Going home
Are rural residents second-class citizens in the digital divide?
December 5 2008 - 12:47 pm ET | Tracy Ford | RCR Wireless News
I just got back from a long weekend in a place that is defying the economic downturn, where there is a housing shortage because of all of the people flocking to the area, where the local restaurant has to close early because there aren’t enough workers — and where you can’t walk in a store to buy an iPhone or a Storm.
I just went back to Williston, N.D., my childhood home, to see relatives over Thanksgiving. Williston is a microcosm of some of the things that are wrong with the wireless industry today. There are two carriers in town: Verizon Wireless and Alltel, both CDMA carriers. Verizon Wireless, as you know, is buying Alltel. Williston is one of the markets Verizon Wireless must sell to complete the deal. But who will want to buy Alltel’s CDMA network there? AT&T Mobility, Sprint Nextel and T-Mobile USA don’t have a presence in town. So how do you bring competition to a place with a total population of 16,000? Assuming 100% cellphone penetration and that half the people would churn to a new carrier, is there a GSM-based carrier that needs another 8,000 customers enough to build a network? Not that I can think of. Perhaps the markets for sale in the northern states cluster enough to make a good business, but eastern Montana, the western Dakotas and Wyoming are sparsely populated no matter how you spin it. Regional CDMA operator U.S. Cellular may be interested in expanding its presence further west, and perhaps one of the CDMA flat-rate providers may sense a good deal in Williston, but who’s to say?
The irony is that Williston is in the midst of an oil boom. The people in town are the perfect candidates for the newest technology: They have the money to buy high-end devices, and they’d likely use a lot of minutes and bytes. Oilfield personnel by definition spend a lot of time in the field, where the rigs are, so they are an extremely mobile demographic. The other industry in Williston is farming, again a mobile demographic. BlackBerrys are as prevalent as the Cadillac Escalades and Ford F-350s that drive down Main Street — but not the Storm.
Due to high demand, Verizon Wireless is only selling the store through company-owned stores right now and the closest one is more than 200 miles away. No wonder rural residents often feel like second-class citizens in the digital divide.
December 19, 2008 06:23 am
I agree with the previous commenters. I'll add the fact that Williston, ND and other rural areas aren't necessarily a sample of what is "wrong" with the wireless industry, but rather a unfortunate truth in business. Companies of all stripes build where the people are (and presumably profits). Landline carriers, cable companies and thousands of other outfits come to Smallville AFTER they're established in Metropolis - if for no other reason that Metropolis has to subsidize the expense of serving Smallville.
December 9, 2008 06:09 am
Owning or leasing a couple base stations does not require billions. In this country, there were hundreds of mom and pop mobile telephone, paging, backhaul, wi-fi, and trunked radio operators, before consolidation. And many still are alive. Stop limited thinking; it doesn't solve problems.
December 5, 2008 11:09 pm
Customers can order the Verizon Phone online and have it sent Fed ex at ZERO cost to the consumer if they want a handset not available at the local wireless store. The cost to buy and maintain a wireless network is far beyond a town of 16k people...Its not the large carries trying to take over as much as the small ones not being able to keep up with the high costs of supporting and growing their networks. The 3 big ones spend BILLIONS, yes with a B on each of their own networks each year just to stay up with the times. Its a challenging time for all "small business" in America especially with the economic events happening all around us.
December 5, 2008 12:52 pm
The FCC has been influenced by Wall St. for past several years. And Wall St. gets it way over Main st. most of the time. When Main St. can show more money than Wall St., then Main St. may have a chance of getting heard.
December 5, 2008 12:52 pm
How about offering a solution?
December 5, 2008 12:52 pm
When will the FCC learn that they cannot continue to allow acquisitions that harm rural consumers and start addressing issues in favor of the rural carriers who truly serve our communities?
December 5, 2008 12:52 pm
Here's an idea. The town, or local business people, buys Alltel's netowrk in the area and sets up roaming agreements with Sprint. There is nothing wrong with the wireless industry. Just a shortage of ideas. There are probably another dozen ways to solve the town's problem...get a Clear franchise, or set up a JV with ATT. More ideas please...?