{"id":5832,"date":"2013-10-01T07:41:58","date_gmt":"2013-10-01T11:41:58","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=5832"},"modified":"2013-10-01T07:47:48","modified_gmt":"2013-10-01T11:47:48","slug":"general-broadband-adoption-improves-rural-economic-health","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2013\/10\/general-broadband-adoption-improves-rural-economic-health.html","title":{"rendered":"General broadband adoption improves rural economic health"},"content":{"rendered":"

\r\nWant more income, jobs, and creative workers?\r\nGet as many people as possible to use fast affordable Internet connections:\r\nthat’s the result of a nationwide detailed study.\r\nAdoption matters more than availability, and speed matters\r\nfor creative workers.\r\n

\r\n\r\n\"No<\/a>\r\n\r\nBroadband’s Contribution to Economic Health in Rural Areas: A Causal Analysis<\/a>\r\nBrian Whitacre, Oklahoma State University; Roberto Gallardo, Mississippi State University; Sharon Strover, University of Texas at Austin,\r\npresented at the Telecommunications Policy Research Conference,\r\nSeptember 2013.\r\n

\r\n

\r\nConclusion and Policy Implications\r\n<\/H4>\r\n

\r\n\r\n\"Title<\/a>\r\nThis research yields important findings on the effect of broadband\r\non economic gains, namely on household income and employment levels.\r\nThe ability to do matched county comparisons, specifically in\r\nnon-metro counties, demonstrates the influence of adoption (as\r\nopposed to availability) in producing these positive outcomes, and\r\nconstitutes another indication that development efforts should focus\r\non mobilizing populations to subscribe to and use broadband\r\ncapabilities. Again, cultivating local leadership, mobilizing the\r\nservices of cooperative extension educators nationwide, and working\r\nmore closely with each State Broadband Initiative could be fruitful\r\navenues for targeting adoption.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nWe’re in a fertile field for economic improvement this way:\r\n

\r\n\r\n\"County-level<\/a>\r\n

\r\n

\r\nFigure 1 displays the 2010 FCC adoption data from a geographic\r\nperspective. Several states exhibit low levels of adoption, notably\r\nthose in the South (Georgia, Mississippi, and parts of Louisiana,\r\nTexas, and Oklahoma). Very high levels of broadband adoption exist\r\nin the Northeast, and also near Denver in Colorado. Interestingly,\r\nmost states have pockets of counties with high levels of adoption,\r\nand there does appear to be a general spatial trend among the data.\r\nMany of the counties with low levels of adoption are lightly\r\npopulated and have lower income levels. In fact, the average county\r\npopulation in 2010 for counties with the lowest adoption levels is\r\n11,760 (compared to the national average of 25,020 for all non-metro\r\ncounties). Similarly, the average median household income level in\r\nthese counties is $34,500 compared to $39,500 for all non-metro\r\ncounties.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThe Valdosta MSA is part of this study.\r\n

\r\nThe really interesting part to me is that what matters most is not business adoption of broadband: it’s adoption by the general population.\r\nSee page 16:\r\n

\r\n

\r\nThe results suggest that, generally, broadband adoption,\r\navailability, and download speed do have meaningful impacts on\r\ngrowth rates of economic health measures in non-metropolitan\r\ncounties. In particular, non-metro counties that demonstrated high\r\nlevels of broadband adoption (defined as county-level adoption rates\r\n>60%) had significantly higher levels of growth in median household\r\nincome and significantly reduced levels of unemployment when\r\ncompared 16with otherwise similar counties that did not meet this\r\nthreshold. Alternatively, low levels of\r\nbroadband adoption (<40%) imply detrimental impacts for rural businesses,\r\nwith low-adoption\r\ncounties having firm and employment growth rates approximately 3\r\npercentage points lower when compared to their matched counterparts.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThis is not just correlation: they’re talking causality, with evidence for it;\r\nsee page 4:\r\n

\r\n

\r\nIn general, the studies related to broadband and rural economic\r\ndevelopment are limited. Most analysis related to broadband and\r\neconomic outcomes are focused on aggregate or urban measures, with\r\ninvestigations specific to rural typically being more anecdotal or\r\nhypothetical. This paper seeks to address this shortfall and provide\r\nempirical evidence of a causal relationship between broadband\r\navailability \/ adoption and economic growth in rural areas.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n\r\n\"Data<\/a>\r\nCo-author Prof. Sharon Strover of UT Austin is one of the most\r\nexperienced and savvy researchers in this field (that’s the back of her head\r\nin the picture).\r\nThe study uses multiple data sources and meshes them together\r\nwith rigorous statistical analysis to get some results.\r\n

\r\nSurprisingly, it doesn’t<\/em> correlate with number of local providers.\r\nSo it’s not about getting new providers in.\r\nThe only new entrant we’re likely to see is\r\n\r\nSoftbank + Sprint + Clearwire<\/a>,\r\nor maybe Google fiber, unless somebody does a municipal network.\r\nIt’s about\r\n\r\ngetting the incumbents to get off their low-and-slow duff<\/a>\r\nand provide real speeds and coverage for affordable prices.\r\n

\r\nOn page 6 the researchers say what they mean by broadband:\r\n

\r\n

\r\nThe FCC data also include information on two distinct speed\r\nthresholds for “broadband” — one defined under the\r\ntraditional measure of at least one direction with 200kbps, and\r\nanother under a faster definition of 768kbps download, 200kbps\r\nupload.5<\/sup><\/small>\r\n

\r\n5<\/sup><\/small>\r\nThis speed (768 kbps down, 200 kbps up) was adopted by the\r\nFCC at one point as a definition for broadband, and BTOP likewise\r\nused it for reporting purposes. The most current broadband speed\r\ndefinition the FCC uses is 4 Mbps for download and 1 Mbps upload.”\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThey didn’t include wireless because it’s not in the datasets they\r\nwere using. They’re aware of its current value and potential; same\r\npage:\r\n

\r\n

\r\n“It is worth noting that this primary variable of interest deals\r\nwith residential fixed (wireline) broadband connections —\r\ntherefore, wireless or phone connections are not included.”\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nLocally, AT&T has already been bragging about\r\n\r\ninvesting $675 million in Georgia networks<\/a>\r\nincluding wireless.\r\nWe’ll see how much that translates into fast affordable service coverage,\r\ngiven that\r\n\r\nAT&T still doesn’t have as good coverage at Verizon<\/a>,.\r\n

\r\nAvailability also does matter, just not as much and not as firmly\r\nestablished; see page 17:\r\n

\r\n\r\n\"Number<\/a>\r\n

\r\n

\r\nBroadband availability<\/em> thresholds also demonstrate some (potentially\r\ncausal) relationships with economic health, although the results are\r\nsomewhat counterintuitive. Non-metro counties with high levels of\r\nbroadband availability (>85%) had growth rates of non-farm\r\nproprietors income that were over 5 percentage points lower than\r\ncomparable counties with lower levels of availability. This suggests\r\nthat high levels of availability are actually causing non-farm\r\nproprietor income to decline — perhaps suggesting that\r\nnon-farm proprietors in these areas are not taking advantage of\r\nhigher levels of availability. If residents have high levels of\r\navailability, they may expect most businesses they deal with\r\n(including the self-employed) to offer online payment options or\r\nhave a viable web presence. Entrepreneurs who do not offer these\r\nelements might find their incomes declining. Table 4 also\r\ndemonstrates that non-metro\r\ncounties with low levels of broadband availability (<50%) had growth\r\nrates of median household\r\n\r\n\"Methodology\"<\/a>\r\nincome that were marginally higher than otherwise similar counties.\r\nAlthough this result is counterintuitive, recall that the treated\r\nand non-treated groups are matched based on their probabilities of\r\nreaching the broadband threshold — in this case, having very\r\npoor broadband availability. Counties with high likelihoods of\r\nhaving such poor levels of infrastructure likely have low population\r\ndensities, and relatively low income and education levels. Changes\r\nto median household income over a 10-year period can be driven by\r\nany number of factors, including returns to those residents that do\r\nhave access to (and productively use) broadband.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nIt’s not just any old availability.\r\nSpeed matters; see page 18:\r\n

\r\n

\r\n\r\n\"Availability,<\/a>\r\nIn terms of broadband download speeds<\/em>, attaining a high threshold\r\n(>10 Mpbs) appears to be causally linked to higher increases in the\r\npercentage of employees classified as creative class workers.\r\nAlthough the difference between treated and control groups was less\r\nthan 1 percentage point in this case, many rural communities are\r\nactively seeking to attract creative class workers, and these\r\nresults indicate that having high download speeds available plays a\r\nrole. Poverty levels were also roughly 2.6 percentage points lower\r\nin non-metro counties with high download speeds compared to\r\notherwise similar counties, suggesting that broadband speed can be\r\nan important contributor to general community well-being.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nYou can get work done at lower speeds:\r\n

\r\n\r\n\"Propensity<\/a>\r\n

Finally,\r\nhaving only low levels of\r\naverage download speeds (< 3Mbps) is associated with marginally higher\r\ngrowth rates in median\r\nhousehold income. This counterintuitive result may suggest that many\r\nproductive uses of broadband can still be accomplished at lower\r\nspeeds.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nBut if you want “creative class workers”, or what our local Chamber\r\nhas called “knowledge-based workers”, you want fast speeds; see also page 23:\r\n

\r\n

\r\n\r\n\"Propensity<\/a>\r\nA particularly interesting result is that achieving high levels of\r\ndownload speed in non-metropolitan counties does seem to have the\r\ndesired result of attracting creative class workers and lowering\r\npoverty levels.\r\nThis suggests that while promoting adoption should be the first and\r\nforemost goal, achieving higher levels of speed in rural areas is\r\nalso a worthy policy premise. In the future, case studies on very\r\nhigh speed networks such as those in Chattanooga and Kansas City may\r\nalso be warranted given that most (76%) of economic development\r\nprofessionals in a recent survey felt that speeds of 100 Mbps or\r\ngreater were needed to effectively attract new businesses (Settles,\r\n2012). The recent growth of fiber networks in rural portions of the\r\ncountry (many funded by the American Recovery and Reinvestment Act)\r\nwill also provide an opportunity for studies related to economic\r\ngrowth.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nAnd I can attest that\r\nif you want lots of local video bloggers, you want fast upload, too.\r\nImagine if everybody could post their own view of the local football games….\r\n

\r\nOnce again what matters most for economic health is not just\r\navailability: it’s adoption by the general public.\r\nNot just business adoption:\r\nadoption by the general public.\r\nSee page 19:\r\n

\r\n

\r\n\r\n\"Propensity<\/a>\r\nFrom a policy standpoint, this suggests a need to focus on\r\nincreasing adoption rates in order to spur economic growth, and that\r\nsimply improving levels of infrastructure availability will not\r\nnecessarily achieve that goal.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nSo it’s availability + adoption that matters for rural economic health.\r\nOh, and another study indicates possibly also\r\n\r\nincreased house prices<\/a>.\r\n

\r\n -jsq\r\n<\/p>","protected":false},"excerpt":{"rendered":"Want more income, jobs, and creative workers? Get as many people as possible to use fast affordable Internet connections: that’s the result of a nationwide detailed study. Adoption matters more than availability, and speed matters for creative workers. Broadband’s Contribution to Economic Health in Rural Areas: A Causal Analysis Brian Whitacre, Oklahoma State University; Roberto […]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[14,132,289],"tags":[4022,7003,7002,8704,8701,507,8741,1458,8702,12,7,8758,7001,590,7000,6989,6],"class_list":["post-5832","post","type-post","status-publish","format-standard","hentry","category-economy","category-internet-access-speed","category-science","tag-adoption","tag-affordable","tag-creative-workers","tag-economy","tag-georgia","tag-internet","tag-internet-access-speed","tag-knowledge-based","tag-lake","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-science","tag-sharon-strover","tag-speed","tag-telecommunications-policy-research-conference","tag-tprc","tag-valdosta"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-1w4","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/5832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=5832"}],"version-history":[{"count":4,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/5832\/revisions"}],"predecessor-version":[{"id":5836,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/5832\/revisions\/5836"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=5832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=5832"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=5832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}