Rural Broadband Internet's Effect On Small Town Economies

By Author: Jai Prakash Srivastava
Total Articles: 198
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The Government's commitment to providing high-speed Internet connections to rural America through the Federal Broadband Stimulus program, may have a positive economic effect for customers accessing newly born services. However, the effect on rural businesses may not be so positive.

It is not an unfamiliar fact that customers of rural businesses usually pay more for the same products and services that mainstream Americans do. The reasons are numerous, and in many cases justified. Smaller customer bases and higher costs to receive goods or deliver services are a big contributor to higher costs for rural consumers.

Imagine for a moment that instead of dial up Internet access, rural citizens had access to a high-speed Broadband Satellite Internet connection. Faster and easier access to information, would assuredly empower customers to seek lower costs through on-line shopping. The need for many farmers, ranchers or just ordinary rural dwellers, to trudge off to the local emporium for food, feed, tools, etc., would be greatly diminished and small rural business may eventually suffer irreversible consequences.

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... won't find many arguments against technological advancement here and the prospect of rural high-speed Internet access is both exciting and necessary for that long ignored customer base. Still, one can't help but feel a little worried about yet another staple of small town rural American life going by the wayside. Another Saturday Evening Post ideal lost forever.

The hope is for rural users to have the technological advantages available to them, but without the adverse effect on small businesses. It seems to be a risk worth taking, when you weigh in the benefits of high-speed Internet, which would also include, but would not be limited to; social benefits (email), economic benefits (e-commerce), educational benefits (e-learning or distance learning), entertainment benefits (movies, music etc,) and information benefits (news, politics, weather, and sports) for its citizens.

Laying fears to rest was a study performed on rural communities, which produced some surprising and positive results.Between 2002 and 2006 the study was performed on 228 selected rural counties that had relatively high broadband availability in 2000, and rural "twin" counties that mirrored their economic structure in terms of farming, manufacturing, retail trade, Federal, State and Local Government income as a percent of total income. Population sizes and densities were also closely matched and the presence of interstate highways and per capita income levels were factored.

The results were interesting and reassuring to say the least. Counties that had access to Broadband services, had lower unemployment levels, due largely to businesses being attracted to areas were they could operate through high-speed Internet accesses. Average wages for those employed were significantly higher in broadband available areas as well.The farm sector seemed to be largely unaffected by broadband Internet access, with productivity changing very little. Somewhat surprising was how unaffected local merchants were. Many took advantage of the Internet advancements to be more cost efficient and smartly passed those savings to their customers. Education and other factors proved to difficult to measure, but what wasn't hard to measure was the overwhelming amount of rural customers who jumped at that chance to upgrade their Internet service from dial-up.

The conclusions we can draw from this study are that rural Americans need and can benefit greatly from the availability of high-speed Internet services. Satellite Internet is the logical vehicle to supply these areas with access, because of how it is delivered. If the cable and DSL providers thought it was cost-effective to service these areas, I am assuming they would have done so years ago.

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