Monday, August 31, 2009

Stimulus focuses fresh attention on broadband as a key to rural economic development

New stimulus-funded broadband development in rural America may be the key to reversing the exodus of the rural workforce to urban areas. The National Telecommunications and Information Administration and the Rural Utilities Service have received 2,200 applications for the money.

For example, Dale Neal of the Asheville Citizen-Times reports Internet providers, nonprofits and government agencies joined to apply for more than $30 million of the stimulus to improve broadband access in rural western North Carolina, arguing that increased Internet access in North Carolina will help bring jobs to the region.

Indrajit Basu of Government Technology reports that increased broadband access in rural areas has led information-technology firms to build a sustainable model for "rural outscourcing" in the U.S. The recession has led U. S. companies to favor domestic outsourcing because of the lower startup costs compared to sending jobs overseas, Basu writes, and broadband development may curb the trend of people leaving their homes to find work. He quotes Hytry Derrington of Rural America Onshore Sourcing, a Louisville-based IT firm: "People can leave the urban areas and go to the rural areas and build their businesses, provide services, make products and compete worldwide from small communities."

Craig Settles of The Daily Yonder argues that the key to successful broadband development is finding a commercial customer base to sustain the development. Settles writes that any broadband owner will have to "generate enough revenue to cover buildout and operating cost." He argues that to accomplish this goal, broadband developers must market toward county governments, schools and other institutional customers to remain profitable.

Settles cites as an example the Pulaski Electric System of Tennessee, a municipal utility that is building a high-speed, fiber-optic system. (Pulaski Electric photo) Dan Speer, executive director of the Pulaski-Giles County Economic Development Council, told Settles, “The World Wide Wait is over in Pulaski." (Read more)

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