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Proposal: High Speed Broadband Access is the Most Important Policy Challenge Facing Rural America

Every morning, you check your smartphone, turn on cable news, send a few work emails, FaceTime a friend - all before you brush your teeth.  But this is not the case for the 19 million rural Americans without high speed internet.  Broadband internet access is critical for providing educational opportunities to students, connecting businesses with their customers and suppliers, and providing health care.  For people with broadband connections, the world is literally at their fingertips; for those without, it's lightyears away.  We must improve broadband access and quality to support equal opportunities for rural Americans.

The Issue

Problem Defined

Approximately 19 million rural households do not have broadband access.  Money is a barrier to providing broadband to rural homes and businesses, but billions are available in the Connect America Fund (CAF).  CAF is part of the Universal Service Fund and was established to ensure that companies provide broadband to rural locations.  However, the way the CAF rules are written makes it difficult for small public and private broadband providers to access those funds, and there are few safeguards to ensure that funds are used to serve rural areas.  The large companies that control most of the nation's broadband access have little accountability for rural investing and no financial incentive to serve rural communities.  By allowing greater access to CAF money for smaller rural broadband providers, and by insisting on greater accountability for all who receive CAF dollars, we can increase broadband access in rural America.  

Background
Expand all bullets
1.
31 percent of rural households lack access to broadband internet.MORE

This equates to approximately 19 million households and countless businesses. Slow or unreliable connections make it difficult to complete tasks or perform in jobs. Towns with sub-par connectivity also are challenged when it comes to providing tech-dependent jobs and tech-savvy talent that are needed to grow local economies. Tasks that many urban consumers take for granted – from online banking to shopping on Amazon – are cumbersome at best, and impossible at worst.

2.
The Universal Service Fund was created to serve rural places. MORE

Created as part of the Telecommunications Act of 1996, its mandate is to: 

  • Promote the availability of quality services at just, reasonable and affordable rates for all consumers
  • Increase nationwide access to advanced telecommunications services 
  • Advance the availability of such services to all consumers- including those in low income, rural, insular, and high cost areas- at rates that are reasonably comparable to those charged in urban areas
  • Increase access to telecommunications and advanced services in schools, libraries and rural health care facilities
  • Provide equitable and non-discriminatory contributions from all providers of telecommunications services to the fund supporting universal service programs— Federal Communications Commission, Universal Service Fund
3.
Current rules favor large companies with no incentive to serve ruralMORE

The Connect America Fund has allocated more than $1.6 billion to 10 carriers. The FCC allows larger carriers (called price cap carriers) to receive “model-based support” that is targeted to price cap areas that are high-cost, but not extremely high-cost. Areas can be determined ineligible because the average cost is above the “extremely high-cost” threshold or for other reasons. Many carriers simply choose not to accept the Connect America Fund’s offer of support because they are not interested in the model. The FCC does not make Connect America Fund dollars available to smaller carriers (called rate-of-return carriers).  This map shows areas eligible for financial support through the Connect America Fund.

4.
The FCC relies on flawed data to determine how well companies are serving rural places.MORE

According to the Center for Rural Affairs, broadband providers are required to file Form 477 twice yearly, which provides a summary of the areas they serve, defined by census blocks. However, providers can count a census block as “served” if they offer service to only a single household within that block – which may include between 600 and 3,000 people. Or, providers can state that the census block cannot be served without “an extraordinary commitment of resources” – a term that has no formal definition.  The result is a significant overestimation of rural broadband connectivity

5.
Small, local co-ops, and municipal and nonprofit carriers can serve rural communities well. MORE

report from BroadbandNow.com lists 10 small towns with fast and reliable connections, noting that “All of these best-connected small towns have one thing in common: the cutting-edge connection speeds and reasonable prices are delivered by small-to-medium sized ISPs. Clearly, small business and healthy competition alongside municipal broadband initiatives can create big rewards for both businesses and consumers."

6.
FCC claims of service do not align with customers' experiencesMORE

publication in The Daily Yonder describes the discrepancy between the FCC's reported service speed and users' experience of service speed.  For example, although the FCC reported an availability of at least 25 MBPS in many small towns throughout Kansas and Maine, on the ground data showed median speeds below 10 MBPS.

7.
Broadband access today can be compared to electrification in the 1930's-1940'sMORE

Just like electricity in the United States, broadband is no longer a luxury; it is essential.  The Rural Electrification Act of 1936 created an infrastructure of local power co-ops that supplied electricity to rural America - the areas where larger utilities companies did not want to invest.  As a result, today there are 900 electric co-ops serving rural communities, and 100 are successfully providing these communities with broadband access.  State laws often restrict electric co-ops from offering internet services.  If all electric co-ops were supported in providing broadband to their service areas, this would significantly increase the number of rural residents with internet connectivity.  More information can be found on the National Rural Electric Cooperative Association website.

Sources
1.
Map to Prosperity

Johnathan Hladik - (October 1, 2018)

https://www.cfra.org/publications/MapToProsperity

This publication describes the importance of broadband connectivity in revitalizing the rural economy.  The article also explores the current geographic distribution of broadband access, factors limiting rural access and adoption, and funding and technical assistance strategies for increasing access.

3.
Broadband׳s contribution to economic growth in rural areas: Moving towards a causal relationship

Brian Whitacre, Roberto Gallardo, Sharon Strover - Telecommunications Policy (December 1, 2014)

https://www.sciencedirect.com/science/article/pii/S0308596114000949

This journal article assesses the relationship between broadband usage and economic growth in non-metropolitan counties.  Findings suggest that adoption, availability, and speed of broadband are important factors in rural economic prosperity, with implications for policy development.

4.
The FCC says all of Iowa has access to broadband internet. Speed tests tell a different story.

Sam Bloch - The New Food Economy (June 20, 2018)

https://newfoodeconomy.org/rural-iowa-broadband-data-fcc/

The FCC reports that all of Iowa has access to broadband internet.  However, studies show that in rural counties especially, download speeds are much lower than the FCC's standard of 25 MBPS.

5.
Broadband Speed: FCC Map vs. Experience on the Ground

Brian Whitacre, Sharon Strover, Colin Rhinesmith - The Daily Yonder (July 25, 2018)

https://www.dailyyonder.com/broadband-speed-fcc-map-vs-experience-ground/2018/07/25/26583/

This publication critiques FCC's data collection processes by gathering on-the-ground data about service speed.  The article uses Measurement Lab speed test data, and results depict serious discrepancies between FCC's report of rural broadband availability and actual experiences.

6.
15 Ways Broadband Improves Our Rural Community

YK Communications - YK Communications website (May 13, 2016)

http://www.ykc.com/15-ways-broadband-improves-rural-communities/

This article describes why broadband is essential for rural development.  Broadband boosts economic growth, increases opportunities for educational attainment and health care services, and fosters community development. 

7.
Broadband's contribution to economic growth in rural areas: Moving towards a causal relationship

Brian Whitacre, Roberto Gallardo, Sharon Strover - Telecommunications Policy (December 1, 2014)

https://www.sciencedirect.com/science/article/abs/pii/S0308596114000949

This research report describes the factors contributing to broadband availability and adoption, as well as the importance of broadband connectivity for economic growth in rural areas.

8.
2019-2020 Legislative Goals

North Carolina Association of County Commissioners - (January 1, 2019)

http://www.ncacc.org/734/2019-2020-Legislative-Goals

This NCACC webpage outlines 2019-2020 policy goals for North Carolina.  Increasing broadband access for underserved areas of the state is listed as a top priority goal.

Go deeper
1.
Report: Rural Broadband Availability is Vastly Overestimated Thanks to Flawed FCC Data

Joan Engebretson - Telecompetitor (October 9, 2018)

https://www.telecompetitor.com/report-rural-broadband-availability-is-vastly-underestimated-thanks-to-flawed-fcc-data/

This article reports information from the Center for Rural Affairs' "Map to Prosperity" and emphasizes that rural broadband access is overestimated.  The article focuses on the reason behind FCC's overestimation and ways of improving data collection methods that accurately reflect broadband availability in rural America.

2.
Connect America Fund Phase II FAQS

Federal Communications Commission - (November 1, 2017)

https://www.fcc.gov/consumers/guides/connect-america-fund-phase-ii-faqs

This article describes the FCC's Connect America Fund, a six-year plan that subsidizes local telephone companies in building and improving networks that provide voice and broadband connectivity to rural America.

3.
Connect America Phase II - Final Eligible Areas Map

Wireline Competition - (June 10, 2015)

https://www.fcc.gov/reports-research/maps/connect-america-phase-ii-final-eligible-areas-map/

This resource includes a map that identifies areas of the United States that are eligible for support through Phase II of the Connect America Fund.  The map provides the cost per location, as calculated by the Connect America Cost Model, as well as county and state-specific information.  

4.
10 Small Towns with Blazing Fast Internet

Nick Reese - BroadbandNow (December 3, 2015)

https://broadbandnow.com/report/10-small-towns-with-blazing-fast-internet/

This article describes efficient internet connectivity and its economic benefits for 10 rural towns.  For each town, the article provides the speed of the internet connection, the service carrier, and approximate cost of broadband plans.

5.
Measuring Impact of Broadband in 5 Rural MN Communities

Blandin Foundation, Treacey Information Services, and Community Technology Advisors - (January 1, 2018)

https://blandinfoundation.org/learn/research-rural/broadband-resources/broadband-initiative/measuring-impact-broadband-5-rural-mn-communities/

This resource provides case studies evaluating broadband service in 5 rural Minnesota counties.  Each case study describes the current status of each community in relation to broadband, community investment in high-speed internet connectivity, economic impact of broadband access, and future goals for increasing access.

6.
Impact of CAF II-funded Networks

Blandin Foundation, Bill Coleman of Community Technology Advisors - (June 1, 2018)

https://blandinfoundation.org/content/uploads/Impact-of-CAF-II-funded-Networks_WEB.pdf

This Blandin Foundation report examines CAF II-funded broadband networks in the Lindstrom and Braham exchanges in rural Minnesota.  The report investigates the installation and impact of these broadband networks, including potential challenges and solutions, in order to provide comprehensive data to local and state leaders.

8.
Broadband Internet's Value for Rural America

Peter Stenberg, Mitchell Morehart, Stephen Vogel, John Cromartie, Vince Breneman, and Dennis Brown - USDA Economic Research Service (August 1, 2009)

https://ageconsearch.umn.edu/record/55944/files/err78.pdf

This research report presents factors associated with rural broadband use, as well as the positive impact of broadband on rural America.  These benefits include improved social vitality, health care options, education opportunities, and economic growth.

9.
Estimation of the Net Benefits of Indiana Statewide Adoption of Rural Broadband

Alison Grant, Wallace E. Tyner, Larry DeBoer - Research & Policy INsights (August 1, 2018)

https://www.pcrd.purdue.edu/files/media/006-RPINsights-Indiana-Broadband-Study.pdf

This report assesses the statewide benefits of installing rural broadband throughout Indiana.  Improvements in telemedicine, education, business development, investments, farm industry, civic engagement, and property values lead to significant financial savings for the entire state. 

10.
The Struggle for Broadband in Rural America

Lori A. Dickes, R. David Lamie, Brian E. Whitacre - Choices: The Magazine of Food, Farm, and Resource Issues (January 1, 2010)

https://pdfs.semanticscholar.org/f3e9/83aab649bc00944f5f5c97adafa5cd075b47.pdf

This publication describes the digital divide between rural and urban broadband connectivity.  This resource also explores the positive impact of broadband on rural development, including economic growth, increased community interactions and civic engagement, and improved access to education and health care.

Authors

Allen Smart is a national spokesperson and advocate for improving rural philanthropic practice under his group –PhilanthropywoRx. He is also currently the Project Director for a national rural philanthropic project based at Campbell University in Buies Creek, North Carolina. He regularly consults with regional and national foundations on rural and philanthropic strategy.

Betsey Russell has written and provided communications consultation for and about philanthropy for nearly three decades. She has worked with a number of local, regional and national grantmakers on a range of topics, including rural funding and racial equity. She has been a lead communications consultant and writer for the Southeastern Council of Foundations for 27 years.



Elizabeth Russell
President - Word Play LLC
Betsey Russell has written and provided communications consultation for and about philanthropy for nearly three decades. She has worked with a number of local, regional and national grantmakers on a range of topics, including rural funding and racial equity. She has been a lead communications consultant and writer for the Southeastern Council of Foundations for 27 years. Her specialties include helping foundations and nonprofit organizations develop communications plans, understand the nuances of communicating with differing target audience groups, and creating language that is both relevant and resonant. She is an expert at understanding complex information from foundation grantmaking strategies and programs and distilling that into engaging, exciting print and web-based communications for broader audiences. n 1996 Betsey created WordOne, the first business in the Southeast devoted exclusively to developing strategic marketing communications for nonprofits and charitable foundations. In 2005, Betsey sold WordOne to Mansell Group, an Atlanta-based online marketing firm. After remaining with the firm for two years, she returned to a full-time freelance practice in 2007. She is now based in Asheville, North Carolina. She is a graduate of Davidson College in Davidson, NC.
Allen Smart
Principal - PhilanthropywoRx
Allen Smart has spent over 25 years as a grantmaker with the City of Santa Monica, California, the Rapides Foundation in Louisiana and the Kate B. Reynolds Charitable Trust in North Carolina. He is a frequent contributor to writings on philanthropic strategy and consults with foundations around the country on rural issues. Allen is very active in national funder groups, as well as being one of the founders of the annual White House public/private rural partnership meeting.

Since 2017, he has led a project at Campbell University, partially funded by the Robert Wood Johnson Foundation, that is taking a look at effective rural philanthropic practice around the country.

Allen earned his BA from Macalester College, MA in Communications from University of Michigan, and MPH in Community Health from University of Illinois at Chicago.

The Solution

Proposed Actions
Expand all bullets
1.
Rewrite FCC rules to provide small, local carriers with greater access to the Connect America Fund. MORE

In the second round of CAF funding (CAF II), larger “price cap carriers” had first right of refusal to accept funds to deploy services in rural areas. Smaller “rate-of-return carriers” were not allowed to apply for CAF II distributions until larger funders had accepted funding. Other carriers were then allowed to bid on remaining underserved areas. As CAF II nears the end of its six-year program in 2020, the FCC has an opportunity to level the playing field for smaller carriers for the next round of funding.

2.
Require broadband service delivery reporting at the street address or parcel level. MORE

Companies can currently claim to “serve” an entire census block if only one household has a broadband connection. Requiring more stringent reporting will prevent companies from claiming to serve a full census block while actually providing connections to only a small percentage of homes and businesses within those blocks. In addition, more detailed data can provide better information about who is connected and who is not – giving insight into ways to connect specific populations, neighborhoods, etc.

3.
Clarify new tax codes MORE

Clarifying new tax codes in the “Tax Cuts and Jobs Act” of 2017 would allow rural cooperatives to receive Connect America Funds for broadband expansion without threatening their tax-exempt status.  In particular, it is critical to amend the tax act so that funds from government or civic groups are excluded from gross income and therefore exempted from taxes.

4.
Provide access to mobile 5G networksMORE

A potential solution to the urban-rural digital divide is the improvement of mobile networks in rural America.  Mobile carriers claim to provide coverage to rural America, but as this article shows, these claims are often inaccurate.  A team of researchers from Old Dominion University and the University of South Dakota produced a report that investigates the impact of mobile networks in rural South Dakota and explores the benefits of adequate mobile coverage for the economy, health care, education, and community development.  The report explains that for a lower cost, the installation of 5G networks can provide rural residents with internet connectivity that is equal to fixed broadband in terms of capacity and speed.  

5.
Encouraging local co-ops to provide broadband accessMORE

In January 2019, the Mississippi Legislature passed a bill allowing 25 electric co-ops to provide broadband access to rural residents.  This is a promising step that could bring internet and associated benefits to the Mississippi Delta.

Expected Results
Expand all bullets
1.
Greater access to Connect America Fund for small broadband providersMORE

Supporting local and community-based telecommunications companies has the potential to reduce the number of rural households without broadband access by 50%.  A recent report from the Rural Broadband Association reveals that rural rate-of-return providers have significantly increased fiber deployment in homes and increased available broadband speeds for rural communities.  Providing easier access to the Connect America Fund dollars will ensure that these local providers can overcome financial barriers and continue making important strides in broadband access for the rural communities they serve.  

2.
Greater accountability for reach and depth of broadband services offeredMORE

When carriers say that they are serving a particular census tract, there must be agreement from people living in the tract that they are, in fact, being served.  The carriers' claims of service reach and quality also must match the customers' experiences.  This will encourage the FCC to provide a more accurate and detailed report of the landscape of rural broadband access.  More accurate information will guide more effective policy decisions for allocating the Connect American Fund dollars to serving rural areas in need. 

3.
Increased broadband access will boost the rural economyMORE

Research demonstrates that broadband internet is associated with income growth and decreased unemployment in rural areas.  Broadband is critical for integrating rural businesses into the global economy; internet access makes it possible to market to a broader clientele and reach a wider network of suppliers.  For the farm industry, broadband connectivity allows for the use of efficient agricultural tools, such as weather tracking information.  Moreover, rural businesses will have increased access to online software and tools to help operations run smoothly and efficiently.  An article on CNET points out the potential for speedy broadband internet to attract young creative workers to rural areas, which would support development across all sectors of the rural economy.  Ultimately, increased access to high speed broadband will support stronger rural economies which in turn leads to thriving local communities.  

4.
Students of all ages will have access to education opportunitiesMORE

High speed internet access is critical for getting the most out of any educational curriculum; from accessing exam schedules and supplementary materials, to interaction with peers on virtual discussion forums and submitting papers.  Expanding broadband to rural areas will afford students increased access to learning material.  Rural, remotely-located students can overcome transportation challenges by completing college and graduate degrees online, without having to be physically present in a classroom.

5.
Rural residents will have increased access to quality, affordable health careMORE

For those living in metropolitan areas, it is convenient to visit a local doctor, and even make appointments through online portals and smartphone apps.  For many rural Americans, accessing health care services means inconvenient and costly trips over long distances.  This difficulty is only compounded for rural residents who are elderly, need urgent medical attention, or live with a chronic illness.  Telemedicine allows for rural Americans to circumvent the challenge of distance and remote living through virtual appointments with specialists and access to health information and other medical services.  However, telehealth appointments are only possible with speedy internet connectivity.  

6.
Increased broadband access will foster social interactions and civic engagementMORE

Studies demonstrate that high speed internet access increases social connections for rural communities.  Individuals living in rural and remote areas will be able to maintain connections with friends and family living far away, through e-mail and social media.  Rural residents will be able to more readily access information about community organizations, local events, and social activities.  With easier access to government information and services, civic and community involvement increases.  Overall, broadband internet access relieves social isolation, improves social wellbeing, and boosts community vitality for rural America.

Budget

This is a revenue neutral proposal. The goal is to make existing funds more available to a wider range of rural broadband providers.

The Conversation

8 months ago
A common question in my neck of the woods is "Why does broadband service stop just short of my property?" 25% of folks in my county in East Tennessee do not have access to quality broadband, and that number jumps to 65% in the neighboring county. Basically, we're talking about local students, businesses, farmers, entrepreneurs operating with one hand tied behind their backs--broadband is now an essential utility for every American. Lack of connection means a lack of social, economic, cultural, and civic opportunities.The Connect America Fund could play a significant role in closing the gap, but it's also important that states with restrictive broadband policies in place (like TN) remove those barriers so smaller and more local broadband providers can a) participate in the marketplace and b) apply for those funds.
8 months ago
If you want rural Americans to agree, don't ask them about sports or politics. Ask them about broadband. Rural families are aware that their ability to raise and educate children, find work, and participate in the nation's economic and civic systems hinges on better broadband access. Smaller internet service providers are usually locked out of Connect America Fund support. The large corporations that get the bulk of the funding are not locally accountable to consumers. Finding ways for small and local IPSs to get support from the Connect America Fund would create a different structure, where smaller, more local broadband providers would know their service areas personally and reach a different standard for service.

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