Broadband for Rural America: Economic Impacts and Economic Opportunities. Economic Policy/Briefing Paper

Historically, waves of new technologies have brought Americans higher standards of living. Electrical service and hot and cold running water, for example, were once luxuries; now their absence makes a home substandard. Today, technologies for accessing the Internet are diffusing at an even faster rate than those earlier innovations once did, bringing with them commensurate transformations of Americans' way of life. Technologies that increase the speed at which data can be transmitted have had powerful effects. Most importantly, they have transformed the Internet from a tool used by a narrow group of academics and technicians into a means of interaction used by a large majority of Americans. However, Americans have not universally benefitted from better Internet access. Geography, especially the divide between rural and urban America, determines how much some Americans can benefit from the Internet. Networks have not been as extensively developed in rural areas as in urban areas. Some people in rural America still have dial-up as their best available, affordable technology, a technology that offers five percent of the capacity for what the FCC has said is the broadband threshold. Others have service that reaches the broadband level, but still does not offer the "lightning-fast" speeds advertised by Internet service providers in urban areas. Accordingly, the nation faces a "broadband gap," not only with regard to the lack of access in rural areas to service that meets the broadband threshold, but also with regard to the lack of availability of faster service between urban and rural America. This report identifies opportunity costs that arise from this gap. These costs exist today, but the pace at which data transmission capability is growing means that the inequality between the technology being newly deployed and the technology that was deployed a decade or more ago is increasing. Networks that connect research institutions in the United States can move 100,000 times more data per unit of time than the dial-up connections that some Americans still must use. The technology gap is not a fixed deficit that once filled, stays filled. The technology gap will be larger--much larger--in the future, along with the information and technology gap, unless significant action is taken to overcome it. (Contains 2 figures, 1 table, and 19 footnotes.)