Posted by: Ann Treacy | March 20, 2013

Better Broadband Means Better Economy in Rural Areas

Yesterday Telecompetitor mentioned a new report by the National Agricultural & Rural Development Policy Center (NARDeP) Rural Broadband Availability and Adoption: Evidence, Policy Changes and Options. Here’s the info in a nutshell in terms of the connection between broadband and economic vitality:

  • Broadband and economic health are linked in rural areas (potentially in a causal direction):
    • Low levels of adoption, providers, and broadband availability were associated with lower median household income, higher levels of poverty, and decreased numbers of firms and total employment in 2011
    • Increases in broadband adoption between 2008 and 2010 resulted in higher levels of median household income and total employment for non-metro counties
    • Broadband adoption thresholds have more impact on changes in economic health indicators between 2001 and 2010 than do broadband availability thresholds in non-metro counties

And some of the metro-rural differences:

  • The broadband adoption gap between metro and non-metro areas remained at 13 percentage points in both 2003 and 2010; however, this gap increased among low income, low education, and elderly
  • The most rural (non-core) counties experienced significant improvements in broadband adoption between 2008 and 2011
  • Traditional factors – income, education, age, race, and non-metro location – played a role in adopting broadband for both 2003 and 2010; low levels of providers had a negative impact on adoption while higher levels of broadband availability had a positive impact

These findings agree with Jack Geller’s findings on the issue. He often shows using Roger’s Theory of Adoption curve. We’ve seen a broadband adoption increase at a good clip over the last few years – and the remaining non-adopters are laggards. They have lower incomes, lower levels of education, they are older, minorities in rural areas.

adoption curve

Jack also points out that in some ways this is a demographic that will take care of itself, the older demographic more quickly than the young. I think the NARDeP research might indicate that it’s worth the effort and investment to reach out to these folks – especially if the increases in household income and employment seen from 2008-2010 could transfer to these laggards as well. The most difficult thing will be convincing the non-adopters. As the research indicates…

When asked their primary reason for not using broadband 40% of rural residents in 2003 said they didn’t need it. By 2010 that number had climbed to 47%.

The NARDeP also makes some policy recommendations…

  • Draw broadband infrastructure to less economically robust regions lacking it (via programs such as the FCC’s Connect America Fund)
  • Focus adoption programs on populations with lower levels of income and education as well as racial/ethnic minorities; involving community anchor institutions is particularly important
  • Build on diffusion factors such as trialability, observability, compatability to expose nonadopters to the technology
  • Though wireless deployment is helpful, many of the productivity gains and economic advantages of broadband are limited through this technology
  • Support improved data gathering related to price / affordability (including bundles) and service quality (speed)

Could turn out to be some good advice for Minnesota Legislators as they think about the Office of Broadband Development.

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