Bringing Broadband to Rural America

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Loosely modeled on efforts by the federal government to bring electricity to rural areas in the 1930s, Connected Nation's approach is simple. Its employees fan out to small towns and rural areas and hold meetings where they demonstrate the benefits of broadband and form what they call eCommunity teams made up of local officials and other prominent people. For instance, they'll show parents better ways to communicate with teachers and brainstorm ways to use broadband in local institutions. Then the organization helps the communities make their appeal to Internet providers.

Fans in Congress

Connected Nation is credited with boosting the availability of broadband in Kentucky to 95% of the population by the end of 2007, from 60% in 2004. In Martin County, in the eastern part of the state, doctors from a local hospital wanted to be able to see patients in remote areas via video conference; a local coal miner, Excel Coal, craved a similar tool for its workers; and the head of the local community college asked for a way to offer classes via videoconference. "Once you have a few anchor tenants, it's easier to make a case to a carrier that they can branch into residential areas where they couldn't justify investment before," Mefford says.

Connected Nation has won fans among lawmakers. The group's outreach in Kentucky was backed by a $7 million state contract. Bills sponsored by Illinois Senator Dick Durbin and Hawaii Senator Daniel Inouye, both Democrats, would designate $40 million in grants to help states fund nonprofits pursuing the Connected Nation approach.

Besides Tennessee, Connected Nation also has set up outposts in Ohio, West Virginia, and South Carolina. It plans to expand into every state, Mefford says. In Tennessee alone, spreading broadband would be worth $2.5 billion and create more than 49,000 jobs, Mefford estimates. Nationwide, a 7% increase in the number of people who have broadband would generate $134 billion in economic activity and create or save 2.3 million jobs annually, according to a report issued by Connected Nation in February.

Overselling Broadband's Benefits?

For all its supporters and apparent success, Connected Nation isn't without detractors. Shane Greenstein, an economist who specializes in telecommunications at Northwestern University's Kellogg School of Management, supports Connected Nation's aims but says the group is overselling broadband's potential economic impact. Broadband wouldn't have the same proportional effect in a rural area as in a suburb or city, he says. "This is what an economist would call an upwardly biased estimate," Greenstein says of the job growth forecast. He also reckons the economic activity figure fails to reflect the amount of time users spend consuming online entertainment rather than engaging in such activities as shopping or banking.

Public Knowledge, a Washington (D.C.)-based consumer rights group specializing in technology, alleges that Connected Nation's eCommunity teams are little more than sales forces for broadband providers. "Why should taxpayers in these states be paying for market research?" asks Public Knowledge spokesman Art Brodsky. Connected Nation's board includes representatives of telecom and cable giants Verizon Communications (VZ), AT&T, and Comcast. Also represented are the Communications Workers of America union and groups that advocate for consumers, children, and people with disabilities.

Mefford notes that any state or federal grants it receives are competitive. He also defends the group's research, saying it's more conservative than similar studies, and that the results are based mostly on survey data collected from people who've recently adopted broadband. "We're not just pulling this data out of the air," he says. "We've done surveys of people in these states with large sample sizes of more than 10,000 people. Our assumptions are informed by these detailed surveys."

Hoping for Home Broadband

Policy and economic critiques aside, few would argue with the potential benefit of broadband to people like Hickman County resident Dwight Sullivan. A self-described "reformed rowdy redneck," 53-year-old Sullivan rises each morning at 5 for chores on his 250-acre cattle ranch before a six-mile commute to his real estate office at Coldwell Banker. He runs a cardboard-box distribution business on the side and moonlights on the local school board and Chamber of Commerce.

While Sullivan has broadband access at the office, he's stuck with dial-up access at home, where he frequently gets calls from potential home buyers who want to see pictures of for-sale properties. It takes Sullivan less time to drive to his office than to send images from home. "People want to see that stuff right away," he says. "It's faster for me the drive the 12 miles and use the broadband at the office." Like many in rural America, Sullivan holds out hope that before long he'll have a broadband connection at home.

Hesseldahl is a reporter for BusinessWeek.com.