Can Broadband Save Rural America?

The winners of funding in the early rounds of BTOP and BIP awards already have been announced. For example, Buggs Island Telephone Cooperative (Bracey, Va.) has been awarded a $19 million BTOP grant and $5 million match to bring high-speed affordable broadband services to 15 underserved counties and the cities of Emporia and Franklin in south central Virginia. "We welcome broadband in our community because it will create jobs and improve the overall quality of life," said Bill Hodge, executive director of the Emporia-Greensville Chamber of Commerce.

Thanks to the funding made possible by the broadband stimulus program, other rural communities will soon be experiencing the opportunities offered by broadband, as well. Clovis, N.M., for example, expects to benefit from the $11.3 million BTOP grant awarded to ENMR Plateau to light a 1,600-mile ring of fiber throughout the state and to construct 74 miles of new fiber. In Steele, N.D., BEK Communications Cooperative received a $2 million grant and $2 million loan to provide fiber to the premises to underserved homes and anchor institutions in Burleigh County. In Peetz, Colo., the Peetz Cooperative Telephone Co. has received a $1.5 million BIP grant to deploy broadband infrastructure in and around the Peetz community. Dozens of other similar awards have been announced that hold the potential for having a significant near-term impact on rural broadband deployment.

The stakes for rural America are quite high, indeed. In a January 2010 Public Policy Institute of California report analyzing the impact of broadband deployment on economic Graphicdevelopment, Jed Kolko estimated that during the years from 1999 to 2006, an area moving from no broadband providers to one to three providers would achieve overall employment growth of 6.4%. Kolko also estimated growth in the working age population of 2.4% resulting from the introduction of broadband into an area over the same period. Most employment growth would occur in management of companies and enterprises; utilities; professional, scientific and technical services; finance and insurance; and administrative and business support services. Significantly less growth would be expected in public administration; arts; entertainment and recreation; educational services; manufacturing; and retail trade.

Rural telcos know the communities within their service areas extraordinarily well, and have a proven track record of serving their needs. Small, locally owned companies are uniquely situated to facilitate the deployment of broadband to rural areas. Businesses, in particular, tend to appreciate the personal touch that small rural telcos can provide. "Locally owned cooperatives are at the table working with us, and are able to provide quick solutions to any problems we might have," said Clovis Industrial Development Corp.’s Gentry. "We can pick up the phone and talk to the CEO any time, day or night. The bigger the company, the harder it is to get someone on the line."

Up the Road

The migration of U.S. population from rural to nonrural areas is a long-term trend that some claim may threaten the future viability rural America. While broadband provision in and of itself will not be the "magic bullet" that will reverse the erosion of the rural population, it can be an important part of slowing, and potentially reversing, the trends that are working against efforts to make rural communities thrive again.

Rick Schadelbauer is NTCA’s economist. He may be reached at or 703-351-2019.