Scholars Stew over Broadband's Rural Benefit
10/03/2008
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Some of the best minds in rural economics and online technology gathered at the Economic Research Service in Washington, D.C., this week to explore broadband Internet – its reach and its potential in small communities. A broadband connection, in contrast with dial-up, speeds access to the Internet and makes it possible to send and receive a much wider range of media – large data sets, photographs, music, videos, even entire movies. The workshop atmosphere was wholly congenial (economists don’t throw off many sparks). But in two days of presentations there were plenty of crossed wires. The experts disagreed over two core questions -- whether rural areas indeed do lack access to broadband technology and whether high-speed connectivity can appreciably diminish the “rural penalty” – chronic disadvantages in personal income, employment, health care services, and education. John Horrigan reported from Pew’s latest survey (August 2008), showing 64% of rural adults use the Internet at home; 41% of rural adults connect at home via high-speed/broadband service (57% of urbanites use broadband at home). Horrigan’s survey found that rural customers paid only slightly more on average for broadband than urban subscribers. In the Pew survey, 24% of rural Internet users said they would move from dial-up to broadband if high-speed connection were available; this finding alone suggests that significant stretches of rural America do lack high-speed Internet service. But the fact is no one really knows how available broadband is throughout the rural U.S. Because of how the FCC handles its Internet technology (IT) data, a whole county may appear to have high-speed access when in fact one large company has paid for a broadband connection and is its sole user.  The number of high-speed Internet providers as of Dec. 31, 2006. Blue=7 or more providers; orange=3-6; peach=1-3; green=0. FCC overestimates broadband access in rural areas because a "provider" may only connect one local business to the Internet. With the extent of broadband access so unclear, research for the most part can only be tentative in assessing how high-speed connections have affected or might affect rural schooling, work, health care, and civic engagement. “Measuring the rural economic effects resulting from the investment in broadband is challenging,” wrote Peter Stenberg of ERS, a conclusion echoed many times over the two days. Janet Poley, a distance education expert from the University of Nebraska, said that demand for online study is growing, and as online teaching tools increasingly involve not just pages of text but “bandwidth hogs” like complex simulations, broadband will be a requirement for at-home learners. “I think we’re lagging,” she said of broadband availability in rural communities. Yet Poley also stressed that there has already been far greater investment in technology than “in educational applications” – the kinds of teaching materials that best serve distance learners. Robert Crandall of the Brookings Institution cast doubt on the efficacy of federal subsidy for broadband. “We want to be very careful about selling broadband to increase overall job growth in the rural economy,” he said – because there’s very little evidence that increasing broadband access indeed does create jobs. Crandall also made reference to University of Chicago economist Austan Goolsbee’s study of a major subsidy of IT in California schools; Goolsbee found no significant effects on student performance. John Leatherman of Kansas State, looking at the dynamics of e-commerce and IT producers and users in Kansas, argued “There is no evidence that technology will do away with the rural penalty.” His study, available here, concludes that geography remains a strong feature in economic success: in his research, “as distance from the metro hub increased, the worse e-commerce-intensive industries performed.” Catherine Mann of Brandeis, a specialist in global economics, argued that Internet technology benefits some business sectors far more than others. Service industries, she found, showed a bigger return on IT than manufacturing; further, she demonstrated that manufacturers more wisely invest in IT linkages to their suppliers, service industries in technologies that connect them to consumers. As for small businesses, they generally, “cannot determine the benefits of investing in IT,” Mann said.
The topic of rural culture, submerged throughout the two days at ERS, was nonetheless visible swimming just below the surface. Brian Whitacre of Oklahoma State University, studying why relatively few farmers have adopted the Internet, found that the number of local IT providers in a rural area had no impact on their decision. It wasn’t that farmers had no access to broadband, it’s that they didn't want it. One especially revealing finding, from Leslie Stoel of Ohio State, was that rural residents who had yet to implement e-commerce ideas were more positive about the benefits of technology than were ruralites who’d actually set up business websites. “Users are more realistic,” Stoel said. At the outset of the gathering, Mary Bohman of the ERS acknowledged a chicken and egg problem: “Is broadband in places that are already vibrant?” Or does improved Internet technology bring vibrancy to rural communities? Answers to these and many more questions will require having more reliable information about who actually has access to broadband, and where. This week, despite more pressing obligations, both the Senate and House managed to pass The Broadband Data Improvement Act. The quality of FCC 's information about broadband access and use is bound to improve. At the next meeting of experts on rural broadband, there should be sharper disagreement or clearer accord.
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The Very Real Critical Impact of Lack of Rural Broadband
I am a disabled Vietnam Veteran, living in a rural area, relying on an internet-based business which is being destroyed by the lack of rural broad band availability and my subsequent inability to now compete in my market. I have repeatedly BEGGED local telecom service providers to provide access, but they have refused!
I am considering suing one or more of these companies, as they have received substantial Federal subsidies and tax-payer monies to provide the infrastructure for the Information Superhighway and have not delivered.
The article below will provide background information.
SPONGING AMERICA – ARE WE AWAKE AND SMELLING THE COFFEE?
Thoughts on the Bail-out . . .
By Granville Angell
Any recovery bill in response to the Wall Street meltdown must include cutting the failed financial firms completely out of the loop. We are all familiar with how corporations file bankruptcy, merge or reorganize and rename themselves and they are straightaway back in business. Even in the best of times, the American people have been cheated out of their taxpayer dollars by greedy corporations.
Here is only one example – a travesty – of how this has happened, creating one of the greatest scandals in American history. All too rarely discussed in the media, it has been called the Broadband Scandal. During the 90’s, the Clinton administration oversaw a
bill, allocating $200 billion of taxpayer money, for underwriting fiber optic technology and bringing broadband access throughout the country. Remember the slogan, “The Great Information Highway?” The goal was to provide service capable of providing 45 Mbps in both directions, equally in all areas, urban, suburban and rural, by 2006. We never got it.
The $200 billion to implement this program went to the big telecommunication corporations, including the Bell companies, Quest, Verizon and SBC – now the new AT&T. (Did I mention how these companies buy each other out, change their names and thereby shed themselves of prior responsibilities?)
Having received substantial amounts of this taxpayer money, some of these companies then hammered public service commissions and state legislatures into removing established restraints on telecommunication profits, resulting in higher phone rates and tax perks. Having received these additional ill-gotten funds – in many cases, billions of dollars per state, also in order to pay for the New Information Highway, do you think they provided the agreed upon fiber optic network for 21st Century America? Hell no! Instead, these companies then concentrated their efforts on laying down ADSL, using the existing old copper wiring technology.
Much of this country remains grossly underserved in terms of broadband access, thanks to these greedy telecommunications corporations. The United States now ranks 16th among the developed nations in broadband, with our current DSL speeds being up to 100 times slower than Japan, Korea and other countries. American businesses, educational institutions and private individuals – especially in rural and other underserved areas – have been significantly compromised in their telecommunications access, with some being literally cut out of the system of this essential 21st Century network.
Meanwhile, these telecommunication corporations have pocketed this $200 billion funding package while continuing to raise their fees in a now largely unregulated telecommunications economy. This example of corporate greed easily parallels the greed on Wall Street. In terms of the impact of their greed on the American economy and its ability to compete on the world market, I consider their behavior to be nothing less than
economic treason.
I, for one, have seen my rural business going further and further down the tubes because of AT&T’s refusal to bring in broadband to my area. I recently wrote to the company, saying that I am sick and tired of seeing their broadband commercials all day long, bragging about broadband access anywhere – that I am much closer than the end of the rainbow, the island wreck of Amelia Earhart, or the domain of the yeti, yet AT&T says they cannot bring me broadband!
Yesterday, I learned both the House of Representatives and the Senate passed the Broadband Data Improvement Act (S.1492); this while Congress remains embroiled in the Wall Street bail-out bill. This bill, besides collecting and maintaining data on the status of broadband development throughout the country, is to encourage partnerships between public and private sectors in order to identify barriers to broadband adoption on the state level.
While Congress should be recognized for its efforts on our behalf, how are we American citizens (excuse me, American consumers is the current term) to feel a sense of trust, given the ongoing telecommunications debacle that has already cost us the original $200 billion plus the sting of countless billions bilked from us by increased fees and tax breaks resulting from deregulation of the telecommunications industry? Are we awake and smelling the coffee?
In response to the passing of his current broadband bill, Senator Daniel Inouye said:
If the United States is to remain a world leader in technology, we need a national broadband network that is second-to-none. The federal government has a responsibility to ensure the continued rollout of broadband access, as well as the successful deployment of the next generation of broadband technology.
“Continued” rollout? Do these comments reveal more than one senator’s perception of the importance and benefits of this bill. Is this the prelude of another massive give-away to the telecommunications industry, or does it herald a determination on the part of government to hold this industry’s feet to the fire while demanding an adherence to the original two hundred billion dollar contract?
Does the great Broadband Scandal offer an intimation of what we can expect from a government recovery bill in response to the Wall Street fiasco? Are we disgusted enough of self-serving corporate lobbyists and their predatory stalking of the halls of Washington while Americans – our true patriots and citizens – are dying in the sands of Iraq and Afghanistan?
Copyright 10/08 by Granville Angell - Please publish with credit
Sources:
$200 Billion Broadband Scandal: Verizon, SBC, Qwest, BellSouth by Bruce Kushnick
www.speedmatters.org