The U.S. faces a growing urban-rural broadband gap, even though both rural and urban America stand to gain from greater broadband availability in rural America, says a new report from the Hudson Institute.

“We do have a broadband gap,” said Hanss Kuttner, the Hudson Institute visiting fellow who wrote the report, in a presentation of the report findings in Washington D.C. today hosted by the Hudson Institute and the Foundation for Rural Service. The broadband gap, Kuttner said, threatens the U.S. economy.

According to the report, titled “Broadband for Rural America: Economic Impacts and Economic Opportunities,” nearly 100% of Americans in rural areas have broadband download speeds of 10 Mb/s available to them but in rural areas that number is just over 70%.

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Kuttner attributed the higher availability of broadband in urban areas to higher population densities, which yield lower broadband deployment costs per subscriber. Nationwide the U.S. has a population density of less than 50 people per square mile – a considerably lower number than for some other developed nations, Kuttner said. But the nationwide average only tells part of the story, he said – noting that New Jersey and Rhode Island have an average of 1200 people per square mile, while South Dakota’s population density is 11 people per square mile and in Wyoming the per-mile population density is only five.

Rural areas that lack broadband miss out on potential economic benefits, Kuttner said. For example, his report notes that lower levels of formal education among those who live in rural areas help explain lower average incomes for rural residents in comparison with urban dwellers. While people in the U.S. who have completed college earn an average of $49,648 per year, people with only a high school education earn an average of $28,659 – and the gap between the percent of urban dwellers that have completed college compared to the percentage in rural areas has grown, the report says. That gap was 9.5% in 1990 but has grown to 12.6 % today, the report states.

Rural areas also lag behind urban areas when it comes to health care, the report states. For example, the report notes that rural people over 65 averaged 5.5 doctor visits per year, while those in urban areas averaged 10.9 visits.

Kuttner suggests, however, that this gap could be narrowed through increased use of telemedicine. The report cites an Oklahoma study that found that telemedicine eliminated trips for radiology patients of 30 to 54 miles and saved psychiatry patients between 60 and 116 miles.

Kuttner cautions, however, that 13 out of 44 Oklahoma hospitals responding to a survey had Internet connections of 4 Mbps or less. At today’s event, Kuttner said that reality “calls into question the future of these hospitals.”

Broad benefits
In his report and in today’s presentation, Kuttner argued that better rural broadband availability also would help people who live outside rural areas. For example, he noted that businesses could benefit from what he calls the “middle shore” for information technology work. Properly trained, he said rural residents can offer a middle-ground alternative to high-cost urban workers or low-cost offshore workers – but that option only exists where rural residents have broadband access, enabling them to do certain IT jobs remotely.

In addition rural residents with broadband open up new markets for e-commerce, said Kuttner.

“It’s a lot like signing a free trade agreement,” he said.

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