Communities with access to high-speed broadband Internet possess several advantages over communities with only dial-up access. Broadband reportedly spurs economic development;[1] increases jobs and earnings;[2] facilitates the practice of telemedicine;[3] increases access to distance education programs for elementary, secondary, and post-secondary levels;[4] strengthens community participation and civic engagement;[5] and expands markets and opportunities for rural businesses and farms.[6]

Access to broadband in rural areas has increased significantly during the last decade, yet a rural-urban gap still exists. The gap is more pronounced when income is considered, with lower-income rural households much less likely to have broadband than their urban and wealthier counterparts.[7]  Further, even if broadband is available in a rural community, the cost of the service may be prohibitive for many households.[8]

How the Tactic Is Applied

• Work with private providers to improve broadband access for those on the economic margin.
• Provide public sector broadband.
• Evolving Practice: Public-Private Partnerships for Broadband.

Work with Private Providers to Improve Broadband Access for those on the Economic Margin

Town of Houston (Minnesota)

The rural town of Houston, with approximately 1,000 residents, succeeded in connecting low-income families to broadband Internet as a by-product of the school system’s effort to build its student base. With the school system facing a rapidly declining student population, the superintendent and other school system leaders sought to increase enrollment by offering an online education program.[9]  In order to make the online program accessible to local students, the school system pursued a two-part approach. First, it recognized that many families needed a computer. The town therefore partnered with the Mayo Clinic, located about 60 miles away, to obtain donations of used computers for families in the town.[10]  Second, the school system worked with the local phone and Internet service provider to offer reduced-cost broadband for families with children who qualified for the free and reduced lunch program.[11] The school system reports that this initiative expanded broadband use to almost every household in the community.[12]

Provide Public Sector Broadband

City of Wilson[13] (North Carolina)

The City of Wilson offered broadband Internet to its citizens in a program called Greenlight after private broadband providers were unwilling to provide service at rates deemed acceptable to the city.  The project began as an attempt to provide high-speed Internet services only to city government offices, but it expanded once several businesses expressed interest in using the city’s network and a feasibility study revealed broader community interest.

Starting in 2007, the city began expanding the network throughout the city, covering the entire city of about 23 square miles in one year.  Greenlight’s prices are lower than those of the area’s private cable and Internet service provider, although private rates have dropped since Greenlight’s services began.  Currently, about 25% of the city’s households use Greenlight, as do a regional bank, the local community college, and the city school system.

There are risks that accompany municipal forays into broadband service. First, the enterprise may not generate sufficient revenues to cover its costs, and therefore taxpayers could be asked to subsidize the service.[14] Communities should engage in a healthy debate over whether the benefits are worth the costs. Additionally, the regulatory environment in which municipal broadband operates will inevitably change over time. At the time of this writing, state legislators are considering bills which would place limitations on the ability of municipal broadband providers to cross-subsidize broadband operations with other municipal revenue sources.[15]

Evolving Practice: Public-Private Partnerships for Broadband

As a hybrid approach, several municipalities are exploring ways to build infrastructure in partnership with private broadband providers, in essence subsidizing private broadband service in underserved or unserved communities. Other states have encouraged these partnerships through direct grants, loans, and by enacting local taxing authority for broadband installation.[16] The level of subsidy provided to private broadband providers by local governments will ultimately depend upon the relative bargaining positions of local governments and their private partners, to be settled by legislation in the North Carolina General Assembly. To the extent that local governments are permitted to establish public broadband service independently, local governments will possess a stronger negotiating position when determining whether and how much to subsidize a private broadband provider. After all, if the local government is not pleased with the timing or subsidy proposed by the private provider, it will have a realistic option to establish a public broadband service independently. If, however, local governments are restricted in their ability to provide public broadband service on their own, then private providers will be in a position to dictate the terms and subsidies required for the installation and operation of broadband infrastructure in each community.

Learn More

Brian Bowman
Public Affairs Manager
City of Wilson
Wilson, NC
252-296-3363
bbowman@wilsonnc.org
http://www.wilsonnc.org/
http://www.greenlightnc.com/

On the Internet

National Broadband Plan: Connecting America
http://www.broadband.gov/

Capturing the Promise: A 10-Year Action Plan Using Broadband Internet to Increase North Carolina’s Competitiveness and Sustainability in the Global Economy
https://ncbroadband.gov/broadband-101/e-nc-publications