On Friday, April 12th, President Trump and Federal Communications Commission Chairman Ajit Pai announced the repurposing of $20.4 billion from the existing Universal Service Fund, which provides subsidies to various rural telecommunication programs, to create the Rural Digital Opportunity Fund. This follows the creation of the ReConnect Program through the 2019 Farm Bill, a $600 million grant and loan program through the USDA to also support rural broadband development. On the state level, we see states like Pennsylvania making broadband infrastructure development a major priority in the $4.5 billion Restore Pennsylvania initiative. Locally, regions are grappling with how they can best fund and manage local broadband networks after being inspired by successes in Ammon, Idaho or Chattanooga, Tennessee.
Here at Fourth Economy, the impact of broadband infrastructure is rising to the top as an issue facing our clients. In the United States, roughly 20 million Americans lack access to speeds of 25 Mbps, the FCC’s minimum threshold for broadband (This is barely enough for a 4-person household to stream video). Broadband is not only important for the next tech hub or to enable the gig economy; it’s critical for business transactions, marketing of products, and further development of local economies.
As we learn more about the issues and impacts of broadband, we wanted to share two interesting points that have come into focus:
1. Broadband is not just a rural issue
While access to adequate broadband is undoubtedly an issue that is hampering growth in many parts of rural America, a 2018 Pew Research Center survey found that 13% of adults in urban areas say that access to high-speed internet was a major problem (24% of rural adults reported it as an issue in the same study). In our work with Connect Greater Newport in Rhode Island, the lack of reliable, fast broadband has inhibited the expansion and investment in businesses in the region. In fact, the network went down on Labor Day weekend, which was the last major tourist weekend of the season. Businesses were unable to process credit cards most of the day, causing a major loss of revenue. Broadband plays a pivotal role in dense business districts as well as rural communities.
2. Every industry relies on the internet
Broadband supports more than tech companies, advanced manufacturing, or businesses in similar industries. During our work with agricultural communities in West Virginia, one of the most mentioned issues in the community engagement process was the lack of access to the internet. Without the internet, farmers have a difficult time marketing their products or acquiring technology to increase efficiency for their operations. As the use of robots and other technology reliant on broadband develops for agriculture, these areas need access to support their local communities and economies. This issue relating to agriculture specifically has led to organizations like the Farm Bureau adding broadband access to their platform as well as the inclusion of more funding in the 2019 Farm Bill.
What can be done to improve access?
So, after highlighting broadband and its vast impact, the question is, what can be done to improve access? Like many development issues, collaboration and coordination between state and local stakeholders will make the process much easier. The development of public-private partnerships, nonprofit authorities or other governing bodies can play a role in funding and managing the deployment.
While these local efforts are continuing, we see federal initiatives kicking off, including the major funding allocations mentioned above. As the 2020 presidential race picks up, we hope the leaders of tomorrow, especially those looking to connect with voters in rural areas, recognize broadband for what it is - broad in its application and benefits, and central to the conversation around regional growth and development.