ruralA new report from the American Action Forum questions the economic impact of rural broadband. The report, penned by AAF Director of Technology and Innovation Policy Will Rinehart, draws on an econometric model of FCC data that “suggests that the presence of broadband does little to explain the unemployment rate, median household income, the change in employment or the rate of population change in rural regions.”

Rinehart says broadband adoption measures are “far better at explaining these trends.”

AAF calls itself a “center-right” policy advocate that “provides data-driven insight to today’s defining domestic policy challenges.”

Economic Impact of Rural Broadband
While the report in some ways seems to be splitting hairs – clearly, you can’t have broadband adoption without broadband – it does break some new ground in terms of rural broadband research by looking at rural broadband availability in a granular manner. Using various federal designations, the report – titled “A Look at Rural Broadband Economics,” looks at broadband availability by:

  • Rural Urban Continuum Codes, which divide urban and rural areas into nine different categories. At one end of the continuum are “counties in metro areas of 1 million population or more.” At the other end are “completely rural or less than 2,500 urban population, not adjacent to a metro area.” In between are categories such as “urban population of 20,00 or more, not adjacent to a metro area.”
    The findings along this continuum? “[T]he percentage of the population without broadband access gradually increases, from a low of 2% in large metro counties to a high of 42% in completely rural counties.”
  • Rural Urban Commuting Codes, which use census tracts and categorize areas by how much people commute toward a dense core – an analysis that shows an area’s economic connection. RUCCs divide areas into 10 categories, ranging from “metropolitan area core” to “micropolitan area core” to “small town core” and “rural areas.” As the author explains, micropolitan areas include areas with populations between 10,000 and 50,000 people.
    Metropolitan areas had the smallest percentage of people without broadband available to them (1%), while small towns with low commuting levels had the highest percentage (45%). The analysis shows that “the cores of small towns have about the same access to broadband as the suburbs of metro regions,” the author said.

Percent of Population Without Broadband Access by Rural-Urban Commuting Codes

Rural-Urban Commuting Code Population Without Broadband Access Percent Population Without Broadband Access
Metropolitan area core 2,725,356 1%
Metropolitan area high commuting 5,303,308 17%
Metropolitan area low commuting 813,223 32%
Micropolitan area core 1,085,625 6%
Micropolitan high commuting 2,134,262 29%
Micropolitan low commuting 543,626 37%
Small town core 1,494,225 17%
Small town high commuting 1,041,361 42%
Small town low commuting 501,044 45%
Rural areas 3,491,472 38%

 

  • Rural County Economic Type, which breaks rural areas into six categories based on the dominant employer. Categories include farming, mining, manufacturing, federal/state government, recreation and nonspecialized.
    Not surprisingly, recreational counties had the lowest percentage of people without broadband availability (13%), while farming counties had the highest (21%).

The author makes a point of critiquing broadband proposals in the infrastructure investment plan that President Trump has recommended. Those proposals would target funding to areas with populations of 50,000 or less — and according to the author that means funding would flow toward micropolitan areas, which he sees as less in need of broadband investment in comparison with areas immediately surrounding population cores.

Drawing Conclusions
What should we take away from the AAF report?

The author’s statement that the econometric model shows that “the percentage of the population with access to 25/3 [Mbps] broadband doesn’t explain the unemployment rate, median household income, the change in employment or the rate of population change in rural regions” tells only part of the story.

The author goes on to state that broadband adoption explains economic trends four times better than broadband availability – a finding that would seem to highlight the importance of making broadband not just available but also affordable and of supporting it with broadband adoption programs.

Image courtesy of flickr user Tom Gill.

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