Investment in rural broadband helps whole state


We should not be paying anything so rural people in Wyoming can access the internet. If they are good Americans they should simply pay for and build the infrastructure themselves. If I am not using it, just more wasteful spending.

That is a comment on a recent Wall Street Journal article on the new broadband maps but you can find some variation on it in the comments of nearly any mainstream article that talks about broadband. I know their commenter’s hot button issue is taxes, not broadband, but it misses the point that broadband is a not simple expense, it’s an investment. Whether this person recognizes it or not, it is an investment made in rural areas that will have a positive impact on urban areas too.

Minnesota Rural Partners (MRP) recently published a report. Pilot Study: Estimating Rural and Urban Minnesota’s Interdependencies that quantifies return on investment made in rural areas for both the rural area and the Twin Cities. (The paper will be discussed at an upcoming event on April 5.) The Pilot study looked at two industry sectors (manufacturing and agribusiness). Talking with Jan Leonard, past president of MRP, she emphasizes that this is a pilot, there is more research to be done, but that it is satisfying to see the measureable results. This study should pique curiosity and open doors to further research.

The key findings of the report include:

  • Rural Minnesota provides critical employment in a number of the most sought after industry sectors. Forty percent of Minnesota’s total employment in 17 targeted industry clusters takes place in rural Minnesota.
  • Certain clusters have a footprint spread more evenly between rural and urban regions.
  • Increased consumer spending and investment activities, as a result of increases in agribusiness and manufacturing output, benefits Minnesota’s urban region in fairly similar ways.

I want to pull out a few points that really caught my attention…

  • Minnesota’s urban region receives substantial economic benefits from improved prosperity among its rural neighbors.
  • If rural Minnesota’s manufacturing cluster experiences a 6 percent growth in output ($1 billion), the urban area picks up 16 percent of all the jobs gained and 38 percent of all additional output.
  • The reverse is also true: a $1 billion decrease in manufacturing output in rural Minnesota results in 1,043 jobs lost and a loss of $207, 822,848 in revenue among Twin Cities area businesses.

I think it’s important to look at the cost of not investing!

Looking at the recent USDA report on the impact of the ARRA funding ( THE AMERICAN RECOVERY AND REINVESTMENT ACT: WORKING FOR RURAL COMMUNITIES) through the lens of the MRP report makes the USDA data even more valuable. The USDA reports…

Under the Recovery Act, the Department of Agriculture’s Rural Utilities Service (RUS) and the Department of Commerce’s National Telecommunications and Information Administration (NTIA) worked together to deploy high-speed broadband networks across the country for a combined investment of roughly $8.2 billion… These RUS investments will bring broadband to approximately 2.8 million households, 364,000 businesses, and 32,000 anchor institutions across rural America. These projects also overlap with 31 tribal lands and 125 persistent poverty8 counties. Estimated to create more than 25,000 immediate and direct jobs9, these projects are also expected to contribute to the long-term economic development opportunities in each rural community where a broadband project is launched.

I had an opportunity to talk with Jane Leonard about the MRP report and the role/impact/place of broadband. Her immediate response was telling…

You can’t do business without broadband. Broadband undergirds the communication infrastructure of all business today. Pony Express was the broadband of its day. It was necessary for businesses as broadband is today. It’s infrastructure that increases the interdependencies between rural and urban because it opens up possibilities. This report indicates quantitatively that rural matters.

We spoke too about the long and term effects of investment in rural areas…

There are three essential elements for life 1) food, 2) water and 3) energy. Cities are reliant on their urban counterparts for these elements. We need to be good stewards of these elements to safeguard our future; we ignore them at our own peril. Part of good stewardship is ensuring that rural areas have the infrastructure they need to thrive.

The report and Jane’s comments are compelling. In the short term, investment in rural broadband means rural jobs. An increase in rural jobs will spur an increase in jobs in urban areas. For the long haul, an investment in rural areas is an investment in the essential elements we need for life on the most basic level.