Let’s talk about broadband internet! If you are reading this post then you are quite likely familiar with how powerful of a tool the internet can be. The internet allows us to communicate with people from all over the world, have easy access to a plethora of information, apply for jobs, buy goods from all over the world, and other things that are too numerous to mention here. The internet has shaped our world by making it smaller and bringing us closer together. Despite all of the exciting possibilities offered by the internet however, a significant chunk of the population of our country is still unable to access high speed internet. As you can see by the map to the right, many rural areas currently lack access to broadband internet (these are represented by the areas in blue). Before we can address any rural issue, we must address broadband. The internet is a portal to the world and essential for both education and economic development. In order to compete in the 21st century, it is an imperative that rural America be connected to high speed internet.
Broadband as a Utility
In February of 2015, the Federal Communications Commission voted to classify broadband as a utility. In September, the White House released a report saying that broadband was an “essential utility” alongside water, electricity, and the telephone. Both of these actions point to a recognition of the role that broadband internet is increasingly playing in our society. We use broadband internet at work, school, and in our leisure time. Almost every sector relies on the internet or uses it in their work. It allows professionals to network and research, it allows those who build and farm to advertise and sell their goods, and it allows merchants to sell their goods in far flung marketplaces. The internet has become more than a pass time, it has become a marketplace and the modern day equivalent of the Roman forum.
The discussion of economic development benefits is not without evidence. A 2009 USDA study found that rural America’s ability to compete in the changing economy is dependent on accessibility to broadband. A study done at the Center for Urban and Regional Affairs at the University of Minnesota found economic growth in rural areas that are connected to broadband internet.
Broadband internet also opens up the possibility of online classes to further a person’s career, many brick and mortar schools such as the University of Maine offer online courses and degrees. It also opens up the ability for local schools to offer distance learning courses to local students who may not have the time or ability to make it to a brick and mortar campus.
The internet has also become the central communicative medium in our society, much like the telephone did almost a century ago. Much like with the initial expansion of the telephone however, rural citizens are being left behind.
Connecting Rural Areas to Broadband
In 2010, the FCC unveiled the Connect America Fund, a plan to allow private carriers to receive federal funding to expand broadband service to eligible rural regions. It is a noble enough plan and the federal government no doubt had good intentions but there is evidence to show that the money being allocated by the federal government may not be sufficient to meet the needs of the carriers. In August of 2015, FairPoint received $37.4 million over the next 6 years to expand broadband into the rural areas of 14 states. The conditions of the grant of course require the companies to chip in some of their own capital. There are also conditions that must be met in order to satisfy the terms of the grant. This forces companies make assessments of where to apply the grant based on how much money they would have to invest in completing the project. This can obviously have a chilling effect on companies applying for grants as supplying broadband is costlier in some areas than others. For example, putting broadband in the White Mountains is substantially more challenging than doing so in a flat area with minimal elevation change.
Is the Connect America Fund the best that we can do? Maybe not. To fully address this problem, we need to be more aggressive. In my opinion, we can look to the rural electrification efforts of the 1930s and 40s for a template for how to handle the scarcity of broadband coverage in rural communities.
One of the key components of that program was that the federal government built the infrastructure and then turned it over to local farmers who had banded together to form a coop that would manage the newly built utility. Unlike with the Connect America Fund, this infrastructure was not built using grant money but rather through low-cost loans given to these coops.
We could do a similar program today, but it would require a substantial upfront cost. The changing rural social landscape also makes it less likely that a groups of farmers would be able to band together to own a coop, we’re a much more urbanized society and corporate farming has (sadly) largely taken over for the family farmer. However, there are opportunities to create partnerships with counties, towns, and other municipal levels of government and there is even precedent for a successfully managed municipal broadband service. In 2008, Wilson, North Carolina made its municipal fiber optic service available to citizens of their town and the expansion was largely paid for by the city floating $35 million in bonds into the private market. The result was the creation of the first gigabit fiber optic network in North Carolina. The fact that a small rural city in eastern North Carolina achieved this before Raleigh or Charlotte is astounding. They were so successful in their expansion that they sought to offer the service to neighboring communities. In their attempts to expand their broadband service however, they are meeting opposition from the State of North Carolina, which recently passed a law banning municipalities from expanding their internet services into surrounding rural communities. They appealed to the FCC for help but a federal appeals court upheld the regulation.
We can see more stories like Wilson if we invest money in local communities to develop their own utilities. As we saw with rural electrification, the upfront costs will be covered monetarily and the economic benefits will be numerous.
I also want to highlight the $35 million that Wilson, NC spent to expand their broadband. This is only slightly less than FairPoint received to expand broadband across 14 states. It is clear that we are not doing enough and we should be doing more to address this problem.