Wednesday, July 25, 2012

Satellite Still Makes Sense in Rural Areas, Frontier Bets

The Frontier Communications Corporation wholesale agreement with Hughes Network Systems to create a branded, satellite-based broadband access service shows that debates over "which access network is best" miss the point. A range of networks "make sense" for different population 

Frontier will sell satellite-based broadband services, branded "Frontier Broadband, to what Frontier estimates are several hundred thousand households and small businesses within markets previously unserved or underserved by all broadband providers, including cable.

Notice that Frontier did not brand the service "Frontier Satellite Broadband." It is broadband, provided to some potential customers that Frontier cannot reach using its fixed network. 

As the mobile network provides huge value, even though raw speed is not as high as is possible on a fixed network, so a variety of technologies and networks make economic sense for urban, suburban, rural and isolated potential customers. No single network is "best" for every scenario. 

Still, each type of technology tends to be regulated using different rules. 

And it still raises regulatory hackles when contestants using different networks, and regulated under different rules, decide it makes sense to "cross the lines." That seems to be the case with the agency deals allowing Verizon to sell cable operator services, while cable operators can sell Verizon services.

Historically, the industry has seen strife over issues of which types of networks can receive funds from agencies that support rural communications, as well. Incumbent telcos have argued that it is unfair for competitive local exchange carriers or mobile carriers to receive support funds traditionally awarded only to fixed network telcos, even when the functional capability supplied by all of the contestants is precisely what the programs are supposed to support. 

Those debates are likely to become sharper in the future. 

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