Why some U.S. homes and businesses still don't have cellular service

Can U.S. regulators and private carriers beef up cell phone service to under-served rural areas?

If you've ever driven along a major U.S. interstate and found you had no wireless reception for miles, you are not alone. Even today, there are entire areas of the United States where people live and work without reliable wireless reception.

Take, for example, Wyoming County in West Virginia coal country. Its residents and businesses are struggling to promote economic growth while putting up with spotty, slow or even nonexistent cellular voice and data service.

The county sits at the southern edge of the state, about 340 miles southwest of Washington, D.C. Half the children in this county of 24,000 people live below the poverty line and the lifeblood coal industry has been sagging for 18 months.

Still, county officials are optimistic: Two elementary schools and a federal prison are being built and there's a new Arby's in Pineville, the county seat. The county has set up the John D. Rockefeller Industrial Park, eight miles from Pineville, to attract new businesses. Christy Laxton, the top economic development official for Wyoming County, sees a promising future, even though sub-par cellular service thwarts the county's efforts.

"Things are happening in Wyoming [County], but ... new businesses [have] to face the challenge and expense of finding Internet service and cellular," Laxton says.

"Unless you are within the city limits of Mullens, Pineville and Oceana, you likely don't have cell service at all, much less 3G cellular," she adds. "We have pretty good Internet service covering the county, but cell service is lacking tremendously and is the number one complaint" of area residents and companies. She calls it "our most lacking infrastructure," even ahead of power and public water and sewer facilities.

This map shows the percentage of population in each state of the U.S. that doesn't have access to at least 3G voice and data services. It uses FCC coverage data from September 2012 and U.S. Census Bureau population data from 2010. Map and data analysis by Sharon Machlis using Fusion Tables.

As a result, new business executives arriving in the county often find that their mobile phones are unworkable -- meaning they might need to switch carriers or find other workarounds if they decide to set up shop. "It's pretty much like running against a concrete wall," Laxton says, calling the cellular deficiencies a "10" on the bad end of the frustration scale.

For example, Gas Field Services has built a field office in Wyoming County's industrial park, but satellite communications are unreliable and cellular communications are wanting from both AT&T and Verizon.

"We have used AT&T and Verizon and neither is of any account. Service from the top of the mountain might work but not other places," says Zachery Reed, vice president of operations for Gas Field Services, which needs constant communications with work crews in the mountains. "We're five to 10 years behind other businesses. We won't expand or build more here because of the lack of communications." (The company's administrative offices are far away in Rosedale, Va., where there are five telecom providers and ample communications.)

Gas Field Services employs about 100 people, but doesn't even operate a website because communications are so poor. Satellite has proven unusable on cloud and rainy days, according to Reed, and a T1 wired Ethernet connection to the field office would be too expensive. Reed said that Internet connections have improved slightly because Shentel (Shenandoah Telecommunications) recently ran a wired connection to a location near the office park that allows Gas Field Services to connect to via Wi-Fi routers.

"The big wireless carriers always say, 'Well, it's just West Virginia and the mountains. There's nothing we can do,' and that's been the story for five years," Reed says. "I know it's expensive to build a cell tower or making other improvements, but not doing so definitely hurts West Virginia."

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An historical perspective

Since the creation of the telephone, the problem of providing better communications service to underserved rural markets has always come down to market dynamics. Carriers want to build their expensive networks in regions with the most customers. In many places, the lack of economic incentives leaves the nation's small rural carriers to scrape together partnerships for spectrum and service.

Chris Nicoll, an analyst at Analysys Mason, argues that the nation's wireless networks are suffering from entrenched historical problems that are difficult to fix. "The gaps in wireless coverage and the inertia in filling them comes from the way the licenses were originally awarded decades ago, which was done market by market, " Nicoll notes.

In Europe, by comparison, an entire country was put up for a wireless license at the same time. "I'm not saying we ever should have gone to a national license, since the way it was done allowed smaller companies to bid," Nicoll says. "But as a result, our wireless coverage is so fragmented that it's impossible to have a comprehensive strategy."

At the same time, Nicoll says, the U.S. has created a wireless market duopoly dominated by AT&T and Verizon, which are each twice the size of either Sprint or T-Mobile and which control most of the wired infrastructure. "There's a lot of wireless competition in the U.S., but not ... at the top four where you have Verizon and AT&T and then much smaller Sprint and T-Mobile. When you step back and look at the bigger picture, there's no ability to acquire spectrum other than by acquiring other operators."

Adding to the problem is that fact that, for many communities around the country, building more cell towers can be controversial -- especially after the FCC, in 2010, approved rules designed to speed up the review process of towers in towns and counties, a measure supported by wireless carriers and tower construction companies.

Some opponents say new cell towers, built at an average cost of $200,000, will be an eyesore and spoil the appearance of a pristine mountainside or forest, or add clutter to an urban environment. For example, in January 2013, residents in New Ulm, Minn., said a proposed 120-foot LTE tower on the grounds of Martin Luther College would devalue their property, and opposed alternatives that included a mono-pole design or a "mono-pine," designed to look like a green pine tree.

In addition, communities are sometimes concerned that the electro-magnetic field (EMF) near a cell tower could pose health hazards, not dissimilar to the way some health advocates worry about constant use of a cell phone held close to the head. In either case, the cellular industry staunchly argues that there is insufficient evidence of health problems.

An important issue

The causes behind Wyoming County's cellular service problems are complex, but serve as a microcosm of what's happening in many rural areas across the U.S. For businesses trying to locate in or near such areas, acquiring cellular communications can be frustrating, expensive and confusing.

In a report issued in August 2012, the FCC stated that 19 million Americans -- about 6% of the total population of 320 million -- were not served by broadband. For example, FCC data indicated that almost 93% of Wyoming County's population was not served by a minimum of 3G wireless service. (3G is defined by the FCC (PDF) as being less than 200Kbps on downloads and 50Kbps on uploads; as a comparison, most carriers describe 4G LTE as providing 10Mbps for downloads and 4Mbps for uploads.)

And they are not the worst off. Fifteen other counties (with smaller populations) had less access to wireless service than Wyoming County, according to the FCC's data. Three counties in Alaska, Hawaii and Nebraska, each with fewer than 1,000 residents, were listed at 100% without 3G or faster service.

[The four largest U.S. carriers -- AT&T, Sprint, T-Mobile and Verizon Wireless -- all have ambitious plans to grow their wireless networks in coming years. But do these plans include those who are currently under-served? We look at each company in our article Carrier solutions for areas without 3G/4G]

Wireless as a catalyst for economic growth

Wyoming County's Christy Laxton isn't the only one who ties the economic well-being of a location to its cellular service. The FCC and other federal officials have focused on expanding wireless service as an engine for economic growth and development.

"Cellular coverage in outlying rural areas is a big deal to a lot of companies," including branch offices of large corporations such as mining, manufacturing and even retail, says Bill Menezes, an analyst at Gartner (who spoke as an individual). "That's what's so crazy about wireless. You may have coverage for a highway or a secondary road, but in the valley there's nothing."

According to Menezes, the attitude of state and federal regulators and carriers has been, for many years, "if you live out with the moose, you have to put up with what goes along with that." However, that's changing. "Government today seems to be less about setting up communications lifelines and universal service as it was in the 1930s, and more about economic development with [wired and wireless] broadband in areas where the economy may be slow or depressed," Menezes says.

The FCC's Connect America Fund (CAF), which was created in November 2011, offers a wide set of incentives and goals for building wired and wireless networks in the most remote areas of the nation. It encourages eligible carriers -- picked through auctions and other means -- to build out those networks by providing $4.5 billion annually, through 2017. It is funded by Universal Service Fund fees paid by telecom customers via their monthly bills.

When the CAF was first announced, the FCC said it would bring broadband communications to all 19 million underserved Americans by 2020. According to the commission document, "The CAF will help make broadband available in homes, businesses and community anchor institutions in areas that do not, or would not otherwise, have broadband, including mobile voice and broadband networks in areas that do not or would not otherwise have mobile service."

Of the annual $4.5 billion funding, about $900 million was originally reserved for a portion of the CAF called the Mobility Fund, designed to improve wireless service, mainly along highways.

Last fall's phase 1 Mobility Fund auction will result in coverage of dead zones on 83,000 road miles -- where millions of Americans live, work or travel -- over three years. (An FCC spokesman called this a "resounding success.") Phase 2 of the Mobility Fund will beef up mobile services with new cell towers and networks using $500 million annually, while the FCC is also providing $50 million in a one-time support for wireless improvements on Tribal Lands.

This FCC map shows the areas identified as eligible for Mobility Fund Phase 1 support as of September 2012. Courtesy Federal Communications Commission

However, an FCC auction last fall only used half of the $300 million allocated under Phase 1 (the rest will be allocated under Phase 2), even though about 800 contractors nationwide won jobs to fill gaps in wireless coverage -- work that is beginning this spring.

"If you believe in the concept of universal service, the government needs to take more steps to require or subsidize that mobile wireless footprint," says Gartner's Menezes.

FCC chairman Julius Genachowski has proposed new ideas on ways to expand wireless coverage, including using part of the 600MHz band for more public Wi-Fi. A separate set of broadband acceleration initiatives announced in January makes it easier to upgrade cell towers and provide portable cellular antennas for major public events, like the presidential inauguration.

One carrier might not be enough

One concern for many companies hoping to expand or set up operations in a relatively rural area or low-population county like Wyoming County is that even if there is at least a single cell provider, roaming agreements with other carriers aren't in place. Or if there's a roaming agreement between carriers, it usually involves additional fees and costs for the users who need to roam over that partner's wireless network.

In Wyoming County, the only service provider is AT&T, which runs on the GSM standard. As a result, customers who use Sprint or Verizon Wireless (which are based on CDMA) can't roam to AT&T. "People who have Sprint can't even get service," Laxton notes.

Laxton recalls how she was delighted to be able to bring two young AmeriCorps Vista workers to her agency to work on economic development planning, but neither had an AT&T cell phone, which meant they couldn't use their existing phones and had to buy AT&T phones and contracts, requiring new phone numbers and added expense.

She isn't critical of AT&T, which sells residents and businesses small indoor microcell devices to connect to the Internet wirelessly if they can't get wired service. There are also wireless boosters available for cars driven in the county, "but it has to be over AT&T cell service and that can still be spotty," she says. Even satellite service to the county's industrial park hasn't been practical.

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