Report on Broadband in Rural Areas

The Congressional Research Service (CRS) https://www.crs.gov report authored by Brian E. Humphreys, an Analyst in Science and Technology Policy, is titled “Demand for Broadband in Rural Areas: Implications for Universal Access” (December 2019). The report points out according to the FCC https://www.fcc.gov, over 20 million Americans predominantly living in rural areas lack access to high speed broadband services https://www.fcc.gov.

So far, Federal subsidies underwritten by taxpayer funds and long distance telephone subscriber fees have injected billions of dollars into rural broadband markets over the past decade mostly in the form of grants, loans, and direct support to broadband providers.

Even so, adoption rates have leveled off after more than a decade of rapid growth despite the fact that broadband providers have extended service to remote and hard-to-serve areas. Observers note that the weak demand in broadband markets makes it even more difficult for federal agencies to elicit private sector program participation and investment in high cost high risk rural areas.

On average, rural areas are less wealthy than urbanized areas and have older populations with lower educational attainment that correlates with a lower demand for broadband service. Other related barriers to adoption, such as lower perceived value, affordability, computer ownership and computer literacy still persists.

Broadband advocates frequently identify broadband enabled services like telemedicine as a potential demand driver. However, lower rates of health insurance coverage in rural areas plus certain state regulations limiting Medicaid reimbursement for telemedicine services, may depress demand growth and private sector investment in broadband.

The report also mentions that support for the emerging telehealth sector on rural areas for broadband service is unclear. Rural counties with the least access to medical care typically also have the least access to broadband.

The demographic profiles typical of these locations are associated with both lower broadband adoption and lower rates of health insurance coverage, so broadband buildout there might not lead to substantially greater telehealth use.

According to the CRS report, usage rates appeared to track closely with cost. The highest usage rates were for online health research that costs little and can be conducted anywhere that has basic internet access.

The 2018 USDA study on rural telehealth, conducted by USDA’s Economic Research Service https://www.ers.usda.gov, reports that existing rural connectivity was sufficient for most health maintenance activities, but the issue of acceptance and/or remuneration levels by the health insurance industry and government health support programs was also cited as an impediment to implementation.

Go to https://crsreports.congress.gov/product/pdf/R/R46108 to read the CRS report.

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