UMN Expert: Rural Broadband
President Trump recently signed an Executive Order to expand access to broadband internet in rural America.
University of Minnesota expert Steve Kelley, Senior Fellow at the Humphrey School of Public Affairs, provides answers to the following questions surrounding expanding rural broadband and is available for additional comments.
Even with the support from President Trump for expanding rural broadband, how much investment from both public and private sectors will realistically be needed to make that happen?
“The answer depends on the state. Densely populated eastern U.S. states have less geography to cover and more people who can share the costs of running a broadband system. According to the Task Force on Broadband, the cost of extending broadband to unserved businesses and residences in Minnesota is about $1.4 billion. These estimates also vary depending on the speeds used to define the term ‘broadband’.”
Why does the lack of access remain such a pressing issue for rural areas in Minnesota and other states?
“Rural areas face the reality that providing reliable wireline service to their residents and businesses has a high capital cost, accompanied by higher operating costs to maintain the infrastructure. We have subsidized rural telephone and electric service, but have not agreed as a country on the best methods of supporting the higher costs associated with broadband in rural areas.”
How likely do you think it is that the federal government will provide the level of funding necessary?
“The recent tax cut legislation will put limits on the federal budget, limiting the resources available from the federal discretionary budget. The FCC has not shown an inclination to increase the fees that help subsidize rural telecommunications so it seems unlikely that the federal government will play a role. The President has floated the idea of using tax cuts or credits to increase infrastructure investment but it is uncertain whether such new tax benefits will be large enough to increase rural investment.”
Steve Kelley is a senior fellow at the Humphrey School of Public Affairs. Kelley, a former state legislator and an attorney, has expertise in state and local government structures; joint powers, telecommunications and information technologies; technology-enhanced education; and rural broadband access.
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