Chapter 9

RURAL BROADBAND: The Electricity of the Twenty-first Century

When you approach the Knotty Pine Restaurant & Lounge on the main drag in Republic, Washington, you know you’re in a former Old West boomtown. The cedar false front gestures to an age when ramshackle mining and logging towns were built in a hurry. But the bright yellow placard hanging at the door declaring “Bikers Welcome” reminds you that this small town is squarely in a new era.

We’d spent the morning taking a left instead of a right, and then a right instead of a left, driving our rental car on a circuitous path down ranch and farm roads. It’s a beautiful place, so we didn’t mind the detour. But we had an appointment to keep and our GPS had proven useless in the northeastern corner of the state. We finally ditched our smartphones and followed State Route 20 on a paper map to Ferry County and straight into town, where a small group of locals were expecting us before lunch.

Ferry County persistently has the highest unemployment rate in the state, topping 16 percent when the region’s agricultural work falls with the winter temperatures. We’d come from King County, home of Microsoft, Amazon, Starbucks, Costco, and Boeing. With an unemployment rate that hovers well below 4 percent, King County has led the state in growth that boasts twice the national average. We wondered how Ferry County could tap into the twenty-first-century boom taking place on the other side of the Cascade Mountains.

The Knotty Pine promised breakfast all day, so for $5.95 we ate scrambled eggs, bacon, and maple-syrup-drenched pancakes so big they draped onto the table. After our long drive, the food was welcome, but it was quickly dimmed by the hospitality.

Originally called Eureka Gulch by the prospectors who founded the small town at the end of the nineteenth century, Republic rests in the valley between the pine-draped Wauconda and Sherman passes of northeastern Washington. The Sherman Pass is named after the famous Civil War general William Tecumseh Sherman, who traveled across it in 1883. It’s breathtaking country and an outdoor enthusiast’s dream.

The town’s past was defined by the golden veins that snaked through the surrounding granite and bore deep into the river gulches. Banking, transportation, and other supporting services soon followed the miners—and later the loggers—to town. Today, the mines are closed, and the region is struggling to redefine its future.

When we arranged our meeting, Elbert Koontz, a former logger and now the town’s mayor, told us that he would put on his “best sweats” for our lunch. I was disappointed when he instead showed up in pressed pants. While Elbert was generous with his knowledge and quips, he didn’t laugh when I asked about the state of high-speed broadband in Ferry County. He just rolled his eyes.

“Almost no one around here has broadband,” he said. “Promises have been made for years, but nothing’s been done.” But according to data from the Federal Communications Commission, or FCC, every person in Ferry County had access to broadband.

Thanks to a fiber-optic line traversing the Sherman Pass, the tiny town’s center, home to around a thousand people, has some broadband access. But it was clear that the rest of the region’s residents were lacking. “The problem is that here, we live up in the woods,” Elbert told us. “I mean, when you go out of town, you’re out of town, folks.”

The mood shifted as the crowd nodded in agreement and shared their stories of broadband woes. Some relied on spotty satellite connections. Others came to town to tap into hotspots even just to download software upgrades for their laptops. Others were hopeful 5G would save the day. But it was unanimous around the table: The vast majority of Ferry County didn’t have reliable high-speed broadband access.

“Tell that to the FCC,” someone scoffed.

In fact, that’s what we did.

A few months later, we dodged rain and traffic on Twelfth Street as we made our way to the FCC headquarters in Washington, DC. We had come to meet with FCC chairman Ajit Pai. After we checked in and passed through the security screening, we were ushered into his office.

Chairman Pai greeted us with a smile. “Thanks for coming! What can I do for you?”

Family photos lined his shelves and the windowsills of his office overlooking the soggy capital. He’s a first-generation Indian American who was raised in Kansas by doctors who immigrated to the country just two years before he was born.

I told him about our trip to Ferry County and the situation on the ground. The FCC’s national map shows that everyone in Ferry County has access to broadband. Everyone.

To Pai’s credit, the FCC is focused on bringing broadband to every American, but it’s a daunting and expensive problem to solve, especially when you don’t truly understand how big the issue is. “You’re not the FCC chairman who created this problem,” I said, referring to the flawed data. “But you can be the chairman who fixes it.” It needs to be treated as a national priority.

Like the Mayor of Republic had described to us, much of the federal government’s data about Ferry County—and rural America, for that matter—is wrong. People throughout Ferry County were aware of this, which did little to instill confidence in their government. For these people, the inaccurate data is more than a small inconvenience. It impacts the allocation of federal funding for broadband, which doesn’t flow to areas that the government believes have access already. And even more broadly, this lack of access impairs other critical public resources, such as those needed to fight wildfires that can rage through the West each summer.

“It’s the Wild West out here,” Elbert said. “We don’t have a huge sheriff’s department, we don’t have a huge fire department, we don’t have any of that. All our firefighters are volunteers.” And those volunteers find themselves in perilous conditions when fires ravage the landscape.

In 2016, a fast-moving fire broke out when hot August winds ripped down a power line and fanned the resulting flames in northern Ferry County. Within five hours, an inferno had consumed more than twenty-five hundred acres and was growing.1 Portions of the affected community were under a Level 3 evacuation, which translates to “get out now.”

The spotty cellular infrastructure and lack of broadband made it impossible to transmit critical data to and from the fire lines to keep authorities updated on where the fire was headed and who needed to evacuate. The only way to share crucial information between firefighters, the forest service, and law enforcement was to load data onto a memory stick, hand it to a driver in a pickup truck, and wait for the truck to travel forty minutes from the fire line into Republic, where authorities could use the broadband and radio connections.

When a fire can turn a 20-mile-an-hour wind into a 50-mile-an-hour gale in a minute, according to Elbert, “that’s just plain dangerous.”

The Americans stranded in the dial-up era aren’t confined to Ferry County. They are in every single state in the country. According to the FCC’s 2018 broadband report, more than twenty-four million Americans, more than nineteen million of whom live in rural communities, lacked access to fixed high-speed broadband.2 That’s roughly the population of New York state.

This lack of broadband in rural communities isn’t a question of affordability—these people can’t buy the service if they want it. Many rely on dial-up technology to transmit data over copper lines, unable to access online services most of us take for granted at basic download and upload speeds.3 In other words, a significant portion of rural communities lack the internet speeds that were available in urban areas over a decade ago.4

While that figure is sobering, there is strong evidence that the percentage of Americans without broadband access is much higher than the FCC’s numbers indicate. As we analyzed this data, we found that it was based on flawed methodology. The FCC concludes that a person has access to broadband if a local service provider reports that it could provide such service “without an extraordinary commitment of resources.”5 But many such companies don’t provide this service in practice. It’s like telling someone they have access to a free lunch if a local restaurant says it could serve it to them if it wanted. It doesn’t mean the restaurant will.6

In fact, other data paints a very different picture of the country. For example, the Pew Research Center has been tracking internet usage since 2000 through regular surveys. According to its latest data, 35 percent of Americans report that they don’t use broadband at home—or roughly 113 million people.7 And even the FCC’s own subscription data indicates that 46 percent of American households fail to subscribe to the internet at broadband speeds.8

While there’s a difference between broadband availability and usage, this difference is so large that one must ask whether one of these figures is just plain wrong. We asked our own data science team to do more detailed work based on public and Microsoft data sources. Their research suggests that the Pew numbers are much closer to the mark than the estimate from the FCC.9 But even more than that, this leaves us with the inescapable conclusion that today there exists no fully accurate estimate of broadband availability in the United States, anywhere.

Does this matter? You bet, and in a big way.

Broadband has become the electricity of the twenty-first century. It’s fundamental to the way people work, live, and learn. The future of medicine is telemedicine. The future of education is online education. And the future of agriculture is precision farming. Even with a future where there is more computing intelligence “at the edge”—meaning with ubiquitous small and powerful devices that process more data themselves—there still needs to be some high-speed access to the cloud. And that requires broadband.

Today, rural areas that lack broadband are still living in the twentieth century. And it shows in almost every economic indicator. Our data science team confirmed what universities and research institutions around the world have been finding: The highest unemployment rates in the country are frequently located in the counties with the lowest availability of broadband, highlighting the strong link between broadband availability and economic growth.10

When you talk to business leaders about where they might expand their operations and add jobs, this requirement surfaces almost immediately. Asking them to open a new facility in a place without broadband is like asking them to set up shop in the center of the Mojave Desert. In a world reliant on modern high-speed access to data, an area without broadband is a communications desert.

The lack of job growth impacts every part of the local community. In hindsight, in November 2016, after the US presidential election, it should have come as no surprise that rural communities felt forgotten. For many in these areas, it seemed as if the nation’s economic prosperity had made a hard stop at the border of our urban and suburban counties.

Rural counties across the country like Ferry County had helped put a populist into the White House. We had started our trip in King County, where Seattle is located and where only 22 percent voted for Donald Trump. In Ferry County, only 30 percent voted for Hillary Clinton.11 When it comes to the nation’s politics, the two counties are polar opposites. A day with time divided between the two places provides the opportunity to understand a divided nation more clearly.

This also points the way toward at least part of what it will take to create a brighter future for rural areas.

The Center for Rural Affairs understands the challenge at almost an intuitive level. Operating from its three offices in Iowa and Nebraska, it speaks with the plainspoken language of the center of the country. “We are unapologetically rural,” the group says. “We stand up for the small family farmer and rancher, new business owner, and rural communities.”12

As it turns out, the Center for Rural Affairs also has details and numbers to make the economic case for broadband adoption. Its 2018 report titled Map to Prosperity shows that eighty new jobs are created for every one thousand new broadband subscribers.13 An increase of four megabits per second in residential broadband speed translates to an annual increase in household income of twenty-one hundred dollars. And people looking for work find a job 25 percent more quickly through online searches than through more traditional approaches.14

Today’s dismal state of rural broadband in America has several causes. First and most important, installing traditional broadband and internet alternatives is expensive. Industry estimates suggest that installing fiber-optic cable—the traditional gold standard of broadband service—can cost thirty thousand dollars per mile.15 This means that delivering sufficient broadband to remote parts of the country would cost billions of dollars, an expense the private sector has not yet been willing to pay.16 Yet each year, the FCC’s universal service mechanism and legacy programs provide eight times as much funding for landline carriers as it does for wireless carriers through its Mobility Fund and legacy programs.17

But this points to the second problem. Until recently, the development of alternatives to fiber-optic cable has been slow and uneven. While mobile telecommunications technologies such as 4G LTE have given customers broadband-like speed through smartphones and other mobile devices, this technology is better suited for more densely populated areas. Satellite broadband can be the right solution in very sparsely populated areas, but it often suffers from high latency, lack of significant bandwidth, and high data costs.

Third, regulatory uncertainty has contributed to challenges in bringing broadband to rural America. For example, providers seeking access to critical rights of way for network facilities often face confusing federal, state, and local permitting rules that add time and expense to projects.18

Finally, there is a perception that weak demand for broadband in rural areas cannot support private investment. If progress requires fiber-optic cables that generate a market return on a cost of thirty thousand dollars per mile, that’s an accurate perception. But it also misses an important point. Rural demand is present and real. The market could go to work with an approach that’s less costly.

This is where history and technology intersect, with an important insight for the future.

History shows that wired technologies like cable TV, electricity, and the landline telephone always take much longer to reach rural areas than wireless technologies like radio, TV, and the mobile phone. It took forty years for the landline telephone to reach 90 percent penetration, yet the cell phone reached the same threshold in just a decade. You never hear about the world needing to solve a radio or TV gap—these wireless devices were adopted quickly and were plug-and-play, latching on to the right frequency to work.19 The lesson is obvious: If it’s possible to shift from fiber-optic cables to wireless technology for broadband, we can spread broadband coverage farther and faster and at a lower cost—not just in the United States, but around the world.

Over the past decade, a new wireless technology has been emerging to fill this gap. It’s called TV white spaces, and it uses the vacant channels in the TV band where signals travel a long distance. If you grew up before cable television, you either relied on a large antenna on the roof or spent time adjusting the family TV’s “rabbit ears” to catch the VHF or UHF signal—the strong terrestrial signals that can travel for miles, around hills, through trees, and through the walls of our homes. Many VHF and UHF channels currently go unused and can be devoted to other purposes. And with newly developed database technology, antennae, and end-point devices, we can harness this space by connecting a TV white spaces tower to a single fiber-optic cable and rely on these wireless signals to reach towns, homes, and farms more than ten miles away.

By coincidence, I had flipped the switch to help turn on Africa’s first live demonstration of TV white spaces technology. It was in 2011 at a United Nations conference in Nairobi, Kenya, and we enabled attendees to use the Xbox at broadband speeds over the Internet based on a TV white spaces signal that traveled a mile. Kenyan government officials were among the first to recognize the technology’s potential, and we continued to work on it with them and several other governments. In 2015, I went back to a small rural Kenyan village on the equator, where only 12 percent of the population even had electricity. But we had partnered with a start-up to bring broadband speeds to people using TV white spaces. And I sat down and talked with teachers about rising student test scores and people who had jobs that had been unimaginable in the community just a year before.

By 2017, we concluded that TV white spaces technology was ready for broader adoption at scale, including in rural areas across the United States. After several months of planning, we launched in July what we called the Microsoft Rural Airband Initiative at the Willard InterContinental hotel in Washington, DC.

We pledged to bring broadband coverage to two million additional Americans in rural areas within five years—by July 4, 2022. We would not enter the telecommunications business, but we would partner with telecom providers and deploy a mix of wireless technologies, including new wireless devices using the TV white spaces spectrum. We pledged that for five years we would reinvest every dollar of profit from these endeavors to further expand coverage. We called for national policies to make broadband more accessible in rural areas, and we announced that we would launch twelve projects in twelve states within twelve months. And then we would grow from there.

We chose the Willard hotel for a reason—not only to attract the attention of federal lawmakers, but as a nod to a special occasion that took place at that same spot on March 7, 1916. Alexander Graham Bell, the leaders of American Telephone &Telegraph, and luminaries from across the nation had gathered at the grand hotel for a lavish banquet hosted by the National Geographic Society to celebrate the fortieth anniversary of Bell’s invention of the telephone. AT&T’s leaders, however, wanted to do more than celebrate the past. They had developed a plan to use the evening to sketch a bold vision for the future.20

Theodore Vail, AT&T’s president, wanted to inspire the nation with a vision of bringing long-distance telephones to every corner of the country, no matter how remote. It was a cause the country seized with gusto. Until that evening, people thought of commercial telephone service as something that was confined to intercity lines between the biggest cities in the country and to a few other small telephone exchanges. “Is it too much that in time it will be possible for anyone at any place to immediately communicate with anyone at any other place in the world?” Vail asked the crowd.21

As we know today, it was possible. And then the nation made it real. Part of our point was that the country had conquered this type of challenge before, and we were confident it could do so again.

While we committed our Airband program to bring broadband to two million people, we were clear that our real goal was much bigger. We wanted to use technology to harness the power of free enterprise and set in motion new market dynamics that would close the rural broadband gap more quickly for everyone. It meant using our funding in part to accelerate hardware innovation by chip makers and manufacturers of the end-point devices that would bring these signals into homes, offices, and farms, where they are converted to local Wi-Fi signals. It also meant bringing together small telecommunications providers into a buyer’s consortium so they could purchase these devices and secure the volume discounts available only to larger purchasers.

We found we could be more targeted and move faster than any government, making progress more quickly than we anticipated. In the first seventeen months after announcing the Airband initiative, we entered into commercial partnerships in sixteen states. These partnerships will bring broadband coverage to more than one million people who lacked this access before this work began. Progress was fast enough for us to raise our ambition by the end of 2018, declaring that we would bring this coverage by 2022 not to two million people but to three million. And if additional steps are taken, it should be possible for this technology to go even faster.

Perhaps not surprisingly, Microsoft’s announcements have struck a nerve. Radio talk shows and newspaper editorials in rural communities across the country have lit up with support. And we’ve been besieged by calls from governors and members of Congress looking for their states and districts to be added to our list.

One key to deploying this strategy is to use the right technology in the right places. We expect that TV white spaces and other fixed wireless technologies will ultimately provide the best approach to reach approximately 80 percent of the underserved rural population, particularly in areas with a population density between two and two hundred people per square mile. But other technologies, including cable-based and satellite approaches, will be needed in other areas. We believe this hybrid approach can reduce the initial capital and operating costs for the country by roughly 80 percent compared with the cost of using fiber-optic cables alone, and by approximately 50 percent compared with the cost of current LTE fixed wireless technology.

People sometimes look at us quizzically when they hear that the Airband initiative will reinvest revenue from telecommunications partnerships rather than make a profit. Why would a company spend its money this way? As we point out, the entire tech sector, including Microsoft, will benefit when more people are connected to the cloud. In addition, we’re building new applications that people can put to work in rural areas once they’re connected. One of our favorites is called FarmBeats, which uses TV white spaces to connect small sensors across farmland to enable precision techniques that improve agricultural productivity and reduce environmental runoff. If we can find new ways to combine doing good with doing well, we open the door to even more investments that can reignite economic growth in rural areas.

Even with these market dynamics, however, it’s important to recognize that the public sector has an important role to play in closing the broadband gap. First, we need regulatory certainty to ensure that the necessary TV white spaces spectrum remains available. While some of the TV band has been auctioned off and licensed to mobile carriers, it’s important to ensure that at least two usable channels remain available to the public for TV white spaces technology in every market, with more available in rural areas. The good news is that a lot of work has already taken place and continues.

We also need public funding that is better focused in part on new technologies and not simply trying to lay expensive fiber-optic cables in the ground. Government funding can have the biggest impact at the lowest cost if it includes an opportunity for targeted funding to match money for capital investments by telecommunications companies. That’s what will accelerate this work and help reach parts of the country that the private sector might be slower to reach on its own.

Ultimately, we need a national crusade to focus on and close the broadband gap. We need to recognize that, as was the case with electricity, a country separated by broadband availability will remain a nation more divided overall.

In fact, there’s a lot we can learn from the steps the nation took to bring electricity beyond urban centers and to every corner of the country. Sympathetic to the rural farmer’s plight, Franklin D. Roosevelt pledged in 1935 to do precisely that. He realized the country couldn’t move forward into a new technological era while leaving its rural neighbors behind.

As part of his plan to lift the United States out of the economic pit of the Great Depression, FDR signed an order creating the Rural Electrification Administration as part of the nation’s New Deal. The agency would help farming communities form local electrical cooperatives—a concept familiar to farmers who already bought feed and equipment through co-ops—to pay for the last miles of electrical connections. The REA’s low-interest loans paid for the construction of local electrical systems that the co-op would own and oversee.

It was a program that started in Washington, DC, but its success required people who would take the promise of electricity to every corner of the country. Then as now, it required that people who wanted to change the country travel to Iowa—not to run for president, but to spread the promise of a new technology.

More than eighty years ago, the weary farmers of Jones County, Iowa, felt a similar pain to our new friends at the Knotty Pine diner. But in the summer of 1938, hope was on the horizon in the form of a glittering big top. The residents of rural Iowa had converged on the tiny town of Anamosa in eastern Iowa for the opening night of the circus—a welcome respite from a hard day and almost ten years of economic hardship.

There were no clowns, acrobats, or trained animals at this show, but the Rural Electrification Administration’s traveling electric circus delighted the audience just the same. The tent featured modern-day marvels like lamps, stoves, refrigerators, poultry brooders, and milking machines, all demonstrated by the era’s Vanna White: Louisan Mamer, the first lady of the REA.22

With a flip of a switch or a turn of a knob Louisan illuminated rooms, washed and pressed clothes, played music, swept up dust, and chilled food. At a time when cooking without electricity was a grueling affair, she made working in the kitchen look easy. She blew the crowd away as she whipped up meals of beef stew, roasted turkey, and fruit dumplings on a Westinghouse cooktop. She brought the show to a rousing close when she challenged two men from the audience to a cooking duel.23

When Louisan joined the REA, 90 percent of city dwellers had electricity versus 10 percent of rural Americans^{24—a gap not seen in other Western countries. At the time, electricity powered homes and barns in almost 95 percent of the French countryside.25}

Like the large telecommunications companies today, the private electric utilities in the United States had connected the towns along the major highways but skirted the less populated areas, which were mostly farms. These companies had decided that they couldn’t recoup the cost of extending their lines into far-flung swaths of rural America. And even if these rural communities were connected, the electric companies assumed American farmers, who had been particularly hard hit by the Depression, would never be able to pay for the monthly service.

This lack of electricity not only denied farmers the convenience and comfort of the modern age, it also shut them out of the nation’s economic recovery. Those eager to plug into the nation’s new economy had to pay private electric companies exorbitant fees to stretch lines to their land. In Pennsylvania, John Earl George was told he’d have to pay $471 to the Pennsylvania Electric Company to extend a line 1,100 feet to his home in rural Derry Township. In 1939, $471 was the average annual wage in rural Pennsylvania.26

In the end, REA supported 417 cooperatives across the country, serving 288,000 households,27 and it sent Louisan and the electric circus on a four-year nationwide tour to teach farmers how to get the most from this new technology. The Maquoketa Valley Rural Electric Cooperative in Iowa was the first co-op to host the circus,28 which by year four was drawing rural crowds of more than ten thousand people.29

A quarter of rural households were electrified by the end of the 1930s.30 In Pennsylvania, John Earl George paid a five-dollar membership fee to join the Southwest Central Rural Electric Cooperative Corporation. His first bill was just $3.40.31 When President Roosevelt died in 1945, nine out of ten farms in rural America had electricity.32 Through public-private partnerships, persistence, and a little ingenuity, the United States had managed to shrink the rural electricity gap by 80 percent in ten years—all during an arduous economic recovery and the Second World War.

For Louisan, bringing modern technology to farmers was more than an economic imperative, it was a social cause. Raised in rural Illinois with no running water or electricity, she understood firsthand the backbreaking work of life on a farm. Lack of electricity wasn’t just harming rural families’ livelihoods, it was harming their lives. “I think perhaps in almost every rural home, there was a realization . . . that the drudgery of home-making in rural areas must be lightened,” she said during an interview when she was in her eighties. “This heavy load of doing everything by hand the hard way, and bearing a lot of children, was killing women far earlier than they die today.”33

As much as anything, her story is a testament to the need again to recognize that the spread of new technology is not just an economic imperative. It needs to be treated as a social cause.

As we left Ferry County, Washington, we were abuzz about everything we had seen and learned. Above all else, we talked about one question: Was there something meaningful we could do?

We didn’t want to leave rural residents with a bunch of empty promises, like so many others had before. We knew our Airband initiative could help bring twenty-first-century technology to people like Elbert Koontz and his Ferry County neighbors. We asked Paul Garnett, Microsoft’s Airband lead, to set out and find the right partner.

Paul and his team succeeded, and by the end of the year we announced an agreement with Declaration Networks Group to deliver broadband internet access using TV white spaces and other wireless technologies to forty-seven thousand people in eastern Ferry County and neighboring Stevens County over the next three years. It was just a start—but a real one.

In the summer of 2019—almost a year after our first visit to Ferry County—we headed back to Republic to check on progress with Declaration Networks and other new partnerships. And this time we knew the way.

As we drove out of town that evening, we made a final stop on Main Street at the Republic Brewing Company, which serves as the town hub. The front of the store has a massive garage door. When the sun’s shining, the door is rolled open to let the tables spill out onto the sidewalk.

One of the owners had been tending bar when we had visited the year before. She had been surprised to hear we were from Microsoft. As we talked with her, she had laid down an opportunity and a challenge for us. “There is not a doubt in my mind that internet access around the area in the next five years will be completely different from what we see today,” she mused. “There are so many bright people around here. Once they have better access to the internet, they’ll realize all the different things that they can do with their lives.”

It was a challenge that got us up in the morning in the months that followed. It’s a challenge that needs to get the entire nation up in the morning in the years ahead.