Thursday, October 2, 2014

Broadband and Tech

EDITOR’S NOTE: Previous articles in this series examined broadband availability and trends in broadband adoption in rural areas of the U.S. This article explores the relationship between broadband and the rural economy. The academic paper on which this article is based may be found here.

Much has been made about the potential benefits of broadband for rural communities. There are plenty of examples relating to education, health, telecommuting, entrepreneurship and e-services that suggest broadband can be a panacea for rural economies.

But since broadband has been around for a while now, what can we really say about the impact it has had on rural areas? Is it really true that rural areas that have embraced broadband are growing faster, have lower levels of unemployment or have more businesses or firms than those that have not?

To get an answer, we looked at all non-metropolitan counties across the country. The FCC has some great data sets that tell us, at the county level, the percentage of households that have a broadband connection (note that these only include wired connections, and meet the traditional FCC definition of broadband of 200kbps in at least one direction). Using data from 2010, we put all non-metro counties into categories from the lowest-adopting (with rates of less than 20%) to the highest-adopting ( more than 80%), and compared them in terms of their 2010 median household income, education levels, number of firms, poverty rates and unemployment rates. Here is what we found:

Figure 1. Median Household Income and Number of Firms for Non-metro Counties, by Broadband Adoption Category, 2010.

Figure 2. Education, Unemployment Rate, and Poverty Rate for Non-metro Counties, by Broadband Adoption Category, 2010.

Broadband and Tech | Growth and Development

Brownback in Chanute Spirit AeroSystems Kansas governor Sam Brownback (left) spoke with a worker at Spirit AeroSystems about an airplane part built at the new plant in April. The company came to Chanute in part thanks to the city's high-speed broadband network.

Chanute, Kansas, two hours from Tulsa, Joplin, and Kansas City, is home to about 9,100 people. As has been true in much of the rural U.S., existing telephone and cable companies were slow to upgrade broadband service here. But local leaders decided broadband was too important to wait for and embarked on a path of self-reliance with smart investments in Internet infrastructure. Using partnerships and careful forethought, a network for Chanute has been built without having to bond or borrow funds.

Chanute’s network actually started in 1984 when the municipal electric utility installed four miles of fiber optic lines to connect a power plant and better manage electricity distribution. Soon, the city also connected the largest consumer of electricity in town, a cement manufacturer, to monitor its electrical demand in real time.

Over the next ten years, city and education leaders realized connectivity would be crucial to the success of the local economy. The school district, Neosho Community College (NCCC), and Chanute’s city leaders talked about the possibilities of an expanded network but were not able to secure funding for new connections in the ‘90s.

Then came 9/11, ultimately leading to tightened homeland security requirements for essential infrastructure. Chanute had to find a way to monitor its utility facilities and identified video surveillance via a broadband network as the best option.