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Derived From: Lennard Kruger, CRS Report to Congress, Broadband Loan and Grant Programs in the USDA's Rural Utilities ServicePDF (May 15, 2008)

"Broadband" refers to highspeed Internet access for private homes, commercial establishments, schools, and public institutions. Currently in the United States, broadband is primarily provided via cable modem (from the local provider of cable television service) or over the telephone line (digital subscriber line or "DSL"). Other broadband technologies include fiber optic cable, fixed wireless, satellite, and broadband over power lines (BPL).

Broadband access enables a number of beneficial applications to individual users and to communities. These include e-commerce, telecommuting, voice service (voice over the Internet protocol or "VOIP"), distance learning, telemedicine, public safety, and others. It is becoming generally accepted that broadband access in a community can play an important role in economic development. A February 2006 study by the Massachusetts Institute of Technology for the Department of Commerce's Economic Development Administration marked the first attempt to measure the impact of broadband on economic growth. The study found that "between 1998 and 2002, communities in which mass-market broadband was available by December 1999 experienced more rapid growth in employment, the number of businesses overall, and businesses in IT-intensive sectors, relative to comparable communities without broadband at that time."

Subsequently, a June 2007 report from the Brookings Institution found that for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3% per year. For the entire U.S. private non-farm economy, the study projected an increase of about 300,000 jobs, assuming the economy is not already at full employment.

Access to affordable high-speed Internet service is viewed as particularly important for the economic development of rural areas because it enables individuals and businesses to participate fully in the online economy regardless of geographical location. For example, aside from enabling existing businesses to remain in their rural locations, broadband access could attract new business enterprises drawn by lower costs and a more desirable lifestyle. Essentially, broadband potentially allows businesses and individuals in rural America to live locally while competing globally in an online environment.

Given the large potential impact broadband may have on the economic development of rural America, concern has been raised over a "digital divide" between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities,3 recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. For example:

  • A September 2004 Department of Commerce report, A Nation Online: Entering the Broadband Age, found that a lower percentage of Internet households have broadband in rural areas (24.7%) than in urban areas (40.4%), and that "while broadband usage has grown significantly in all areas since the previous survey, the rural-urban differential continues."4 The report also found that broadband penetration rates are higher in the West and Northeast than in the South and Midwest.
  • A May 2006 report released by the Government Accountability Office (GAO) found that 17% of rural households subscribe to broadband, as opposed to 28% of suburban and 29% of urban households.6 GAO also found that lower broadband subscription rates in rural areas are related to availability, not to a lesser tendency of rural households to purchase broadband service.
  • 2007 data from the Pew Internet & American Life Project indicate that while broadband adoption is growing in urban, suburban, and rural areas, broadband users make up larger percentages of urban and suburban users than rural users. Pew found that the percentage of all U.S. adults with broadband at home is 52% for urban areas, 49% for suburban areas, and 31% for rural areas.
  • According to the latest FCC data on the deployment of high-speed Internet connections (released March 2008), high-speed subscribers were reported in 99% of the most densely populated zip codes, as opposed to 91% of zip codes with the lowest population densities.
  • Eszter Hargittai on "Chicago Tonight"

    The comparatively lower population density of rural areas is likely the major reason why broadband is less deployed than in more highly populated suburban and urban areas. Particularly for wireline broadband technologies - such as cable modem and DSL - the greater the geographical distances among customers, the larger the cost to serve those customers. For example, in providing telecommunications services, investment per subscriber in rural systems averages $2,921 compared to $1,920 for urban.10 Thus, there is often less incentive for companies to invest in broadband in rural areas than, for example, in an urban area where there is more demand (more customers with perhaps higher incomes) and less cost to wire the market area.

    The terrain of rural areas can also be a hindrance, in that it is more expensive to deploy broadband technologies in a mountainous or heavily forested area. An additional added cost factor for remote areas can be the expense of "backhaul" (e.g., the "middle mile") which refers to the installation of a dedicated line which transmits a signal to and from an Internet backbone which is typically located in or near an urban area.

    Cable modem and DSL currently comprise over 60% of broadband deployment nationwide. However, because of the challenges of deploying these technologies in low population density areas, other broadband technologies have been identified as perhaps offering potential in rural areas. These include mobile wireless (cellular), fixed wireless (WIMAX, wi-fi), satellite, and broadband over powerlines (BPL).

    Derived From: Broadband Internet Regulation and Access: Backbround Issues, CRS Report for Congress, Nov. 21, 2008 (copy acquired through wikileaks)

    "While the number of new broadband subscribers continues to grow, the rate of broadband deployment in urban and high income areas appears to be outpacing deployment in rural and low-income areas. According to the latest FCC data on the deployment of high-speed Internet connections (released March 2008), high-speed subscribers were reported in 99% of the most densely populated zip codes, as opposed to 91% of zip codes with the lowest population densities. Similarly, for zip codes ranked by median family income, high-speed subscribers were reported present in 99% of the top one-tenth of zip codes, as compared to 92% of the bottom one- tenth of zip codes."

    "Similarly, 2008 data from the Pew Internet & American Life Project indicate that while broadband adoption is growing in urban, suburban, and rural areas, broadband users make up larger percentages of urban and suburban users than rural users. Pew found that the percentage of all U.S. adults with broadband at home is 60% for suburban areas, 57% for urban areas, and 38% for rural areas.

    "Some policymakers assert that disparities in broadband access across American society could have adverse consequences on those left behind. Many believe that advanced Internet applications — voice over the Internet protocol (VoIP) or high quality video, for example — and the resulting ability for businesses and consumers to engage in e-commerce, may increasingly depend on high speed broadband connections to the Internet. Thus, some say, communities and individuals without access to broadband could be at risk to the extent that e-commerce becomes a critical factor in determining future economic development and prosperity."

    Federal Activities


    Source: US Telecom
    Digital Opportunities Task Force
  • Clinton, G-8 Create Digital Opportunity Task Force 24 July 2000
  • G8 IT Digital Opportunity Task force (dot force)
  • Final Report of the Digital Opportunity Task Force
  • Markle Foundation Dot Force Resource Page
  • Public Voice encouraging input to the DOT Task force
  • Definitions of Rural

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