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MSNBC: FCC Chairman Sees Rural Realities in Southwest Alaska - 8/30/2011

An internet super highway is under construction in Southwest Alaska this year, but will the average household be able to afford access?

The chairman of the Federal Communications Commission toured Alaska last week to explore this issue. The last time an FCC Chairman was in Alaska was 2003. And a lot has changed since then.

Sometime this year, 65 communities in Southwest Alaska will get high speed internet access through “Project Terra,” an 88 million dollar effort funded by a combination of grants and loans to GCI, an Alaska telecommunications company. The money comes from the federal stimulus program.

One of the reasons FCC Chairman Julius Genachowski came to Alaska was to check on the progress of “Project Terra.” He says it fulfills the Obama administration’s goals of job creation in more ways than one. First, more than 200 people were hired to build Project Terra’s network of fiber optic cables and microwave relays. And then, says Genachowski, there are also future jobs that broadband access will generate in Rural Alaska.

He told a group that had gathered at a celebration in Dillingham on Thursday that government can’t do this job alone – and GCI’s “Project Terra” is a good model for building telecommunications infrastructure in Rural Alaska.

“Public-private partnerships are necessary to achieve that goal. It won’t happen by itself,” said Genachowski.

From Dillingham, the FCC Chairman flew to New Stuyahok with Sen. Mark Begich, D-Alaska.

“I think it was an eye-opener,” said Begich. “I don’t think he’s ever seen a village. When he thinks of rural, he thinks “traditional” rural. You get to drive from one city to the next.”

In New Stuyahok, Begich and Genachowski drove around in a pick-up truck in the rain, riding down rough, muddy roads.

They toured the clinic, where staffers demonstrated the use of telemedicine, necessary in a community without any doctors -- but slow and awkward, because it’s delivered by satellite.

“This is not like any other community (in the Lower 48). You can’t get to it. You can’t drive to it. You need to create this access,” said Begich, who later told a state task force on broadband access that there needs to be a new definition of rural for communities that are off the road system. Begich says he calls it “extreme rural.”

Once New Stuyahok is hooked up to the GCI’s “Project Terra,” the community will have the capability to cruise the internet in the fast lane. The school will also see immediate benefits, because it will receive, along with hospitals and clinics, a subsidized rate for service.

“I’m not sure that a lot of people, unless you come visit here, that you actually understand what the word ‘remote’ means,” said Steven Noonkesser, technology director for the Southwest Region School District.

Very few of the children that the FCC Chairman met at the New Stuyahok school live in homes with internet access.

At a meeting on Friday of the State Broadband Task Force, educators told Genachowski that the lack of internet access in homes and businesses is a serious problem in Alaska, especially for job training and higher education.

Karl Kowalski, who is the chief information officer for the University of Alaska, told the group that broadband access is key to running successful distance education programs – and with mail service in jeopardy in some remote areas, it has become even more important.

Kowalski says, when the U.S. Postal Service announced last month that it was studying the closure of 36 post offices in Alaska, the University scrambled to come up with a plan.

“There were 270 students that were in those communities, that we thought at the time were going lose mail service, and thus their access to course materials and their ability to send assignments back to the University,” said Kowalski. The Post Office has since taken 25 communities off the list for closure.

Kowalski says students recognize the importance of internet access as vital to competing in a global economy.

“I know homes that have no running water or sewer, but they see the importance of internet, and they’re paying that fee for the small amount of bandwidth that they get,” said Kowalski.

During his visit to New Stuyahok, Genachowski was taken to the store to check out the price of milk, to understand the trade-offs Rural Alaskans face. Milk, a few days away from expiration, was $12.25 a gallon.

“I have a feeling they’ll pick the heating fuel over broadband as a basic matter of survival,” says Bill Popp, head of Alaska’s broadband task force.

Popp was glad to hear that the FCC chairman supports expanding the Universal Service Fund to include broadband subsidies for consumers. Phone companies are required to contribute to the fund -- and in many cases they make their payments by adding a surcharge to their customers’ bills. Some of the fund is used to subsidize rural telephone service.

“Broadband is going to be a key element of our future growth for resource extractive industries,” says Popp. “That’s everything from mining, to oil and gas, to even fishing.”

Popp says Alaska will be able to develop its resources faster if internet access is available in remote communities.

“These resource extraction industries are highly technical in nature. When you look at oil and gas and mining, it requires an immense amount of data moving back and forth between the mine site -- or the drilling pad and the headquarters of the facility,” said Popp.

Popp says communities without broadband are at a tremendous disadvantage.

“Alaska is truly unique in these issues. We have situations that you don’t find anywhere else in the United States. And to have the Chairman of the FCC see it first hand is an important step. There are a lot of options on the table that we need to do more work on,” said Popp.

The FCC Chairman told the broadband task force that modernizing the Universal Service Fund will require cost cutting and shifting dollars to areas where they are most needed. Sen. Begich worries about the potential impact on rural telephone service in Alaska, which is provided by a number of small companies or cooperatives.

“We have a lot of companies, Cordova is an example, which have utilized that service fund to build out their telephone network, which has a whole bunch of loans attached to it and they expect that cash flow to pay off those loans,” said Begich. “It has to be a very careful balance.”

But for those in New Stuyahok, where the FCC Chairman spent a few hours, life is already precarious.

And Bill Popp says the broadband task force has to keep this in mind.

“Do we want our communities to dry up and blow away, because they are just no longer competitive and can no longer survive?”