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National vs. Rural Internet Pricing

May 1, 2017, 00:00 AM by Natalie Johnson
When you live in a small town (especially if you were once a city-dweller), you love the pace of life but may miss one major perk: high-speed internet at urban pricing. You may even think, “Well, I guess I don’t really need the speed.” Or you might just grumble, “How can they charge these rates?”...

When you live in a small town (especially if you were once a city-dweller), you love the pace of life but may miss one major perk: high-speed internet at urban pricing. You may even think, “Well, I guess I don’t really need the speed.” Or you might just grumble, “How can they charge these rates?”

 

The truth is, comparing national providers with rural providers isn’t apples to apples, and it’s not just about the service that you finally enjoy as the subscriber. Every bit of the technology has a cost, and where you live directly affects your final bill. Here’s what you need to know to understand what you’re getting as a rural customer.

 

National Carriers

The “big boys,” like AT&T, Comcast, Charter, and Time Warner, are not only well-known internet providers, but they own and generate large amounts of media content that you’ll see on your television or online. So, whether you are in an area serviced by them and can subscribe to their services or not, you know their names and may even consume their programming. Their audience is vast, just like their service areas.

 

National carriers serve densely populated areas (with tens or even hundreds of thousands of people) so they can target large numbers of subscribers that are close together to maximize the use of their networks. They aim to reduce costs by outsourcing sales and support overseas, and avoiding less-populated areas that would require building more pedestals (service boxes) to service fewer people (and running longer spans of cabling). The large volume of customers and cost-saving measures enable them to offer lower-priced service plans, and they can afford customer “churn” (losing and gaining customers repeatedly). Quality is also not as important because they make up for it in volume. And as a final benefit, communications taxes can kick back to those providers, so urban areas offer another financial advantage. And it also means that urban subscribers still pay extra on their “cheaper” service through taxes.

 

But that’s also why you won’t see the national carriers set up shop in rural areas. There is not enough profit to acquire so their margins are too lean.

 

Rural Carriers

Local rural carriers (like Madison) service much smaller populations—a couple thousand, rather than the massive population centers national carriers provide for. Plus, rural service runs not only to individual properties, but spans the farmland and wide open spaces between. Because infrastructure, the subscriber base, and tax pools are smaller, while technology costs are higher, rates may not seem “competitive” with national brands.  Below are key reasons to support your rural provider:

 

  • Our staff live and work in this community
  • We offer quality wages and keep the tax dollars local to support the community
  • Our workforce is 100% USA-based (no outsourcing overseas)
  • Network quality is as important to us as it is to you (since we all live in the same community, we use the same services as you do)
  • We offer the best service at the best price with lean margins
  • We typically serve areas that the national companies won’t

 

Pricing Comparison Trap

It’s easy to compare nationally-televised internet rates with local providers and draw conclusions about the value. But now that it’s clear why pricing can vary so much from region to region (and especially from urban to rural markets), the best comparison for your wallet is between your local service providers. It’s also more than just rates—what quality and capacity of service can you get? And of course, what do you need?

 

Our residential internet packages can reach speeds up to 100Mbps. Local competitors may offer lower speeds for lower prices. Yes, they’re cheaper, and if you just want to check email and a couple websites from time to time, it’s a bargain that might meet your needs. But it’s almost 17x slower! Do you download music? Do you subscribe to Netflix or Hulu or any other streaming web service? How many people in your household have devices that can connect to Wi-Fi? And how many devices do each of those people have?

 

These days, even a single-person household can be filled with internet-connected devices: phone, computer, tablet, TV, Blu-ray player, video game console, thermostat, and even your lights or appliances! That many devices connected all at once to the internet? That takes a good high-speed connection.

 

So, choose your internet service based on your needs, comparing with other local companies that service the same community. As your internet needs grow, you’ll likely feel very lucky to have a local company that can offer the high speeds (like the big cities do) at community-sustaining pricing that benefits your local economy and is still affordable.