Supply and demand for broadband in rural areas and what can help make the business case work: Gov Report

Congressional Research Service recently published a report (Demand for Broadband in Rural Areas: Implications for Universal Access) that looks at the challenges of expanding or upgrading broadband in rural areas. The report includes lots of good number and research but at a really high level there are some of their points:

  • Rural areas are expensive to serve (because distance and lower population density make networks expensive) and the cost to deploy may surpass expected return on investment (ROI).
  • Rural areas tend to populations that are older, less educated and earn less money – each characteristic makes them less likely to be broadband (or generally tech) users. So even when there is broadband the adoption rates are lower.
  • Even in areas where the adoption is high and deployment costs are lower (so town centers) the potential for ROI is lower than in an urban setting.

These ideas aren’t new – but they are well documented in the report. The next section of the report looks at what the Federal government is doing to offset these challenges. I’m going to try to outline the options they mention. Most are funds that go to the provider, I’ve tried to note where that’s not the case:

  • Rural Utilities Service Programs
    • the Rural Broadband Access Loan and Loan Guarantee Program
    • Community Connect Grant Program
    • ReConnect Program
  • Universal Service Fund Programs
    • High Cost program (has morphed in the Connect America Fund although this report doesn’t go into that)
    • Lifeline program (funds offset cost to end users)
    • Schools and Libraries program and Rural Health Care program (schools, libraries and healthcare facilities apply directly)

There’s a quick and interesting discussion of FCC’s broadband definition. Key here is using legacy infrastructure to help define future needs. It’s practical but is it like asking your barber if you need a haircut?…

The 25/3 Mbps threshold is meaningful in both technical and policy terms, because the legacy copper-based connections utilized by some broadband providers would likely require significant upgrades in order to meet higher thresholds

The rest of the report looks at what Congress can do moving forward to make best use of resources:

  • Oversight or Legislation Addressing the Lifeline Program
  • Research on How the Costs of Broadband-Enabled Services Affect Rural Broadband Demand
  • Broadband-Focused Education and Outreach Grants
  • Incentivizing Adoption via the Terms of Federal Infrastructure Buildout Programs
  • Oversight of FCC Section 706 Process
This entry was posted in Funding, Policy, Research by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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