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MTA Commentary-Headlines Can Be Misleading

Below is MTA’s Monthly Commentary, titled “Headlines Can Be Misleading.” This month’s commentary responds to a study released this week http://matr.net/article-31658.html which investigates the availability of “Internet services” in rural Montana. It turns out the study really is about the availability of e-government applications.

Montana’s rural telcos provide among the best broadband service availability in the nation, at competitive prices. The availability of e-government services, however, is a separate matter, which the study addresses.

Please feel free to call/reply if you have any questions or comments regarding MTA’s commentary or any other telecom issue of interest to you.

Happy Thanksgiving!

Geoff Feiss

Montana Telecommunications Association

406.442.4316 (office)

406.594.0424 (mobile)

Serving Montana’s telecommunications industry for over 50 years

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MTA Commentary—Headlines Can Be Misleading

November 26, 2008

A study released this week by Common Cause of Montana and a Montana
State University professor discusses findings regarding the availability of Internet
services in rural Montana. If you read the headlines, you’d think rural Montanans
have little or no Internet access. However, if you get past the misleading
banners, you’ll discover that the study actually is looking into the availability of
on-line government services in rural Montana.

That’s two different animals altogether. As for the headlines, they ran
something like this: rural Montanans can’t get high-speed Internet service; and
when they can, it costs 20% to 40% more than the national average.
These are misleading statements at best. With regard to Internet access,
Montana’s rural telecom providers are among the nation’s leaders in deployment
and use of high-speed Internet capabilities in their service areas, often exceeding
national benchmarks by substantial margins.

Regarding prices, the study looked at a couple of national web sites to see
what average Internet access prices are. One site used finds that “it’s possible to
get dial-up modem Internet access for as low as $6 a month, up to $22 a month.”
Well, yeah. You can get dial-up service, if you want, in Montana for the same
prices. In Wisdom, Montana, for example, dial up service costs under $20. So
back to the national web sites. You can get DSL high-speed service at 1.5 Mbps
for as little as $30 a month, or $35 for 3 Mbps, or $45 for cable broadband
service. And the comments posted on the web site are even more revealing: a
Comcast customer posted $46 a month for Internet access; a T-Mobile customer
posted $40 a month, with a note that service at Starbucks hot spots is
“expensive.” I couldn’t agree more. (I hate it when hotspots charge for Internet
access!)

Another national web site prices DSL in the nation’s “top cities” at
between $25 and $38. Again, we often can meet or beat these prices right here
in rural Montana. You can DSL for under $20 in Libby, for example. In Forsyth,
1.5 Megs cost $35 and 3 Megs run around $50, right in line with the national
benchmarks. In Fairfield, $50 gets you up to 6 Megs, with free spyware and
spam and virus protection.

And speaking great marketing schemes, one national web site used by the
study prices Internet voice services, aka VOIP, at a low of $20 a month, and a
medium range of $25-$40 a month. But wait; that doesn’t include the cost of the
Internet service, which you need to have before you can buy your VOIP service.

Getting VOIP for “only” $25 a month is like saying you get free nationwide calling
with your wireless provider. It only costs you $80 a month, but hey, it’s free!
This is not to say that some things don’t cost more in rural parts of the
country. Indeed, certain services, including Internet access, may cost more,
depending on a host of variables, including whether services are priced on a
stand-alone basis or bundled with other services, among other factors. However,
you’re always going to get a bunch of variables when comparing service
packages, or whenever you compare urban and rural markets.
And that raises another issue. That is, the study looks at disparities
between services available in our nation’s cities vs. those available in rural
communities—in one of the nation’s most rural states. That’s like saying I can
see a Broadway play in New York City, so why can’t I see one in Ennis? Actually
you can see something nearly as entertaining just down the road from Ennis, in
Virginia City, but you get the picture. Comparing what happens in our country’s
largest cities often doesn’t translate easily into what happens in Montana.

But the report really isn’t about the availability of “Internet service” in rural
Montana. It’s really about the availability of Internet applications, particularly online
local government services. The study points out that “with energy and travel
costs rising, expanded e-government services could be a valuable investment.”

How true! The irony is that rural governments are often cash-strapped and can’t
afford the up-front investment in Internet-based services. However, the
investment not only pays off in more efficient, more effective, and less expensive
government, but in consumer and taxpayer savings, too. Consumers can save
time and money by performing transactions on line, with immediate results.
Finally, the study makes a few constructive recommendations.

For
example, the study advises the FCC to gather broadband usage data by censustract
instead of zip code. The FCC already has adopted this change, which is
scheduled for implementation next year. Another recommendation proposes
developing e-government standards that would help local governments move
more of their services on-line. That’s a great suggestion. Further, the study
recommends using federal support to help promote further deployment of
broadband facilities. That’s a good idea, too; and the FCC and Congress are
devoting considerable attention to that suggestion right now, with plenty of input
from industry and consumers, and, it turns out, various studies from Montana!

Wishing everyone a very Happy Thanksgiving, this is Geoff Feiss,

General Manager of the Montana Telecommunications Association.

# # #

Contact: Geoff Feiss, General Manger

Montana Telecommunications Association

406.442.4316

[email protected]

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