Not Bigger, But Better

Posted: 07/1999

Not Bigger, But Better
Small Telcos Bring Home Advanced Services
By Gail Lawyer

Telephone customers in Roanoke, Va., aren't able to get digital subscriber line (DSL) service for high-speed Internet access from their incumbent telco, New York-based Bell Atlantic Corp. But customers of R&B Communications Inc. in Daleville, Va., a less densely populated area to the north of Roanoke, soon will be able to get DSL service, or choose wireless cable TV or 10 megabits per second (mbps) high-speed Internet access.

R&B is just one of many small independent telcos that is using technological innovations to keep their customers, who live in primarily rural areas, moving into the 21st century.

These small, rural local exchange carriers (RLECs) are proving the digital divide can be prevented with a little help from forward-thinking telco management and new-and-improved technology.

"People from rural areas have as much, if not more, of a need for these services than others," says Carl Rosberg, president and chief operating officer of CFW Communications Co., Waynesboro, Va. CFW rolled out DSL service throughout its telco territory in late 1998 and early 1999.

The small telcos, like R&B and CFW, have developed a strong commitment to their communities in their more than 100 years of providing telephone service there. That commitment, say telephone executives, encourages them to seek new ways to bring rural customers the same, if not better, service than customers served by large telcos or living in urban areas receive.

The larger telcos don't seem to have the same commitment to these small towns. The Bell companies, Irving, Texas-based GTE Corp. and other large independent telcos have divested themselves of almost 1.5 million access lines in rural areas since 1992, choosing rather to focus all their resources on larger cities where more competition is occurring.

Small telcos "are not looking to milk, rape or pillage, but to build up their networks. A lot of politicians and regulators are concerned that if the big guys leave, rural territories will be left in the lurch. But service provided by these [smaller companies] is generally better," says Michael Balhoff, managing director of the telecom research group at Legg Mason Wood Walker Inc., a Baltimore-based investment firm.