A new study issued by the National Telecommunications and Information Administration said wireless telephone service may be a desirable alternative to wireline service in some rural areas because of cost factors.
The report, which analyzed a range of telecom services, concluded that distance and low population density are the primary factors increasing the costs of providing telecommunication services in rural markets, and that certain systems and technologies developed for urban areas may be less efficient for rural ones.
The study, titled “Survey of Rural Information Infrastructure Technologies,” is part of the Clinton Administration’s National Information Infrastructure initiative. The administration said its goal is to provide all citizens with access to a broad range of information services by 2000.
“The report will be particularly useful to state and local officials involved in planning information infrastructures in rural areas and helping their communities realize the benefits of the Information Age,” said Larry Irving, head of NTIA. “The rural information infrastructure can be a powerful force revitalizing America’s rural communities. Education and health care services can be enriched. New businesses can be developed that are connected to customers and suppliers through the NII.”
Providing access to the public switched telephone network via wireline in certain rural areas can be difficult and expensive due to extremely long distances from the central office, rough terrain and a shortage of material for poles to run cables, the study said. Wireless service is seen as advantageous in those areas because the costs to subscribers are nearly the same regardless of their distance from the local switch.
However, the price a subscriber pays is highly associated with the costs the service provider incurs for deploying the service. These costs depend on the type of system installed, the number of subscribers to be served, the amount of subscriber clustering and the location of the particular service area. For example, the report estimated that the cost to the service provider for deploying personal communications services in rural areas may be generally higher than in urban areas because of a lower number of users per total infrastructure dollar. Because PCS providers will have to develop large infrastructures and pay for spectrum before they can begin service, their initial costs will be high and will raise the cost of service. Competition from cellular providers, however, will provide an incentive to price the service at a lower cost, NTIA said.
The study noted that fixed cellular applications offer advantages in rural areas because they don’t require handoffs, can use directional antennas and require less stringent signal-to-interference ratios than mobile cellular. Cell sizes for fixed cellular systems can be nearly 35 miles in radius.
NTIA said fixed service could be provided under Basic Exchange Telecommunications Radio Service (BETRS). Established by the Federal Communications Commission, BETRS is a radio service operating in specially designated frequency bands between fixed subscribers and a central office that provides public communication services in rural areas. The Federal Code of Regulations allows for the service to be provided as a connection to the PSTN by way of cellular telephone to fixed subscribers in rural areas.
BETRS can remedy the unserved phone demand and eliminate party lines, which are used to provide cheaper wireline service in areas that have remote access to a telephone company. According to the report, several independent studies have concluded that the demand for BETRS to replace wireline service in U.S. rural areas would be about several hundred thousand lines per year with a total potential market of several million.
BETRS also has the potential to replace old and deteriorating copper wire. NTIA cited that approximately five million lines require replacement or repair in the United States every year. Twenty percent of those lines are located in rural areas and several hundred thousand lines would be suitable for wireless replacement.
Fixed wireless cellular systems have already taken hold in other countries as a way to improve telecommunications. Motorola Inc., for example, has installed its wireless local loop fixed telephone system in Hungary and has systems in China, Colombia, Ghana, India, Spain and Sri Lanka.
