Microsoft wants to close rural broadband gap by tapping unused TV spectrum

SAN FRANCISCO — Microsoft is tackling the decade-old quandary of limited broadband access in rural America with an ambitious plan to close the gap.

But its strategy, to partner with local telecom providers and leverage TV White Space — the parts of the television spectrum between the channels — was met with criticism from the nation's broadcasters. 

Microsoft President Brad Smith, in a speech in Washington, D.C., laid out the company's Rural AirBand Initiative to bring high-speed Internet connectivity to two million people in rural America by 2022. Microsoft initially plans projects in a dozen states — including Georgia, North Dakota, Texas and Wisconsin — in the next 12 months.

"It's our biggest push for broadband coverage," Smith told USA TODAY in a phone interview last week. "We’re putting in a big stake and hope to close the gap entirely in five years."

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To do this, it plans to use the 600 MHz frequency range, essentially the unused spectrum between TV broadcasts, prized because of its strength and affordability but limited by a dearth of devices that have worked with the technology. It's sometimes known as Super Wi-Fi because the signals can travel over hills and through walls, durability that allowed rural communities to access TV news.  

It's also cheaper, Microsoft says. According a Boston Consulting Group study it commissioned, a mix of technologies including TV White Spaces could drop the cost of closing the rural broadband gap to $8 billion to $12 billion.

But the plan is problematic, said a trade group for the nation's broadcasters, which worries TV channels that don't have a buffer zone could interfere with each other.

"It's the height of arrogance for Microsoft — a $540 billion company — to demand free, unlicensed spectrum after refusing to bid on broadcast TV airwaves in the recent FCC incentive auction," said National Association of Broadcasters spokesman Dennis Wharton said in a statement. 

An estimated 23.4 million people in rural America are without broadband, and another 11 million in urban areas. Despite intermittent efforts by the federal government and private enterprise to ease the problem over the years, a lack of available technology and prohibitive costs have hampered efforts, Smith says.

"It's a last-mile problem," says Nick Reese, co-founder of BroadbandNow, a search engine for broadband that provides data on the most underserved states for broadband Internet connection. More than a third of Mississippi’s population (1.12 million), for example, lacks such service. Alabama, Alaska and Arkansas are also among the least-served.

The Federal Communications Commission recently claimed Net neutrality regulations were impeding investment,  "widening the digital divide in our country." Analysts say the reasons for the drop in broadband outlays was more complicated, tied up with the big telecom companies' mergers and strategic shifts. 

Whatever the reason, the gap is clear. Slightly more than half of U.S. rural residents have access to downloads faster than 25 megabits per second, compared to 94% in urban areas, according to a 2016 Congressional Research Service report.

Broadband penetration in U.S. homes with annual incomes of less than $50,000 is just 59.3% versus 88.8% in households with higher incomes, according to the U.S. Census Bureau.
Previous attempts to expand broadband to underserved areas, such as $7.2 billion spent on rural broadband under President Obama’s 2009 stimulus bill, have been deemed woefully insufficient.

Housing and Urban Development Secretary Julian Castro visited San Francisco in late 2015 to build support for ConnectHome, an initiative that aims to bring accessible broadband Internet access to 750,000 residents of low-income housing communities in 28 pilot cities such as Los Angeles, Memphis, Newark, Cleveland and New Orleans.

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A change in administrations, though, largely blunted its momentum.

President Trump in Iowa last month said expanded broadband access in rural areas will be part of his national $1 trillion infrastructure plan "to promote and foster, enhance broadband access for rural America."

But experts say the project's cost would be steep — an estimated $80 billion — based on an FCC study in January, calculating the price tag for providing coverage to 98% of rural America.

Microsoft thinks it can succeed where other efforts have fallen short, funding the buildout with a mix of private and public investments, for instance investing along-side a regional telecom provider. It also called on the U.S. government and states to match private investments in broadband infrastructure. And it wants the FCC to make sure the three channels below 700 MHz are available for unlicensed use.

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In addition, Microsoft announced a philanthropic project with non-profit 4-H to help train people in rural areas so they can use broadband to improve education, health care, agriculture and opportunities for small business. It also unveiled a technology licensing program to stimulate investment in the private sector by providing royalty-free and open source licenses to more than 30 patented inventions.

The plan isn't entirely philanthropic, Smith acknowledges. "The more people connected to the Internet, the more commercial benefit to Microsoft and others," he says.

Follow USA TODAY's San Francisco Bureau Chief Jon Swartz @jswartz on Twitter.