Rural broadband packs economic punch nationwide, report says

By Whitney Forman-Cook

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WASHINGTON, April 27, 2016 - Rural Internet providers contributed $24.1 billion to state economies in 2015 - benefits realized not only in the rural areas where broadband was deployed, but in urban areas too, according to a new report by the Hudson Institute.

The report found that about 66 percent of the economic benefit was realized in urban areas, with 34 percent ($8.2 billion) going to rural regions. More than half of the almost 70,000 jobs supported directly or indirectly by rural broadband went to urban areas as well.

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“The advancement and viability of our rural American communities is not just a rural issue but a national imperative,” said Jessica Golden, the executive director for the Foundation for Rural Service, which commissioned the report. FRS was established by NTCA - the Rural Broadband Association in 1994.

“Investing in rural broadband has far-reaching effects for both urban and rural America, creating efficiencies in health care, education, agriculture, energy, and commerce, and enhancing quality of life of citizens across the country,” Golden said in a release.

Texas, Florida and North Carolina created the most jobs and the most economic impact through rural broadband deployment, according to the report. Most of that economic impact can be traced back to e-commerce, or online orders.

Nationwide, almost 60 percent of e-commerce is generated through manufacturing sales, according to the Census Bureau. Rural broadband providers support about $100 billion of those sales in 2015, the report estimated.

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“Rural broadband services are necessary in an economy where the ability to complete a transaction electronically has become indispensable,” said Hanns Kuttner, the report's author and senior fellow with the Hudson Institute.

The market for retail e-commerce has grown substantially, up 30 percent from $261 billion in 2013 to $340 billion in 2015. Without access to the Internet provided by the rural broadband industry, $9.2 billion of these sales would not have taken place, Kuttner argued.

“We estimate that Internet sales would be $1 billion higher if all Americans in rural America had access to broadband,” he added. Currently, just under a fourth of the population in rural areas - 14.5 million people - lack access to high-speed broadband, according to the Federal Communications Commission's latest broadband report.

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