Proposed bill would rev-up Internet access in rural areas

The digital divide between rural and urban households when it comes to Internet access narrowed sharply between 1998 and 2000, according to statistics from the U.S. Department of Commerce (www.doc.gov). However, a significant gap still remains when it comes to deployment of high-speed access.

The Rural Telecommunications Enhancement Act, HR 2669, would help change this by providing $500 million in loans and $2 million in grants each year over the next 10 years to finance broadband Internet service in rural areas. Congressman Jerry Moran (R-KS;www.house.gov/moranks01) introduced the bill July 27, saying it would help bring rural areas more jobs, better information and improved quality of life.

Because the bill is technology neutral, cable modem, DSL, satellite and wireless broadband services all could compete for the funds.

However, one of the bill’s co-sponsors, Rep. Thomas Osborne (R-NE;www.house.gov/osborne ), said earlier this year that wireless broadband was the best method to provide high-speed Internet access to farmers and rural areas in Nebraska. HR 2669 not only will ease the up-front cost of initiating service in rural areas, but it will encourage telecom companies to make a long-term commitment to providing the broadband services his district needs, Osborne said.

A report contrasting broadband deployments in rural vs. non-rural areas, Advanced Telecommunications in Rural America: The Challenge of Bringing Broadband Service to all Americans (www.ntia.doc.gov/reports/ruralbb42600.pdf), was published in April 2000 by the National Telecommunications and Information Administration (www.ntia.doc.gov) and Rural Utilities Service (www.rurdev.usda.gov/rus). It said that although all eight U.S. cities of more than 1 million population had cable-modem service, just 20 of the 9,993 towns under 1,000 population had access to the service.

Figure 1. Cable-modem access by city size

RBOC-provided DSL service also was available in each of the top eight cities but in none of the towns under 1,000. In fact according to the report, the RBOCS provide DSL in only 1.6% of all towns with 100,000 population or less.

Figure 2. RBOC-provided DSL access by city size

A Department of Commerce report published in October 2000, Falling Through the Net: Toward Digital Inclusion (www.esa.doc.gov/fttn00.htm#4), said one of the most dramatic shifts that has occurred since December 1998 is the increase in Internet access by rural households. The gap between rural households and households nationwide was 4 percentage points in 1998, but narrowed to a 2.6-point difference in 2000. In rural areas, 38.9% of households had Internet access in 2000, an increase of 75% over the 22.2% that had access in 1998. Nationwide the figures were 41.5% of all households in 2000, up from 26.2% in 1998.

However, the same report noted that when it came to broadband Internet access, rural households did not fare so well, coming in below central-city areas, urban areas, and the United States as a whole.

Figure 3. Percent of U.S. households with high-speed Internet access

HR 2669 proposes to change this. The bill defines a rural area as one of up to 25,000 inhabitants. Entities eligible for the funds could be public or private (but not a federal agency) and might include cooperatives and non-profits.

Nationwide, cable modems and DSL are the clear broadband technology leaders at 50.8% and 33.7%. Wireless, including satellite, only accounted for 4.6% of broadband access, and the report didn’t break this down by urban vs. rural.