For years the debate has raged over the need for federal telecommunications subsidies to rural areas. Opponents argue that it is basically unfair to tax urban Americans to provide a lifestyle benefit to people who choose to live in the country. If rural Americans want broadband, they say, they should pay the cost of laying cable, stringing wire or erecting towers to beam signals to distant homes.

Advocates for government subsidies insist that affordable broadband has become a basic necessity and all Americans are entitled to service. If the market can’t provide affordable service because the cost of construction is too high relative to the number of users, then, just as we did for rural electric and telephone services in an earlier era, government should help out. Having more people on the network will benefit everyone in the long run.

Aside from the philosophical debate, the issue becomes more complicated because no one really knows how many people in rural America still need or want access to broadband. To answer that question, the stimulus bill provides $350 million to map the nation’s broadband infrastructure.

Opponents of the study argue it’s a waste of money. Telecommunications companies, they say, already have this data. The government just needs to get them to release it. The companies say that if they release it, it would help their competitors identify market opportunities. Consumer advocates say that would be a good thing — it would stimulate competition.

Coincidentally, a major study just released by the Department of Agriculture provides some insight into the question of who has broadband access and who doesn’t in rural America. As part of its regular survey of agricultural producers, the government asked farmers throughout the country in 2007 if they had high speed internet service. The results confirm many assumptions, but also raise questions.

According to the Department of Agriculture, across the country fewer than one in three farms in rural and exurban counties have a broadband connection. In areas where farms are larger and produce more revenue, however, including the northern Great Plains, the number of farmers and ranchers with a high speed connection is much higher. Even in relatively isolated country like Harding County in the northwest corner of South Dakota, for example, 44 percent of the agricultural producers have high speed access to the internet.Looking at county-by-county data, however, suggests that an enormous digital divide still exists on the northern Great Plains.

In South Dakota, for example, comparing one of the wealthiest agricultural communities with one of the poorest reveals a predictable disparity. While nearly two out of three farmers in Brown County have a high speed connection, only one in five in Shannon County (home to the Pine Ridge Indian Reservation) has a similar onramp to the Information Highway.In between these two highest and lowest ranking counties, however, the data is somewhat puzzling. Agricultural producers in Sully County north of Pierre, for example, are so well connected that the county places second in the state’s rankings. Meanwhile, fewer than four out of ten farmers in rapidly urbanizing Lincoln County near Sioux Falls have a high speed connection. Similarly, 56.9 percent of Spink County farmers (south of Aberdeen) have broadband connections, while only 37.6 percent of farmers in adjoining Day County have similar download speeds.

In general, West River counties, challenged by greater sparcity or mountainous terrain, rank among the least connected in the state. Of the twelve counties in the South Dakota where one-third or fewer agricultural producers had a broadband connection in 2007, nine of these counties are west of the Missouri River. Three are in the Black Hills (Fall River, Custer and Lawrence Counties). As these Black Hills communties seek to attract remote workers and retirees, the lack of broadband access may become a critical factor for economic development.

When the fiscal stimulus stage coach arrives in Pierre and other state capitols on the Great Plains this spring, the broadband package will bring joy to many rural residents. Deciding where to spend those dollars will undoubtedly spark new debates about equity and access. Policymakers will need to keep in mind that the Information Highway may provide the path to prosperity for many small towns and rural communities. 

For direct access to the U.S. Department of Agriculture’s 2007 Census of Agriculture: www.agcensus.usda.gov

For an analysis of the nationwide data, visit the Center for Rural Strategies “Daily Yonder”: http://www.dailyyonder.com/broadband-connection-highs-and-lows-across-rural-america/2009/02/11/1921.   

An earlier version of this post was published at www.dakotaday.com

Over the next quarter century, rural phone companies in South Dakota responded to the threats and opportunities of deregulation and competition in a variety of ways. Many were remarkably innovative, seizing opportunities to expand into new markets and lines of business in an effort to survive and thrive in the new era. Some aggressively grew by mergers and acquisitions to create economies of scale that made them more competitive. The companies also reacted defensively, banding together to resist efforts in the regulatory arena to reduce their revenues or promote competition in their markets. All of these efforts helped shape the marketplace for telecommunications in South Dakota today and the environment in which the deployment of broadband is taking place.

One of the chapters in THE NEW PIONEERS looks at the history of rural telephone companies on the northern Great Plains since the break up of AT&T. Follow the posts on this category to focus on telecommunications issues.