New Study Finds that Rural Broadband Holds Economic Benefits for All

A post by Sarah Reed

More widespread access to broadband service in smaller, rural communities has significant economic benefits for both rural and urban areas, according to a new study from the Hudson Institute entitled The Economic Impact of Rural Broadband.

The report finds that economic benefits are dispersed more heavily towards urban areas, with two-thirds of the $24.2 billion final economic demand generated by rural telecom companies going to urban areas. This is the result of rural areas using consultants and capital goods from urban centers for their capital investment projects. Not only does this economic activity benefit urban areas, but in 2015 “the rural broadband industry supported 69,600 jobs” with 54 percent of them in urban areas.

While the economic benefits may skew toward urban areas, increased availability of broadband provides rural areas with many important quality of life benefits. Residents gain opportunities to participate in personal online activities ranging from social media and video streaming to online shopping and job-related tasks. Residents have access to goods and services not available in their area and have the potential to participate in new forms of communication such as telehealth, which reduces the need to travel to a health care facility by providing new ways to interact with providers. The report emphasizes that as new technology emerges, the necessity for broadband and its economic and personal benefits will continue to grow.

The report also touches on the federal role of broadband expansion. The Federal Communications Commission (FCC) has redefined the Telecommunications Act of 1996 notion of “universal service” from telephone connections to broadband. The FCC offers grants and loans dedicated to expanding the network and works on “financial arrangements intended to make broadband rather than voice telephony the service that should be universally available.”

Rural broadband has economic impacts that reach across urban and rural areas in addition to personal benefits. By demonstrating how the whole economy can benefit from the expansion of broadband, the transition can happen more easily and quickly allowing all Americas access to high-speed internet services.

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