Resource for Communities
Jason Hendricks, GVNW Consulting, Inc.
Anne Heinze Silvis, University of Illinois
Funding provided by:
The Illinois Department of
Commerce and Community Affairs
University of Illinois Laboratory for Community and Economic Development
These materials provide information for communities to use as
a starting point for evaluating and addressing their Internet
and telecommunications infrastructure needs. The goal is to describe
technical issues and deployment options in terms that are easily
III. The Basics of Technology
1. Basic Technology Terms
2. Bits and Bytes
3. Dial-up Internet
5. Broadband Service Options
IV. Determining the Availability of Internet
V. What Can a Community Do to Get Better Internet
1. Analyzing Financial Feasibility - An Internet Provider's Perspective
2. Communities Can Assist in Evaluation by Quantifying Demand
3. What If No Provider is Interested?
The authors wish to thank everyone who reviewed drafts of this
document. Their suggestions have improved the content and organization
of this work.
Reed Berger, Aviation and Economic Development, Rantoul, Illinois
Bob Dickey, Eastern Illini Electric Cooperative, Paxton, Illinois
Doug Dougherty, Illinois Telecommunications Association, Springfield,
Cynthia Erickson, University of Illinois Laboratory for Community
and Economic Development
John Goldrick, Community and Economic Development Foundation,
Inc., Ford County, Illinois
Sue Gortner, Monticello Chamber of Commerce, Monticello, Illinois
Doug Harlan, University of Illinois Extension Moultrie-Douglas
Drew Hoel, City of Tuscola, Tuscola, Illinois
Kim Rahn, University of Illinois Extension Iroquois Unit
This document provides information that communities can use as
a starting point for evaluating and addressing their Internet
and telecommunications infrastructure needs. Included in these
materials is a primer on basic technology terms and broadband
service options. Also included are suggestions on how to determine
what services are available in a community. If the desired service
is not available, a community may request service from potential
providers. This document addresses some of the key variables involved
in a provider's decision to deploy services so that a community
can most effectively promote its interests to potential service
providers. Included is a discussion of a community's role in quantifying
demand for service through interviews with community leaders and
surveys of residences and businesses. Finally, this document suggests
several options available to a community if no company is willing
to provide the desired services.
The "Internet" is the label we apply to the network
of computers, all around the world, which are linked together
to share information. As soon as you link to the network, you
are part of the Internet. There are many options available which
will allow your computer to link to the Internet, and this guide
will help you sort through those options.
The term "Internet provider" refers to any enterprise
that offers Internet and/or broadband services, including traditional
ISPs (Internet Service Providers), telephone companies, cable
companies, satellite companies, and wireless companies. The term
"Internet" refers to any type of service a community
desires, whether it is basic Internet service, quality Internet
service without interference and/or per-minute charges, or broadband
service. Regardless of the type of company or service, these evaluation
and fact-finding suggestions will be useful.
III. The Basics of Technology
1. Basic Technology Terms ~ When evaluating Internet options
in your community, it is important to understand some basic terms,
such as "central office," "switch," and "loop."
A central office is a building in which telecommunications carriers
house switches used to transfer calls from the calling party to
the called party. A switch is essentially a computer that routes
telephone calls. Loops are the copper (or in some cases, fiber)
wires that run from a switch in a central office to a home or
business. When you pick up a telephone, dial-tone is provided
from the switch, over the loop, through the building's inside
wiring, and into the phone.
2. Bits and Bytes ~ These units of measure indicate how
fast data is moved from place to place over the Internet. Bits-Per-Second
(bps) is the standard unit of measure. A 56K modem carries approximately
56,000 bytes per second. A set of bits that represent a single
character is called a "byte." Usually there are 8 bits
in a byte. A kilobyte is 1000 bytes, a megabyte is 1,000,000 bytes,
and a gigabyte is 1000 megabytes.
3. Dial-up Internet ~ The first goal of any community's
communications plan is usually to obtain affordable and reliable
Internet service. For some communities, calls to the Internet
are billed on a per-minute basis because there are no ISPs within
the untimed local calling area of the subscribers. In addition,
there are problems with the quality of the Internet connection
in some rural communities because phone companies have not sufficiently
maintained their rural telephone plant. For example, very old
loops were provisioned in such a way that exposure to air and
water causes interference with voice service and basic Internet
service. Thus, access to quality dial-up Internet service is often
a community's primary objective. In the long run, rural communities
are also interested in ensuring that they are not left behind
in the deployment of broadband Internet service. Information presented
in subsequent sections regarding community roles in obtaining
broadband access can also be applied to dial-up Internet service.
4. Broadband ~ The term "broadband" describes
the provision of high-speed data services with large amounts of
"bandwidth" (the capacity of the communications channel).
Typically, dial-up Internet users who have purchased computers
within the last few years have computer modems that, theoretically,
allow data to be downloaded from the Internet at rates up to 56
kilobytes per second (kbps), although the common connect rates
with these types of modems are about 33 kbps, with typical transmission
rates much lower if there are Internet congestion problems. Broadband
technologies use different techniques that result in greater bandwidths
and allow users to download data at rates much faster than can
be obtained with a 56k modem. The term "broadband" is
commonly used in the industry to refer to transmission speeds
of at least 200 kbps in at least one direction. For comparison
purposes, note that a megabyte is equivalent to 1,000 kilobytes.
A one-megabyte file can be downloaded nearly 18 times faster via
a 1 mbps advanced service offering than via a 56 kbps dial-up
5. Broadband Service Options ~ There are number of ways
to provide broadband service. This section will describe the advantages
and disadvantages associated with some of the common broadband
technology options, including Digital Subscriber Lines (DSL),
cable modems, satellite, and wireless.
Digital Subscriber Line (DSL) ~ DSL provides high-speed
data service over existing copper phone lines. Historically, a
phone company's network was designed to provide very reliable
phone service with minimal bandwidth. As customer demands changed
to include data services such as the Internet, these networks
were modified to accommodate the new services. DSL was developed
to allow new services to be provided over older networks.
DSL technology splits voice and data services, with data occupying
the high frequency range and voice occupying the low frequency
range. There are many types of DSL, with different speeds varying
by technology type and direction (i.e., "download" to
customer and "upload" to the Internet). Typical offerings
are asymmetric, with higher download speeds of up to 8 mbps and
upload speeds of up to 1 mbps. However, these speeds are on the
high end of affordability for a typical residential customer.
The $40-$50 offering of most providers is typically limited to
750 kbps to 1 mbps downstream and 128 kbps upstream. Higher speeds
are often purchased by businesses for a higher monthly fee.
The primary advantages of DSL are:
- DSL is always on -- there is no need to dial in and tie up
a phone line.
- Since voice and data frequencies are split on the same line,
users can cancel second lines used only for Internet service.
The savings from canceling the second line often makes up for
much of the price increase associated with purchasing DSL.
- DSL is much faster than 56kbps modems.
The primary disadvantage of DSL is that it doesn't work
for customers too far from a central office. The limitation on
loop length for DSL is about 15,000 to 18,000 feet. Therefore,
DSL is often not available to customers located three or more
miles from a central office.
Cable Modem ~ Cable Modem Internet service is provided
over the same coaxial cable used to deliver television service.
Typical download speeds for cable modem service range from 3-10
mbps and upload speeds range from 128 kbps to 10 mbps. Unlike
DSL, cable modem service cannot offer different speeds to different
customers. So, the typical $40 per month cable modem service allows
for the full bandwidth potential, with local transmission speeds
fluctuating depending on the number of users "sharing"
the cable network. As use of the cable modem increases, transmission
The primary advantage of a cable modem is speed . . . "affordable"
cable modem services are typically faster than comparably priced
DSL services and much faster than dial-up services.
Disadvantages of cable modems also involve speed. . as
the number of users in a given area increases, transmission slows
because of the system's shared network. Also, there are security
issues associated with the shared network architecture. Finally,
cable modem services are only available where cable TV service
is available, which often doesn't include many rural areas.
Satellite ~ Satellites beam data via a transmission
from space to dishes and receivers similar to those used for satellite
TV. Typical download speeds for satellite Internet services are
up to 400 kbps. Uploading must occur through a regular phone line.
The primary advantage of satellite broadband service is
that it will work well in rural areas where DSL and cable services
are not available. In fact, satellite broadband services are available
from a few providers nationwide. Satellite services are also faster
than dial-up services, but not as fast as DSL and cable modem.
Disadvantages of satellite service are:
· Broadband capability is available only on the download
· The services are costly, relative to speed, when compared
to other services; and
· Satellite service hardware and wiring are difficult and
costly to install.
Wireless ~ There are many wireless broadband options.
Not one can be identified as suitable for every situation. A point-to-multipoint
fixed wireless solution would likely be the transmission medium
of choice for rural communities interested in delivering broadband
to a diverse and geographically dispersed group of users. Under
a point-to-multipoint scenario, a base station transmits signals,
which are received by multiple wireless modems connected to computers.
The speed can vary, depending on technology and geography, but
a wireless company using unlicensed spectrum in the Plains states
could transmit data at up to 11 mbps for a range of about nine
miles (in the Rocky Mountains, where mountains present line-of-sight
barriers, the transmission range would be reduced to about four
miles). Unlicensed spectrum operators provide service at frequency
bands below six gigahertz. These providers exist in a "squatter's
rights" environment, in which the first provider in the area
gets the benefit of providing service. If another provider subsequently
tried to provide wireless service in the area, the signals of
the providers would cross and no signals would be transmitted
successfully. Neither company would benefit, because users could
not receive either company's services. Unlicensed spectrum is,
therefore, like the "wild west" of wireless. Licensed
spectrum, on the other hand, is a government-granted right to
provide service at higher frequency bands, in a specified geographic
location, based on a winning auction bid. Recent spectrum license
auctions may allow for very high-speed broadband deployment in
rural America. Unfortunately, it will be a few years before broadband
services offered through this medium are available to users, because
technologies to operate in these frequency ranges are not fully
developed. Therefore, the unlicensed wireless providers have been
the most common type of wireless broadband providers in rural
communities and will likely continue to be for the foreseeable
The advantages of wireless broadband services include
the potential to provide higher transmission speeds than DSL,
cable modems, and satellite services. Wireless providers do not
need access to landline copper and coaxial cable systems. In addition,
the newer technologies being developed may allow users to receive
broadband services on a mobile basis.
Primary disadvantages of wireless broadband services are
line-of sight restrictions, and the interference that can be caused
by precipitation. Whether it is a tree, a building, or rain, objects
in the path of transmission can interfere with wireless signals
and degrade performance. Expected speeds decrease as the number
of users increase. Certain technologies have security concerns
about which the user should be familiar.
Broadband Service Options Summary ~
|TYPE OF SERVICE
||COST PER MONTH FOR SUBSCRIBERS
|Usually $40-$50 for 750 kbps service.
||Over existing phone wires.
||Available only within three miles of central
||Fast, but slows
||Only available where users
||with more users.
||cable exists, or where it can be installed.
||Usually higher than DSL or cable.
||Fast download, slow upload, using wire.
||Works where geography or physical infrastructure are
barriers to other options.
||Similar to DSL.
||Higher speed than any of the other options. Slows
with more users.
||Anywhere, once the transmission point is created.
Blocked by trees, rain, mountains, etc.
||Need a tower or high point for transmission; could
be provided by the municipality on its water tower,
in turn for access. Line-of-sight restrictions for transmission.
IV. Determining the Availability of Internet
Simple as it sounds, the local telephone directory is the first
place to look in determining the availability of local Internet
service. Under the heading, "Internet," the yellow pages
should list all local Internet service providers (ISPs) and others
providing service locally. Often, the yellow page advertisements
will list the services these companies offer, such as DSL and
wireless broadband. Cable companies and satellite companies should
be listed in the yellow pages. In addition, local phone companies
should be listed in the first few pages of the directory. The
Illinois Commerce Commission provides a list of firms (also called
LEC or Local Exchange Carrier) providing telephone service and
the areas they serve. This report, entitled Illinois Local Exchange
Carriers, is available at www.icc.state.il.us,
under the "Consumer Services" link. These local exchange
carriers can provide information about the services they offer,
including Internet service. A number of web sites provide information
on Internet availability. On the following web sites, a user can
enter a phone number and/or other location information to get
a list of Internet providers:
If there aren't any desired Internet providers located in the
community, it may behoove the community to check into the availability
of Internet providers in neighboring communities because these
providers may be willing to expand their geographic service area.
For example, many small rural telephone companies have offered
competing voice and data services in neighboring communities traditionally
served by larger phone companies at the request of the communities.
V. What Can a Community Do to Get Better
If the search for Internet services doesn't turn up providers,
a community can approach an Internet provider with a request to
provide the desired services in the community. Because it is costly
to build a network from scratch, or upgrade an existing network
to deploy new services, an Internet provider will only do so if
it believes it has a reasonable chance to recover its investment
and earn an appropriate return on the investment. The business
case must be sound before a provider will consider a request to
deploy services. By understanding how an Internet provider decides
to deploy services, a community can better position itself by
providing accurate and relevant information, which the firm will
use in considering a request. This section presents a primer on
the issues of importance in an Internet provider's deployment
evaluations and suggests a role for the community in facilitating
and expediting the evaluation.
1. Analyzing Financial Feasibility ~ An Internet Provider's
Internet providers decide whether to provide service in an area
based on whether the venture is expected to be profitable. The
firm compares the expected revenues and expenses of the venture,
then determines if it is beneficial to invest in the network infrastructure
necessary to provide the service. On the revenue side, the primary
component of the analysis is an evaluation of demand for service,
that is, what are consumers willing to pay for specific services,
and how many "takers" will buy? Information relevant
to such a financial feasibility analysis for Internet services
- What community members expect of Internet service, in general
~ Expectations may include, but are not limited to: basic Internet
service, higher quality Internet service, or broadband services
(where "broadband" may imply different bandwidth expectations
to different customer classes and portions of the community).
- Expectations for Internet access of different customer classes
(for example, business and residential).
- Expected demand levels, at various price points, for various
service categories and bandwidth levels.
- Expected demand level by section of community (e.g., town
compared to rural).
- Expected demand levels by distance from central office (for
loop length considerations).
- Locations of customer classes and, in particular, mid- to
large-sized businesses within the town.
- Expectations for when the community wants the service to
- For broadband, expected willingness to pay for content as
well as bandwidth, for all of the above considerations, where
"content" means specific applications that rely on
higher bandwidth (for example: music, sports, and sports programming).
- Location opportunities for equipment, with any business or
- Tower and tall building location options if a wireless solution
Each item on this list provides an important piece of information
relevant to revenue and expense expectations. For example, if
subscribers in the community would be willing to pay $40 per month
for broadband, provided at 750 kbps, and most of the customers
are clustered in town, the financial evaluation would be much
more favorable than if the community wanted 10 mb broadband service
but was only willing to pay $30 per month and customers were geographically
dispersed over very inhospitable terrain. A financially responsible
Internet provider will perform an evaluation of these factors
before it invests hundreds of thousands or millions of dollars
to deploy Internet services. Because network characteristics provide
a much more favorable opportunity to earn a sufficient return
on investment in urban areas, Internet providers have tended to
focus their financial analyses and deployment activities in urban
areas. A survey and financial analysis of every community opportunity
is very expensive. So, rural areas have tended to be the last
in line for Internet and broadband deployment. A community interested
in receiving these services can collect the information about
demand to help an Internet provider more expeditiously evaluate
its request. The next section discusses the community's role.
2. Communities Can Assist in Evaluation by Quantifying Demand
A community may need to convince an Internet provider that there
is enough local demand to justify the Internet provider's investment
needed to deploy the service. Internet providers decide whether
to provide service in an area based on whether the venture is
expected to be profitable. Communities can survey businesses and
residences to develop expectations of their needs and willingness
to pay for services. If the results show a sufficient level of
demand, an Internet provider will be more likely to seriously
consider the community's request.
Communities attempting to quantify demand should collect information
relevant to measuring the financial feasibility for Internet deployment
for the issues set forth in the previous section of this document.
Two primary means by which this information can be gathered is
through interviews with community leaders and surveys distributed
to businesses and residences. Community leaders may include the
local chamber of commerce, the mayor and other elected officials,
and county commissioners. Community "leaders" may also
include entities most likely to benefit from better Internet services,
or those firms already using the Internet, such as schools, hospitals,
manufacturing operations, and police and fire departments. These
groups and individuals may provide valuable information for the
development of Internet demand in the community. Surveys should
be distributed to a representative sample of residences and businesses,
and the results should be based on sound statistical analysis.
To use an on-line tool to estimate existing service levels and
the potential for demand, use the Telecommunications Infrastructure
Readiness Index (TRI, go to www.communitydevelopment.uiuc.edu/tcii/main).
The TRI is an inventory and evaluation diagnostic of the telecommunications
infrastructure, in a defined community. Three components of the
Part A: The Telecommunications Quotient helps the user
analyze his or her individual affinity for using telecommunications
technology, and understand better his or her knowledge and strengths.
This section of the tool can be used in a working group or committee
to help people plan how to best allocate team resources on a
Part B: The Internet Service Provider Worksheet helps
the community to document existing local telecommunications
service. After completing this survey, a benchmark score is
calculated for future analysis; and
Part C: Assessing Demand for Internet Services provides
a framework for a survey process that the community or organization
can use to assess how people are currently using telecommunications
services, estimate how much more people would use if more were
available, and how much they would be willing to pay for a variety
3. What if No Provider is Interested?
If no provider is interested in serving a community despite the
documented potential for high demand, a community has three additional
options to consider. A community could: 1) seek to deploy its
own infrastructure and serve itself; 2) attempt to partner with
potential providers through a joint infrastructure arrangement;
or 3) provide incentives for private infrastructure investment.
The first option requires the community to form a legal entity
with the financial, managerial, and technical ability to offer
the desired Internet services. Depending upon the services a community
intends to offer, it may be required to receive a certificate
to offer telecommunications service from the state public utility
commission (in Illinois, the Illinois Commerce Commission) and
be subject to the same regulatory obligations required of any
other competitive telecommunications carrier. A community interested
in providing its own service should first consult with an attorney
and a consultant with expertise in telecommunications regulation
and business planning. A second option would be to develop a joint
arrangement with Internet providers, whereby the community deploys
a key part of the network architecture, such as fiber or a communication
tower, that Internet providers can deploy service through a lease
arrangement. This approach eliminates the legal and regulatory
requirements associated with establishing a stand-alone Internet
provider. From an Internet provider's perspective, this may be
attractive since it would minimize the investment risk associated
with technology deployment. A third option is to provide incentives
to private firms to offer the desired Internet services. Using
this strategy, the community could:
- Allow access to rights-of-way for all types of providers;
- Create tax incentives and/or offer grants to Internet providers
that deploy the infrastructure necessary to offer the desired
- Disseminate information about grants and loans available
to providers of Internet and broadband service in rural areas.
Obtaining quality Internet services has been the Holy Grail for
many rural areas. Often, the problem in obtaining service has
resulted from a miscommunication between a community and service
providers. By becoming familiar with the technical jargon and
the evaluation tools upon which providers make business decisions
to provide Internet services, communities can better position
themselves with potential providers. Potential providers also
need to understand the types of services for which communities
desire better Internet services. For example, does the local health
clinic require greater bandwidth for its telemedicine programs?
If so, the provider may be able to provide a product offering
that meets the clinic's needs. By following the tips contained
in the document, a community can go a long way toward understanding
its needs and relaying its requests to potential providers.
This document is designed to be an introduction to the issues
most likely to be of concern as communities plan for telecommunications
infrastructure. It does not present all of the nuances associated
with each of the issues contained herein. For more information,
- University of Illinois Laboratory for Community and Economic
Development ~ www.communitydevelopment.uiuc.edu
- GVNW Consulting, Inc. ~ A telecommunications consulting firm
with services available to communities, including demand analysis,
market assessment, technical expertise, regulatory analysis,
business planning, and communication facilitator between communities
and providers. For more information, contact Jason Hendricks
at email@example.com, phone 719-594-5800 or 217-698-2701.