Broadband Programs Transform Rural Economies

Despite pioneering the development of the Internet and the World Wide Web, the U.S. for years has lagged behind other industrialized countries in offering broadband services to its citizens. The U.S. ranks 16th in per capita broadband subscribers, and even when Americans do receive high-speed Internet services, they frequently pay more for lower speeds that their counterparts in Asia and Europe. A new report from the Alliance for Public Technology, the third in a series of reports on U.S. broadband, calls attention to the need for improved broadband services and provides some examples of states and regions that have stepped in to make sure that their economies benefit from the Internet revolution.



The group offers several policy recommendations to frame a national broadband strategy that could help the U.S. bridge its substantial gaps in broadband adoption. These include establishing national goals for deployment, setting standards for reporting broadband data, fostering private investment and competition, requiring Universal Service Fund recipients to offer broadband, providing new incentives for providers, and creating a federal Office of Broadband. They also recommend that the federal government employ non-traditional, non-telecommunications-based strategies to increase adoption, as has been done in many states.



The authors highlight regional programs across the country that are expanding and leveraging their broadband infrastructure to drive community development, disability access, education, health care, labor and economic growth and public safety. The report cites several state and regional programs that have helped to improve regional economies, including the Beyond Tobacco technology development program in Greene County, N.C., a heavily tobacco-dependent rural community. The initiative offers free computer and web classes, online agricultural resources and worker training to improve broadband adoption and demand. A county-wide wireless network has been paired with the initiative to modernize the community's economy.



Download Broadband Initiatives: Enhancing Lives and Transforming Communities at: http://www.apt.org/publications/reports-studies/broadband_initiatives.pdf



Kentucky's statewide broadband initiative, ConnectKentucky, launched in 2004 to extend the benefits of high-speed Internet to underserved communities. Though the key mission of ConnectKentucky is to achieve full broadband deployment by the end of 2007, it has also worked with local governments, private companies and universities to increase the use of Internet resources. During its three years of operation, the share of Kentucky citizens and businesses that are able to access high-speed connections has leaped from 60 percent to more than 90 percent. A recent article published by the Federal Reserve Bank of St. Louis examines the effect that the increased availability of broadband has had on the state's county economies and finds that these efforts have had a significant positive impact on the levels and nature of employment



In particular, the study finds that broadband deployment contributes to regional economic dynamism by reducing employment in stagnant, lower-paying sectors while creating new jobs in higher-paying ones. Mining, construction, information and administration sector jobs clearly grew as a result of new IT infrastructure, while real estate and arts and entertainment showed some signs of broadband-related growth. Deployment, however, appears to be linked to the disappearance of accommodation and food service jobs, which the authors believe may be related to the replacement of employees with IT equipment and services. By eliminating these lower paying jobs and increasing the demand for IT services and skilled workers in other areas, broadband availability helps fuel a healthier, growing economy.



The contribution of broadband access appears to be greatest as a regional economy begins to fill in holes in its IT infrastructure. Counties that were just beginning to offer high-speed access and counties that were approaching universal access both benefited less from increased deployment. The authors suggest that in order to maximize the economic benefit of broadband programs, states would target their efforts to communities with average levels of availability and underserved communities that will soon be capable of reaping greater benefit from full deployment.



Read The Economic Impact of Broadband Deployment in Kentucky at: http://research.stlouisfed.org/publications/red/2007/02/Shideler.pdf