A Broadband Agenda that creates a rural broadband ghetto?

Brookings recently posted Blair Levin’s A broadband agenda for the (eventual) infrastructure bill. He highlights a number of key strategies:

  • Provide more dedicated funding to broadband.
  • Clarify the definition of what constitutes acceptable broadband for rural areas.
  • Clarify geographic eligibility.
  • Prioritize funds for capital expenditures.
  • Eliminate barriers to co-ops.
  • Require new technologies to meet market metrics before eligibility.
  • Preempt laws that prohibit local communities from addressing local digital divides.

Many of those strategies seem like a clear cut way to support expanding broadband but I take umbrage with one – Clarify the definition of what constitutes acceptable broadband for rural areas.

Here is more of what he says on that topic…

The current law requires the FCC to ensure that rural, high cost areas have service “reasonably comparable” to urban areas, words that lead to varying interpretations. Congress should clarify the definition with a market test. For example, it could state that “reasonably comparable” means a service level equal to what 75 percent of consumers in urban areas use.

This metric will evolve over time, but a standard would ground the target around market activity, not political preferences. It reduces the ability of institutions, like the FCC and Department of Agriculture, to favor funding for projects that protect their prior investment decisions rather than deploy capital more effectively. My experience in government suggests that an institutional “confirmation bias” is a material risk.

It seems that we are creating a technology second class status when we decide that rural areas and rural residents don’t require or deserve the same broadband as their urban and suburban counterparts. I don’t know why rural residents should be urged to be satisfied with less. It seems to me that rural residents have greater need to access educational opportunities, remote healthcare and economic opportunities. In St Paul I have several hospitals within 5 miles of my house – that’s not true in most rural areas. In St Paul, my kids could walk to school even on a snow day. Schools aren’t always walking distance in rural areas.

The population density inherent in rural areas creates opportunities. Broadband can level that playing field in rural areas by bringing customers from all over the world to your front door and conversely bring the world of products, training and services to your front door.

I understand that the goal of the strategy is to encourage providers/communities to move away from legacy infrastructure but I think we can do that by recognizing that we need one definition for broadband for rural, urban and suburban areas.

Survey shows that digital technology can help rural businesses

The U.S. Chamber Technology Engagement Center (commissioned by Amazon) recently did a survey of 5,300 small business owners in rural America about the economic impact of online tools and technology on their businesses. Below are the highlights of the report…

Digital technology boosts sales and reduces costs for rural small businesses: Online tools and technology help rural small businesses expand their customer base in their own community, neighboring states, and, in some cases, outside of the country as well. Online tools boost sales for nearly 55% of rural small businesses across America. In addition, online tools reduce purchasing costs of products and materials for nearly 29% of rural small businesses.

Small businesses in rural areas are slowly adopting digital tools and technology: Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online. A slightly larger share of rural small businesses, 22%, purchased at least 80% of their goods and services online.

Rural small businesses utilize digital tools and technology for sales, marketing, and operations: About one-third of rural small businesses sell their products and services through their own websites and nearly 13% sell their products and services through third-party websites. Over 58% of rural small businesses have social media accounts and nearly 36% use online advertising services. Rural small businesses also use online tools for operational tasks such as business banking, accounting, virtual meetings and conference calls, and cloud computing.
Greater use of digital tools and technology could unlock potential in rural small businesses across the country.

Digital technology created opportunities for rural small businesses in the past three years: Digital tools and technology boosted gross sales of rural small businesses by 17.2% during the past three years, the equivalent of $69.8 billion per year. The additional gross sales contributed $38.7 billion to U.S. GDP per year and created 296,288 jobs (full-time equivalent) with $12.1 billion in wages per year. The magnitude of the economic benefits is equivalent to the size of the economy of Vermont or Wyoming.

The economic benefits of digital technologies have not been fully realized in rural areas: If rural small businesses had better adopted online tools and technology, their gross sales would have increased by an additional 18.3% in the past three years, the equivalent of $74.4 billion per year. Consequently, rural small businesses would have added another $41.3 billion to U.S. GDP per year and created an additional 316,605 jobs with $13.0 billion wages per year. These unrealized economic benefits are equivalent to 0.2% of GDP and over 5% of the number of unemployed people in the U.S. labor force.

With greater adoption of digital tools and technology, the potential economic benefits in rural areas are far reaching: If rural small businesses better adopt online tools and technology, their gross sales could increase by an additional 20.8% during the next three years, the equivalent of $84.5 billion per year. This increase in sales could contribute an additional $46.9 billion value added to U.S. GDP per year and create 360,054 jobs with $14.8 billion wages per year. By unlocking the digital potential of rural small businesses, the U.S. GDP would gain an additional 0.2% per year and reduce the number of unemployed people by nearly 6%.

MN Farm Bureau and Farmers Union priorities include broadband

AgriNews reports on agricultural issues at the Legislature…

The state’s Farm Bureau and Farmers Union priorities provide a blueprint that would benefit rural communities. Creating an environment that encourages more readily available and affordable health care is hugely important. It involves motivating more institutions, doctors and other health care professionals to set up shop in underserved rural areas.

Programs to better protect Minnesota’s invaluable natural resources is another area where a consensus for action seems apparent. Protecting water resources and conserving top soil are keys to maintaining a sustainable future.

Improving broadband access to rural communities is another. Increasing broadband access would help motivate businesses and families to live and work in rural communities and improve educational opportunities.

There is broad agreement on the need to reform property taxes to produce greater fairness for farmers.

How Technology Can Balance Urban/Rural Development

There was a panel at SXSW (South by Southwest) on – How Technology Can Balance Urban/Rural Development. The panelists spoke from an international perspective but there were some lessons that we could learn in Minnesota. And I think there’s something they could learn from us.

The talked about two ways to fix the rural broadband issue…

The most obvious lines of thinking are that there are perhaps two main ways to solve this: influencing market forces in a way that incentivizes private companies to build more rural broadband infrastructure; or creating a government-owned high-speed Internet network.

That is where I think the “Minnesota model” of encouraging public-private partnership with state grants could be a big boost to many areas.

They noted some other tactics, such as digital inclusion. I think most of Minnesota is beyond needing to learn why to use technology but the how can still be a barrier. Whether that’s how to use email or how to run an online business.

They talked about extending smart city ideas to the village…

This work must now be translated to what the panelists called “smart village” technologies. So whereas the parks department in San Francisco can — and is — use sensors to tell when garbage cans in their parks are too full, farmers in Modesto, Calif., can similarly use sensors to tell if their pigs are getting sick.

And one very practical idea is to ask new developers about their plans for broadband…

Schweiger described one particularly effective means of supporting broadband in her city, which has been offering a questionnaire to property developers asking how they will incorporate broadband infrastructure into their new construction. Schweiger described it as “a behavior nudging mechanism.”

Need better broadband for precision ag – the Minnesota model could help

IN FORM reports on the need for better broadband in rural areas…

Midwestern states, however, rank high in their access to internet service. A U.S. News and World Report ranking in January said Iowa and North Dakota were the top two states for internet access, and South Dakota and Minnesota also made the top 10.

The article talks about some of the technology solutions in play to help reach far corners and details some of the ways government can help extend broadband. Minnestoa came up by names as did the Office of Rural Broadband Act, introduced by Senators Klobuchar and Cramer…

The report suggests some gains can be made in streamlining processes for permitting, using federal property for expansion of commercial services and making federal funds go farther through better collaboration.

In addition to the recommendations made in the report, other federal efforts are underway. U.S. Sens. Kevin Cramer, R-N.D., and Amy Klobuchar, D-Minn., recently introduced the Office of Rural Broadband Act, which would create an office to coordinate with other federal agencies to maintain information on current rural broadband initiatives and programs and to remove barriers to broadband deployment. Sens. John Hoeven, R-N.D., and Ron Wyden, D-Ore., have signed on as original co-sponsors.

Hoeven, who chairs the Senate Agriculture Appropriations Committee, announced the Fiscal Year 2019 Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriation Bill, which Congress approved Feb. 15. It provided $550 million for a rural broadband loan and grant pilot program targeted to areas that lack access to broadband service.

Efforts also are underway in states. Minnesota Gov. Tim Walz’s spending plan includes money to bring broadband access to rural Minnesota in two years. South Dakota Gov. Kristi Noem announced plans to close the “broadband gap” during her first State of the State Address. In Montana, Senate Bill 239 would exempt property taxes on fiber optics installed by utilities for five years. After that, the tax value would be phased in at 20 percent a year over five years.

Technology and technology skills may offset job loss due to automation

The relationship to broadband access and the following article isn’t direct but it feels like there’s a lot of overlap. A new report from the Brookings Institution indicates that many jobs will be lost to automation. And the Midwest will be pretty hard hit with its history of manufacturing and agriculture BUT Minnesota is an outlier. MinnPost reports…

South Dakota, Iowa, Wisconsin and Indiana all rank in the top 10 states for jobs with high potential for automation, according to the report. Minnesota, however, is a relative outlier. It’s ranked No. 40, which is the lowest in the region. Only Illinois, which was ranked No. 37, came close.

Part of the reason Minnesota is in better standing is the strong healthcare industry.

Technology is a game changer for the impact of automation…

Just because a job is at risk of automation, Greiner said, doesn’t mean it will simply be eliminated. Very few will be, he said. Instead, many jobs will be “augmented” by technology. The Brookings report says machines will often only substitute for certain tasks, rather than  take over every duty in a present-day job.

Here’s an example: The trucking industry has been working on that by experimenting with platooning, a practice in which semi-trucks synchronize their driving with the help of technology in order to follow each other closely on highways and save gas through drafting. Each truck still has a human driver. Minnesota’s Legislature is considering whether to legalize platooning this year.

Using technology to ease some tasks may be a good thing for businesses struggling to find workers as baby boomers retire. Minnesota currently has more than 140,000 open jobs despite an ultra-low 2.8 percent unemployment rate, a fact attributed at least in part to retiring workers.

“I’d say our department and the data tell us we’re probably going to need automation,” Greiner said. “We’re going to need it to supplement our slowing labor force growth.”

The report also says jobs involving greater automation usually, but not always, bring higher wages in part because people need different skills to operate and oversee the technology. Those higher wages, particularly in rural areas, can spark a stronger economy, which in turn can stimulate more jobs, the report says. Greiner said for that reason it’s still possible that states with a higher risk of automation may be better off in the long run compared to Minnesota.

We talk a lot about access to technology here but this is a good example of the importance of digital skills. Digital skills may help Minnesotans automate jobs on their timeline. Digital skills may lead to innovation that surpasses the hole that automation could leave in the economy. It feels like with increasing access to broadband in Minnesota and a little breathing room we might be able to get ahead of some of these changes.

Otter Tail County makes broadband expansion a main focus

Fergus Falls Daily Journal reports…

Leaders in Otter Tail County are putting together their main legislative priorities to bring to the Minnesota Legislature in St. Paul. The Otter Tail County Board of Commissioners outlined funding priorities and announced their legislative priorities.

The priorities set by the commissioners are to expand broadband infrastructure, asking for funding of the Broadband Development Grant Program.

“Everything runs on broadband now,” OTC Board Chair Dough Huebsch said. “It is very important to have fast internet to attract workers and families to OTC. Whether it is working from home, farming or doing homework, it is becoming vital for every household to have a fast internet connection. In the less populated areas of the county it is less appealing, for providers to make the investment in fiber, because of the low number of subscribers. In the past, we subsidized electricity and phone service as necessary needs. Broadband is in that category now and we need to work together to find solutions.”

Broadband expansion along with other economic growth is a main focus for the OTC Board.