Why broadband matters

The pandemic has brought home the importance of high-speed internet access in all manner of everyday life.

Recent studies have found that broadband matters for jobs, incomebusiness relocationcivic engagement and health.

While availability has generally increased over the past decade, there is still a significant “digital divide” in terms of who has access to broadband. The latest data available shows that in some states, less than 50% of rural residents have a broadband connection available where they live.

Policies meant to increase access

Many state governments have adopted one or more of three approaches that can affect broadband availability: establishing broadband offices, increasing funding and restricting municipal networks.

In 2018, 25 states, including MinnesotaTennessee and North Carolina, had offices with full-time employees devoted to getting more residents connected to high-speed internet. In general, they work with providers and communities to find ways to connect those without high-speed connections and to improve adoption rates where broadband already exists.

A total of 18 states, such as Colorado and California, had special funding programs that help subsidize broadband deployment in rural areas. These programs offer financial incentives to providers to install broadband infrastructure in lower-density areas where obtaining a profit is more difficult.

UtahWisconsin and 18 other states have adopted policies that restrict the ability of cities, utilities and other public entities to build their own broadband networks. Supporters of these restrictions, which aren’t intended to increase access, argue that municipal networks represent unfair competition to private providers.

We wanted to know how these policies affected the share of rural Americans connected to either standard broadband – with download speeds of at least 25 megabits per second – or a fiber-optic network. We also considered how the policies affected competition, defined as access to two or more providers. We analyzed data from 2012 to 2018 on all 3,143 U.S. counties and focused on the changes in the rural portions of each county since a policy was put in place. We performed a regression analysis to tease out the impact of each individual policy in states that implemented more than one.

We controlled for a variety of characteristics that might also affect broadband availability, such as population density, income and education. We also factored in political ideology, under the assumption that more conservative residents and legislatures are less likely to support a broadband office or funding and more likely to impose municipal broadband restrictions.

Assessing the impact

Overall, rural areas saw an average increase in broadband availability of 47 percentage points, rising from 24% in 2012 – around when many states began implementing policies – to 71% in 2018. Access to faster fiber climbed 16.5 points to 23%.

But these figures varied widely depending on which state a rural American lived in – and what policies were in place.

Having a dedicated funding program turned out to have the greatest positive impact on getting more people in rural areas connected to broadband and fiber. Our analysis found that the policy increased broadband access by an average of 1.8 percentage points compared with states without the policy in place. Gains for fiber were even higher at 2.1 percentage points. The share of counties with access to more than one broadband provider climbed 1.4 points above what would otherwise be expected.

Imposing restrictions on municipal broadband, on the other hand, had a significant dampening effect on internet access. Counties whose states imposed such restrictions experienced broadband access gains 3.7 percentage points less than what they would have enjoyed without the policies in place. Fiber access was 1.6 points less, while the policy had a negligible impact on competition.