions of
their customers are not compelled to serve remote and rural places, then
they should not have to bear that burden, either.
In Vermont, Verizon has broadband available on just 56 percent of its
330,000 lines, compared with 95 percent for most local phone companies,
which receive substantial federal subsidies. Without the same aid,
Verizon must bear more of the financial burden to upgrade its network.
"Vermont, like all rural states, has higher fixed costs of providing
service," said Polly Brown, president of Verizon Vermont, where the
number of land lines has declined 9.1 percent since 2002. "You're
spreading those costs over fewer customers, who are located far and
wide, and you're dealing with topographical challenges such as mountains
and a rock base."
Vermont residents, unions and politicians do not dispute that the phone
business is challenging, but they say residents will have a harder time
telecommuting or home-schooling their children.
Towns like Canaan will not have access to the growing number of
government records kept online, they say, and hotels and other tourist
attractions will have a harder time attracting outsiders.
In places where Verizon does not sell high-speed Internet, some people
have the option of getting broadband from their cable provider.
But in Vermont, cable companies have focused on more populous towns like
Montpelier and Burlington, the state's largest city.
Cable coverage in the northeastern part of the state is spotty.
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