Why is Rural America's Internet So Bad?

Meet Bloomberg's own, David Nicholson.

Now his happy place is out in the field on the open road.

But like the rest of the world lately,

he's been working from home a lot more than he's used to.

COVID-19 has prompted a massive urban exodus,

as professionals of every ilk,

yearn for more space to live and work.

As a result, rural areas have exploded,

and they're poised to experience a resurgence

as more and more families pack up

and leave the big city to try out life in the burbs.

But there's one problem with that.

Not all internet speeds are created equal.

Anyone who might need to upload

or download large files for a living,

may not wanna pack up and move

to that cabin in the woods just yet.

Now David's house isn't a cabin, but it is in the woods,

and inexplicably, his internet is workable.

My internet is okay.

I pay a lot for it.

It's around $140 a month.

The download speed's great,

and the upload speed is terrible,

which is really bad for my work

'cause I have to upload these massive files.

But I'm definitely one of the more lucky ones

in this community.

Just a few miles down the road,

my buddy has awful internet.

It's usually under two down and under 0.2 up,

so it's often unusable.

Some days it's around one

and other times it'll drop down to about .2, .3.

I just wanna be able to have internet at my house

without having to go outside

the normal ways of acquiring internet,

it's really frustrating.

We're literally miles, a few miles away,

from downtown, and it just cuts off.

This is a problem and the solutions are not there yet

because getting high-speed internet in rural areas en masse

is something our providers may simply not be ready for.

If your internet service doesn't have

fast download and upload speeds,

then you don't have high-speed Harmony.

You have .

Americans on average pay about $70 a month

for internet at home,

but in rural areas it could cost a lot more

for a lot less service.

So the pricing for a fixed wireless provider here

can be something between 80 and $150

for about 25 megabits per second.

However, gigabit service,

which is a thousand megabits per second, and symmetrical,

is running at about 119 a month or 130 a month.

That's John Paul,

he co-owns Spiral Fiber,

an internet service provider here

in Nevada County, California.

And for the past 10 years, he's been trying to

bring an affordable fiber optic network to town.

It all started when he applied to be part

of the pilot program for Google's fiber service.

Across the country civic boosters have been

going to extremes chanting ,

singing ♪ Google in the morning

and marching trying to get the search engine giant

to look at their town.

The internet these days is crucial, to be in the world,

to be a part of the world

and to be connected to your community.

Google ultimately went with Kansas city, Missouri

which left Paul on a mission to get funding

to lay out fiber optic networks for gigabit service.

Over the next several years he would attend conferences

and pitch venture capitalists

and apply for grants to make his vision come to life.

One of the biggest roadblocks

to building infrastructure for the internet here

in the United States are the existing large providers.

They have their land staked out.

They would prefer that nobody come in

and compete against them.

In 2013, we applied for a grant.

We went down and met with the commissioners

at the California public utilities commission.

It was an arduous process to get funded

but we finally did against all odds.

We got a $16 million grant

and then we went out to seek venture capital.

Then in March of 2020, the pandemic hit the world.

Everybody got locked down and everybody came home

and everybody started using the internet.

And I remember seeing on one

of the local fixed wireless providers, websites

they've said, "Hey, we know you're all staying home

"but please don't use too much video

"and please don't use too much bandwidth."

And I thought "That doesn't work."

The U S connectivity gap is far greater compared

to countries that are considered its peers economically.

Some developing nations actually have better internet

than rural America.

Like in Kenya which has a state-of-the-art fiber optic

network fed in from their coastline.

The American connectivity gap does largely

affect rural areas that are either outside

of service coverage or simply prohibitively expensive.

This is Rebecca.

She and her family moved to Nevada County

just a couple miles down the road from David.

They took for granted that high speed internet

would just exist in the area.

And it's not something they even bothered to check

on before buying their house.

Turns out, all they got was dial up.

We wanted to move where we have a little more space,

room for the kids to run around, you know, just be out

in the mountains a little bit more.

Having come from a bigger city area where wifi is pretty

readily available, we hadn't really considered

that in our purchasing of the house,

whether that would be an option or not.

But when school started and now that we are remote learning

with our children and we're doing everything from home,

we didn't have the option to do that at our house.

So every day when school would start, we'd have to

pack the kids up and we'd go to my in-laws home.

They have a little cabin up in this area

that does have wifi already.

Rebecca's situation is the norm in rural America.

According to data from the federal communications

commission, just 4% of urban Americans lack access

to broadband internet.

That's compared to almost 40% of people who live

in rural areas.

But while that the case, there were also racial

and socioeconomic divides in terms of who had that access.

In addition to that geographic difference

low-income African-American students, Latino students

and first-generation college students were more likely

than others to have only one device at home that shared

among multiple siblings

and or lack access to that actual connection.

For most American towns there's also a lack

of competition, forcing internet prices up

and large providers like AT&T

and Comcast aren't incentivized to expand service

to these rural communities.

This is how Xfinity makes life simple, easy, awesome.

So in our area, we have a small imprint of Comcast.

But they're not gonna go out to the more rural areas.

It's just not cost-effective

for them to do it as a large company.

In order to lay fiber cable, you're actually physically

digging trenches into the ground.

And for internet service providers, they're primarily

focused on maximizing their profits.

And so the fewer customers you have, you know

in any square mile and the more fiber you have to lay

that's just kind of harder to pencil

out from a purely economic standpoint.

AT&T released a statement on the matter

expressing the need and desire for government assistance

to fund fiber optics expansion to areas deemed unprofitable.

Comcast released a similar statement

encouraging more public private collaboration

on this effort.

Federal agencies do offer grants to help communities

build broadband networks, but many have argued that there's

not enough flexibility on how to use these funds.

The COVID-19 relief package passed by Congress in March

and signed by president Donald Trump awarded $43.3 million

to 51 projects on the East coast alone.

But it also stipulated that these projects needed to be up

and running by December 30th.

For contractors who plan projects, months

and years in advance it's a scramble

to rearrange their schedules to meet that deadline.

So what we've been asking the federal government

to consider is at least as long

as the projects are getting started,

knowing the projects are being put into place

to expand both remote learning, working from home

and opportunities like that

that are truly driven from COVID.

We're moving as fast as we can regardless,

but hopefully they'll give us some more time.

Talking to John Paul it's clear that he believes

broadband is something that can transform a community

and should be considered a public good.

One of the first communities to come on

in the United States with full-on gigabit

service was Chattanooga, Tennessee.

Now they're a bigger city

but they're a city that was economically in a downturn.

In the last 15 years the city of Chattanooga has turned

around in an amazing way.

It's a nexus for young people to move to.

It's a place where technology happens.

It's not just about logging on to Zoom, you know,

to connect with your colleagues who might

be in New York City.

It's also your ability as a small business operating

in the town of Nevada City or wherever it may be

to quickly upload your payroll documents

or something onto the cloud, or to quickly, you know,

swipe a customer's credit card.

There's just some really basic business functions

and mechanics that I think people

in big cities really take for granted.

And that are just gonna be a much bigger challenge

for small business owners in rural areas.