Economic impact of broadband access debated

Top minds in rural economics and online technology met in Washington, D.C. at the Economic Research Service event to try to determine what effect, if any, broadband Internet access has on developing rural economies. "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," writes Julie Ardery of the Daily Yonder.

The simple answer to the question seems to be nobody knows, partly because of the Federal Communications Commission's faulty data collection and reporting system about broadband access. "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."

A study from the Pew Research Center shows that significant parts of rural America do lack high-speed Internet access. Ardery writes, "In the Pew survey, 24 percent 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."

Many at the meeting felt that regardless of the ambiguity surrounding broadband usage, high-speed Internet access is unlikely to make up for the "rural penalty" that inhibits economic develop,ent in rural areas. Robert Crandall of the Brookings Institution told Ardery, "We want to be very careful about selling broadband to increase overall job growth in the rural economy because there’s very little evidence that increasing broadband access indeed does create jobs."

What is clear at the conclusion of the meeting is that the chicken and the egg question remains unanswered. In the meantime Congress took time out from more pressing obligations to pass The Broadband Data Improvement Act, which should provide more accurate data on the availability of broadband access in rural areas. (Read more)