farmgate: Broadband Internet: Is It Really That Important For Rural America To Have It?
Right now you are reading a blog on the Internet. That is something that you would not have known anything about 15 years ago, may not have had access to 10 years ago, but may still have an inefficient connection that takes too much patience to appear on your computer screen. Some farmers in rural America are very efficiently connected and others have no way of getting an Internet connection. This so-called “digital divide” not only puts some farmers behind their counterparts, but also impacts entire communities, which lose out on health, education, and economic development. But as we approach the end of the decade, has rural America really achieved satisfactory broadband connectivity?
The Internet has allowed humanity to talk to itself, learn about itself, and communicate in ways that no one imagined just a few birthdays ago. You are facebooking, twittering, blogging, and texting many people, but there are many more who cannot learn about you because of the lack of cable down their lane, or because pairs of telephone wires just can’t handle the load. It may be the result of costs, which may be a bargain to some, but are exorbitantly priced for others. The issue received extensive study by USDA’s Economic Research Service which tries to measure the economic impact of Internet access on rural America.
Broadband is a term that indicates a high capacity of information flow. We probably all began with a dial-up system and many of our rural neighbors are still limited to little more than text e-mail messages. Even the colorful banner atop this page will prevent many folks from reading what you are reading. While computer modems will carry 56 kilobytes per second, the actual speed in rural areas remains at 14 kilobytes per second. The minimum broadband speed is generally defined as 200 kilobits per second in one direction, but other technologies allow faster data flow. At the last survey of households in 2007, 55% had broadband access, with 46% using DSL and 39% with a cable modem. 12% used wireless connections.
Broadband Internet business had taken many new positive turns in recent years:
• Online retail sales have grown from $31 billion in 2001 to $107 billion in 2007.
• Online wholesale trade comprised 16% of sales.
• Online wholesale trade in farm products was $5 billion in 2006 or 4% of all wholesale farm product sales.
• Crafts that were once limited to state fairs, are now marketed year round to wide audiences.
• Banks that used to be local, have been deregulated, attracting customers from wide areas, and that has hastened consolidation of the financial markets recently.
• Citizens have been able to pay taxes and fees to governments, lodge complaints, and apply for various programs.
While all of these opportunities are available to some, they are not available to all. A 2008 survey found 69% of adults who used the Internet had access at home. However, only 41% of adults in rural households had broadband access at home. The survey also details that broadband users are well ahead of dial-up users when it comes to common Internet uses, such as getting news and weather, blogging, downloading podcasts, and using social networking sites. Geography plays an important part in Internet use, which ERS indicates is less frequent in the South than in other parts of the country. Household income has little to do with Internet use, but income is a major factor in whether a household has in-home Internet access, and the USDA 2007 survey reports 84% of urban households had broadband access, while it was only available to 70% of rural households.
One of the problems created with the lack of broadband access in rural areas is the impact it has on education. Youngsters benefit from educational program availability on the Internet, but without broadband access, many rural youngsters will not have that privilege. Another problem increases in its importance in the current recessionary economy, and that is the capability of the Internet to assist in job searches and bolster home businesses.
Broadband access can be defined by zip code, according to a survey by the Federal Communications Commission. Metropolitan zip codes are smaller than rural zip codes; urban areas have more population and subsequently they have more Internet providers than rural areas by a nearly 2 to 1 ratio.
The USDA economists analyzed data from 114 pairs of rural communities, where demographic and economic data were parallel with another, and the only difference was the extent of the broadband access. The findings for the years 2002 through 2006 were:
1) Employment grew faster in counties with better broadband access.
2) Wage and salary jobs, and proprietors grew faster in counties with early broadband access.
3) Income showed a mixed result, but USDA said the survey did not account for farm earnings due to weather and market volatility.
With the ability of the Internet to provide large amounts of information over a wide area quickly, USDA says Internet use may lead to greater efficiency in agricultural and rural businesses. “They found that total nonfarm employment growth was significantly related to broadband lines per capita. The results for GDP were not statistically significant. The strongest effects of broadband Internet on employment growth were in finance and insurance, real estate, and education services.” While many rural retailers benefitted from the availability of broadband service, farm businesses had some different statistics.
Respondents to a 2007 USDA survey indicated 63% of farms had a “high-speed” Internet service and over 60% had broadband access. Successive surveys found that the greater the income and skill levels of farmers the greater the chance they would have Internet access. Additionally, the greater an individual’s educational attainment the greater the likelihood of Internet use at home or at work. Also the average age of farm operators with no Internet use in 2007 was 62%, compared with 54% for those use accessed the Internet with broadband services.
Just like rural banks finding themselves fighting for a market beyond their local community, the Internet has allowed farmers to look beyond the nearest town to define his local area of operation, particularly for the purchase of inputs.
Summary:
Broadband Internet service is something that is expected in urban areas, but it is not always available in rural areas, and that fact means differences in the communities, particularly the degree of economic development. Broadband access has aided the success of both retail and wholesale businesses, as well as increased the educational capacity of a community.
Posted by Stu Ellis on August 18, 2009 12:36 AM to farmgate