Figure 1. Broadband-related funding from the American Recovery and Reinvestment Act of 2009, Broadband Technology Opportunity Program (BTOP) portion.
The “digital divide” – the gap in household broadband adoption between rural and urban areas – is an important topic fur rural America. We have written before that the gap has actually widened over time for the rural elderly and poor. We have also shown that high broadband adoption rates are associated with economic growth in rural counties. But, what policies should be put in place to help address this gap?
The current federal policy prescription is to subsidize infrastructure (i.e., provide fiber / cable lines or wireless service to underserved areas). In fact, of the $7.2 billion made available for broadband funding during the American Recovery and Reinvestment Act (ARRA), over 90% was focused on providing infrastructure. Other programs, like Community Connect grants through USDA, also focus almost explicitly on infrastructure.
However, our new study suggests that although this “supply-side” focus is still important, significantly more attention (and funding) should be given to encouraging broadband adoption in rural areas – particularly in places that already have existing infrastructure.
We first used Current Population Survey (CPS) data to document that the urban-rural broadband adoption gap was 13 percentage points in 2003 versus 12 percentage points in 2011. In other words, the gap remained almost unchanged even though there was a significant increase in household broadband adoption rates in both urban and rural households between 2003 and 2011.
Figure 2. Household broadband adoption rates by metro / non-metro status, 2003 and 2011. The gap between metropolitan and rural areas changed little over the eight-year period.
The population survey also asked why residents didn’t use broadband. Interestingly, “No need” was the #1 response for rural households in both years (with rates over 40%), whereas “not available” represented less than 5% of the responses in 2011. Note also that the “no need” response has increased over time while the “not available” response has decreased. This gives some preliminary evidence that it is the demand for broadband (and not supply) that is driving the gap. However, the National Broadband Map also tells us that rural areas have lower levels of infrastructure available to them – and this may still be contributing to the gap.
Figure 3. Primary reason for non-adoption of broadband in non-metropolitan households. “No need” was the most frequently cited reason for not using broadband.
To take a deeper look at the main drivers of the rural – urban digital divide, we used a technique that allows us to predict hypothetical broadband adoption rates. For example, if we gave rural characteristics (such as education, income, age, etc.) to urban households – what would happen to the urban adoption rate? How much of the gap would that explain? Similarly, if we replaced urban levels of broadband availability (which are typically very good) with those found in rural areas (which are typically not as good), what would happen to the urban adoption rate?
The results showed that for 2011 if rural households were to have similar socioeconomic characteristics as urban households, 52% of the 12 percentage point gap would disappear. When we assigned rural levels of broadband infrastructure to urban areas, on the other hand, 38% of the broadband adoption gap disappeared. Approximately 10% of the gap remains unexplained by any of these characteristics.
Figure 4. Decomposition of 2011 metro – non-metro digital divide. Socio-economic differences between urban and rural residents explained 90% of the difference in usage rates between the two populations. Ten percent was unexplained.
The results demonstrate that broadband availability – which the majority of federal policies have focused on – is only partially responsible for the broadband adoption gap between urban and rural households. We argue that more attention should be paid towards inducing demand, through educational and awareness efforts, for broadband in rural areas – particularly among households with lower levels of education and income.
As more and more crucial activities are being conducted online (children’s homework, searching for and applying for jobs, etc.), federal and state broadband policies should concentrate in increasing rural adoption rates targeting specific demographics with digital literacy efforts. There is already some good work being done in these areas across the country (a nice summary of some early demand-oriented programs can be found here) and we argue that more federal funds should be used to support this type of work. It is important to note, however, that funds should also be used to evaluate which types of programs actually work. A preliminary study on the adoption-oriented ARRA funds (referenced in Figure 1) shows that they did not have a meaningful impact on increasing local broadband adoption rates.
An increasing body of evidence is showing that it is the adoption of broadband (and not simply the provision of infrastructure) that is responsible for improved economic outcomes in rural areas. Refocusing national broadband programs to emphasize this adoption component is the next logical step.
Brian Whitacre is an associate professor in the department of Agricultural Economics at Oklahoma State University.
Sharon Strover is a Regents Professor in Communication at the University of Texas, where she directs the Technology and Information Policy Institute.
Roberto Gallardo is an associate extension professor at Mississippi State University.
The full study on which this article is based is available online.