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Rural Broadband Investments Promote an Inclusive Economy – Center For American Progress

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Broadband is essential to economic growth in the 21st century. This became starkly apparent over the past year as the coronavirus pandemic deepened Americans’ reliance on the internet. Families need the internet to access essential services, including education and health care, while small businesses and entrepreneurs need it to improve their operations and reach more customers to bring new economic opportunities to left-behind communities. Though many schools and offices are now starting to reopen, the pandemic has illustrated not only that broadband internet access at home will remain an indispensable utility in the future, but also that it’s an equity issue.

Between 6 percent and 12 percent of Americans do not have high-speed internet service, either because of a lack of infrastructure access or an inability to afford the service. Rural communities, low-income people, and communities of color experience the highest barriers to broadband access—and many found themselves unable to access key services online during COVID-19. Those same groups experienced the brunt of the pain from the pandemic and resulting economic recession, including disparities in COVID-19 deaths, dramatic job loss and financial insecurity, and a higher risk of infection caused in part by occupational segregation into low-paid and high-risk front-line roles as well as other manifestations of structural racism and marginalization built into the economy. For people of color in rural communities, racial and geographic disparities compound one another. In majority-white rural counties, about 72 percent of the population has broadband available; for majority-African American rural counties and majority-Native American rural counties, it’s 56 percent and a staggering 27 percent, respectively. People of color in both rural and urban areas are less likely to have access to high-speed internet due to residential segregation caused in part by racist zoning and investment practices paired with a monopolistic market, where internet companies choose not to build or extend affordable, high-quality services without a higher profit margin.

This column focuses on these disparities between rural and urban areas during the pandemic, what they mean for rural Americans’ access to services that meet their basic needs, and why broadband is a part of the country’s essential infrastructure. Using data from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED), the column finds:

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  • Rural residents* are almost twice as likely as urban ones to lack high-speed internet at home, at 19.69 percent compared with 10.23 percent.
  • 31.62 percent of workers in urban areas reported working from home full time in the previous week due to the pandemic, compared with just 13.61 percent of rural workers.
  • Rural students were twice as likely as urban students to report lacking adequate technology to complete their coursework during the pandemic, at 11.45 percent and 5.74 percent.
  • Low-income families and communities of color are less likely than white, affluent households to have broadband at home.

A path forward for broadband investment

President Joe Biden’s infrastructure plan aims to jump-start the economy by making historic investments in infrastructure—including broadband. Of Biden’s originally proposed American Jobs Plan, $100 billion of the more than $2 trillion would go to broadband infrastructure build-out and monthly subscription subsidies to assist low-income individuals with affordability. The plan also includes set-asides for tribal communities and preference for broadband networks owned or operated by, or affiliated with, local governments, nonprofits, and cooperatives. To ensure that broadband investments go where they are most needed, the Biden administration recently released a map that combines private and public data to illustrate gaps in broadband coverage. Ultimately, however, congressional negotiations will determine the total investment in broadband, including where these investments are targeted geographically.

Regardless of its final size, any infrastructure package must include significant investments in broadband. The provisions must be guided by the goal to ensure equity for low-income communities and communities of color and to close access gaps between rural and urban residents. To realize this aim, investments must span both rural and urban contexts and address affordability in addition to availability.

Internet access gaps during the pandemic

There has been some progress in shrinking the gap between rural and suburban broadband adoption—a decrease in the gap from 16 percent to 7 percent in the last two years, according to Pew Research Center. However, tens of millions of Americans still lack access to this essential utility, and major differences across race, income, and region raise equity concerns. 2020 data from the Federal Reserve’s SHED capture how this broadband access gap played out during the coronavirus pandemic. According to the authors’ analysis of these data, rural households were almost twice as likely as urban ones to lack broadband internet, at 19.69 percent versus 10.23 percent.

Figure 1

The SHED data show concerning inequities in online learning due to a lack of high-speed internet access in rural areas. While 82.62 percent of respondents in metropolitan areas reported that their children had sufficient internet access to complete their virtual coursework, this was true for only 76.15 percent of people in rural areas. Similarly, 11.45 percent of people in rural areas disagreed with the statement that their children had adequate internet to complete their coursework, compared with 5.74 percent of people living in metropolitan areas.

Figure 2

The 2020 SHED data also found that people in metropolitan areas were more than twice as likely as people in rural areas to be working remotely full time during the pandemic.

Figure 3

Affordability is another major barrier to families in need of broadband access. More than one-fifth of all families with an annual income below $25,000 lack broadband at home. To bridge this gap, the Federal Communications Commission offers low-income families a subsidy through the Lifeline program, which the Emergency Broadband Benefit program expanded in response to the COVID-19 pandemic. Such programs, paired with robust outreach and comprehensive implementation, will continue to be necessary in the coming years in order to achieve universal broadband access.

Figure 4

Why broadband is infrastructure

Though experts cannot predict the degree to which the shift from in-person to online services is permanent, broadband internet will be essential to participate in society moving forward. Online offerings have the potential to expand access to remote or virtual services that are difficult to find in rural communities, such as mental health care, access to and enrollment in public benefit programs, and banking, but those benefits are impossible to gain without reliable broadband service. The following are just five areas in which rural communities would benefit from strong federal investments in broadband deployment and adoption:

  1. Education: As education across grade levels dramatically shifted to virtual learning at the onset of the pandemic, computer and high-speed internet access became more important than ever. One in 5 parents nationwide reported that it was likely their children would be unable to complete schoolwork because they lacked access to a computer at home, while 1 in 3 parents with lower incomes reported needing public Wi-Fi because they lacked reliable internet service at home. Among Black, Latino, and American Indian/Alaska Native families, only 1 in 3 households reported having sufficient high-speed internet access at home to support online learning. Limited access to technology during the pandemic exacerbated the existing “homework gap” between students with internet and those without. These disparities have repercussions for learning and opportunity that will endure beyond the pandemic and will only worsen without investments in reliable broadband for all students.
  2. Public benefits: Applications, enrollment in, and the administration of Supplemental Nutrition Assistance Program (SNAP) benefits, unemployment insurance, Supplemental Security Income, and other benefits went solely virtual during the pandemic for the sake of safety and efficiency—excluding those without internet access. Many public offices—all Social Security Administration locations, for example—were closed, as were public libraries and case management services that might usually provide internet access. Increased outreach to vulnerable populations through tools such as online portals and educational webpages does not extend to those with unreliable or nonexistent internet access. While internet access is not a silver bullet, and availability of in-person resources and mail and phone services remains vital, more equitable access can help those using public benefits.
  3. Health care: Broadband access is also a public health issue, particularly for rural communities, where doctor’s offices and hospitals may be an hour’s drive away or farther. From April 2019 to April 2020, national privately insured telehealth claims rose by more than 8,000 percent. While those rates have likely tapered as some offices have reopened, uptake of telehealth services will likely continue to be higher than it was prior to the pandemic, especially if proposed changes to make pandemic-era Medicare telehealth flexibility permanent are enacted. However, the rural and vulnerable populations that would be best served by accessible telehealth services are also the least likely to have reliable broadband access.
  4. Telework: In June 2020, 67 percent of workers in nonmetropolitan areas—particularly workers of color and low-wage workers—were unable to telework. Though some could not perform their jobs virtually, others simply lacked the technology to work from home. Reliable broadband presents a wide range of opportunities for economic growth in rural communities. Attracting workers with remote jobs has spillover effects that can create other jobs in the area. However, in one October 2020 survey, more than one-third of respondents cited unreliable or limited internet access as a barrier to moving to a rural area. Moreover, enabling current rural residents to telework broadens the number of employment opportunities to include remote jobs of all kinds, such as customer service and data entry roles.
  5. Online banking: Online account access for banked households is a crucial service that more than one-fifth of families rely on each year. Meanwhile, approximately 4 percent of U.S. households in 2019 were “unbanked,” meaning they had no checking or savings account; in 2017, 18.7 percent of households were “underbanked,” relying on alternative financial services as well as a bank account. These households, which are more likely to be poor and families of color, typically use alternative banking services, such as payday lending and check cashing or mobile banking services. For unbanked and underbanked people, online banking and bill pay services can be an important alternative to these exploitative options.

Conclusion

High-speed internet is a necessity, but rural Americans, particularly poor people and people of color, often lack access to this important utility. This challenge requires investment on a historic scale. Congress must take bold steps to close the urban-rural broadband gap and center equity in its plan to expand internet access to more families.

Zoe Willingham is a research associate for Economic Policy at the Center for American Progress. Areeba Haider is a research associate for the Poverty to Prosperity Program at the Center.

* Due to limitations of available data, the authors define rural as “nonmetropolitan” and urban as “metropolitan” for the purposes of this column.

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Britain's economy went into recession last year, official figures confirm – The Globe and Mail

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People walk over London Bridge, in London, on Oct. 25, 2023.SUSANNAH IRELAND/Reuters

Britain’s economy entered a shallow recession last year, official figures confirmed on Thursday, leaving Prime Minister Rishi Sunak with a challenge to reassure voters that the economy is safe with him before an election expected later this year.

Gross domestic product shrank by 0.1 per cent in the third quarter and by 0.3 per cent in the fourth, unchanged from preliminary estimates, the Office for National Statistics (ONS) said on Thursday.

The figures will be disappointing for Mr. Sunak, who has been accused by the opposition Labour Party – far ahead in opinion polls – of overseeing “Rishi’s recession.”

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“The weak starting point for GDP this year means calendar-year growth in 2024 is likely to be limited to less than 1 per cent,” said Martin Beck, chief economic adviser at EY ITEM Club.

“However, an acceleration in momentum this year remains on the cards.”

Britain’s economy has shown signs of starting 2024 on a stronger footing, with monthly GDP growth of 0.2 per cent in January, and unofficial surveys suggesting growth continued in February and March.

Tax cuts announced by finance minister Jeremy Hunt and expectations of interest-rate cuts are likely to help the economy in 2024.

However, Britain remains one of the slowest countries to recover from the effects of the COVID-19 pandemic. At the end of last year, its economy was just 1 per cent bigger than in late 2019, with only Germany faring worse among Group of Seven nations.

The economy grew just 0.1 per cent in all of 2023, its weakest performance since 2009, excluding the peak-pandemic year of 2020.

GDP per person, which has not grown since early 2022, fell by 0.6 per cent in the fourth quarter and 0.7 per cent across 2023.

Sterling was little changed against the dollar and the euro after the data release.

The Bank of England (BOE) has said inflation is moving toward the point where it can start cutting rates. It expects the economy to grow by just 0.25 per cent this year, although official budget forecasters expect a 0.8-per-cent expansion.

BOE policy maker Jonathan Haskel said in an interview reported in Thursday’s Financial Times that rate cuts were “a long way off,” despite dropping his advocacy of a rise at last week’s meeting.

Thursday’s figures from the ONS also showed 0.7 per cent growth in households’ real disposable income, flat in the previous quarter.

Thomas Pugh, an economist at consulting firm RSM, said the increase could prompt consumers to increase their spending and support the economy.

“Consumer confidence has been improving gradually over the last year … as the impact of rising real wages filters through into people’s pockets, even though consumers remain cautious overall,” Mr. Pugh said.

Britain’s current account deficit totalled £21.18-billion ($36.21-billion) in the fourth quarter, slightly narrower than a forecast of £21.4-billion ($36.6-billion) shortfall in a Reuters poll of economists, and equivalent to 3.1 per cent of GDP, up from 2.7 per cent in the third quarter.

The underlying current account deficit, which strips out volatile trade in precious metals, expanded to 3.9 per cent of GDP.

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How will a shrinking population affect the global economy? – Al Jazeera English

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Falling fertility rates could bring about a transformational demographic shift over the next 25 years.

It has been described as a demographic catastrophe.

The Lancet medical journal warns that a majority of countries do not have a high enough fertility rate to sustain their population size by the end of the century.

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The rate of the decline is uneven, with some developing nations seeing a baby boom.

The shift could have far-reaching social and economic impacts.

Enormous population growth since the industrial revolution has put enormous pressure on the planet’s limited resources.

So, how does the drop in births affect the economy?

And regulators in the United States and the European Union crack down on tech monopolies.

The gender gap in tech narrows.

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John Ivison: Canada's economy desperately needs shock treatment after this Liberal government – National Post

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Lack of business investment is the main culprit. Canadians are digging holes with shovels while our competitors are buying excavators

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It speaks to the seriousness of the situation that the Bank of Canada is not so much taking the gloves off as slipping lead into them.

Senior deputy governor, Carolyn Rogers, came as close to wading into the political arena as any senior deputy governor of the central bank probably should in her speech in Halifax this week.

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But she was right to sound the alarm about a subject — Canada’s waning productivity — on which the federal government’s performance has been lacklustre at best.

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Productivity has fallen in six consecutive quarters and is now on a par with where it was seven years ago.

Lack of business investment is the main culprit.

In essence, Canadians are digging holes with shovels while many of our competitors are buying excavators.

“You’ve seen those signs that say, ‘in emergency, break glass.’ Well, it’s time to break the glass,” Rogers said.

She was explicit that government policy is partly to blame, pointing out that businesses need more certainty to invest with confidence. Government incentives and regulatory approaches that change year to year do not inspire confidence, she said.

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The government’s most recent contribution to the competitiveness file — Bill C-56, which made a number of competition-related changes — is a case in point. It was aimed at cracking down on “abusive practices” in the grocery industry that no one, including the bank in its own study, has been able to substantiate. Rather than encouraging investment, it added a political actor — the minister of industry — to the market review process. The Business Council of Canada called the move “capricious,” which was Rogers’s point.

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While blatant price-fixing is rare, the lack of investment is a product of the paucity of competition in many sectors, where Canadian companies protected from foreign competition are sitting on fat profit margins and don’t feel compelled to invest to make their operations more efficient. “Competition can make the whole economy more productive,” said Rogers.

The Conservatives now look set to make this an election issue. Ontario MP Ryan Williams has just released a slick 13-minute video that makes clear his party intends to act in this area.

Using the Monopoly board game as a prop, Williams, the party’s critic for pan-Canadian trade and competition, claims that in every sector, monopolies and oligopolies reign supreme, resulting in lower investment, lower productivity, higher prices, worse service, lower wages and more wealth inequality.

(As an aside, it was a marked improvement on last year’s “Justinflation” rap video.)

Williams said that Canadians pay among the highest cell phone prices in the world and that Rogers, Telus and Bell are the priciest carriers, bar none. The claim has some foundation: in a recent Cable.co.uk global league table that compared the average price of one gigabyte, Canada was ranked 216th of 237 countries at US$5.37 (noticeably, the U.S. was ranked even more expensive at US$6).

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Williams noted that two airlines control 80 per cent of the market, even though Air Canada was ranked dead last of all North American airlines for timeliness.

He pointed out that six banks control 87 per cent of Canada’s mortgage market, while five grocery stores — Sobeys, Metro, Loblaw, Walmart and Costco — command a similar dominance of the grocery market.

“Competition is dying in Canada,” Williams said. “The federal government has made things worse by over-regulating airlines, banks and telecoms to actually protect monopolies and keep new players out.”

So far, so good.

The Conservatives will “bring back home a capitalist economy” — a market that does not protect monopolies and creates more competition, in the form of Canadian companies that will provide new supply and better prices.

That sounds great. But at the same time, the Conservative formula for fixing things appears to involve more government intervention, not less.

Williams pointed out the Conservatives opposed RBC buying HSBC’s Canadian operations, WestJet buying Sunwing and Rogers buying Shaw. The party would oppose monopolies from buying up the competition, he said.

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The real solution is to let the market do its work to bring prices down. But that is a more complicated process than Williams lets on.

Back in 2007, when Research in Motion was Canada’s most valuable company, the Harper government appointed a panel of experts, led by former Nortel chair Lynton “Red” Wilson, to address concerns that the corporate sector was being “hollowed out” by foreign takeovers, following the sale of giants Alcan, Dofasco and Inco.

The “Compete to Win” report that came out in June 2008 found that the number of foreign-owned firms had remained relatively unchanged, but recommended 65 changes to make Canada more competitive.

The Harper government acted on the least-contentious suggestions: lowering corporate taxes, harmonizing sales taxes with a number of provinces and making immigration more responsive to labour markets.

But it did not end up liberalizing the banking, broadcasting, aviation or telecom markets, as the report suggested (ironically, it was a Liberal transport minister, Marc Garneau, who raised foreign ownership levels of air carriers to 49 per cent from 25 per cent in 2018).

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The point is, Canada has a competition problem but solving it requires taking on vested interests. Conservative Leader Pierre Poilievre has indicated he is willing to do that, calling corporate lobbyists “utterly useless” and saying he will focus on Canadian workers, not corporate interests.

“My daily obsession will be about what is good for the working-class people in this country,” he said in Vancouver earlier this month.

Even opening up sectors to foreign competition is no guarantee that investors will come. There are no foreign ownership restrictions in the grocery market (in addition to the five supermarkets listed above, there is Amazon-owned Whole Foods). When the Competition Bureau concluded last year that there was a “modest but meaningful” increase in food prices, it recommended Ottawa encourage a foreign-owned player to enter the Canadian market. It was a recommendation adopted by Industry Minister Francois-Philippe Champagne, to no avail thus far.

But it is clear from the Bank’s warning that the Canadian economy requires some shock treatment.

Robert Scrivener, the chairman of Bell and Northern Telecom in the 1970s, called Canada a nation of overprotected underachievers. That is even more true now than it was back then.

It’s time to break the glass.

jivison@criffel.ca

Get even more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what’s really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers. Sign up here.

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