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

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:

• 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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