BusinessWeek looks at rural broadband issues

It has been widely assumed that extending high-speed Internet access to rural communities would improve their economic opportunities. Shane Greenstein, an economist who specializes in telecommunications at Northwestern University's Kellogg School of Management, supports such efforts but says broadband advocates are overselling the possible economic impact. "Broadband wouldn't have the same proportional effect in a rural area as in a suburb or city," Greenstein told Arik Hesseldahl of BusinessWeek. "This is what an economist would call an upwardly biased estimate."

Some observers criticize Connected Nation, a leading advocate for rural broadand, for using tax dollars money to spread broadband and make money for Internet providers. "Public Knowledge, a Washington-based consumer rights group specializing in technology, alleges that Connected Nation's eCommunity teams are little more than sales forces for broadband providers," writes Hesseldahl. Bryan Mefford, the 35-year-old Kentucky native who runs Connected Nation, said all grants it gets are competitively sought, Public Knowledge generated its own data, and its estimates are below others who claim greater potential economic gains from broadband. "We're not just pulling this data out of the air," Mefford told Busienss Week. "We've done surveys of people in these states with large sample sizes of more than 10,000 people. Our assumptions are informed by these detailed surveys."

Connected Nation emerged from Connect Kentucky, which successfully expanded broadband service to 95 percent of the state by 2007 from 60 percent in 2004. As mentioned in a previous post, Connect Kentucky's role was to demonstrate demand for high-speed Internet in rural communities to providers of that service. Connected Nation is looking to accomplish the same feat on a national scale.

"The lack of fast Web access is helping create a country of broadband haves and have-nots," Hesseldahl writes. That "not only makes it harder for businesses to get work done, but also impedes workers' efforts to find jobs, puts students at a disadvantage, and generally leaves a wide swath of the country less connected to the growing storehouse of information on the Web — from health sites to news magazines to up-to-date information on presidential candidates." (Read more)