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Digital Divide Threatens Rural Areas

We are facing a growing divide between those with frequent and immediate access to information and those without. As people live and work outside the high-speed technology sphere, they lose access to valuable markets and vital information which addresses a broad range of issues necessary to a healthy society: health, education and political awareness.

This “digital divide,” while socioeconomic in many respects, also separates those in rural areas from those in urban. In Idaho, most who live in rural areas have limited access to electronic information sources, specifically broadband. These so-called underserved

markets in Idaho and across the country must be brought into the 21st century the same way that rural areas in the 1930s became “connected” to the nationwide telephonic system. In 2004, the International Telecommunications Union placed the United States at 16th across the world in broadband penetration, measuring subscriptions per 100 inhabitants. Obviously, we have some work to do in this area to stay competitive in the global economy.

Increased access to information by all members in a society ultimately benefits the society as a whole by generating a better educated electorate, greater access to markets and subsequent healthier, more competitive economic conditions. Broadband is, in the political sense of the word, a public good; all of society benefits when this technology is expanded universally. This technology comfortably fulfills both requirements of a public good as well as a justification that it be, at least initially, provided by the general public. It is too costly to provide to one person while excluding someone else, and one person’s use of it does not diminish another’s. The challenge arises, not in the discussion of whether broadband is a public good; rather, the challenge lies in developing ways to provide federal incentives without throwing rural broadband service providers to the wind of uncertainty that is long-term federal funding.

One way to solve the dilemma is to look at broadband in the historical context of telecommunications and power production and distribution. Rural utility services were initially launched by the federal government, but when deregulation occurred, the private sector took over. Products and services were free to respond to market forces, providing consumers with more affordable power and telephones. Clearly, legislation that promotes universal broadband services and assumes in the long term that these provisions are temporary is better for both the economy and the consumer. Furthermore, the high cost of infrastructure investments needed from private industry to develop this technology requires initial federal support, but this cost can be expected to transition away from government funding down the road. This plan also makes application and adjustments more responsive and flexible to local needs as market forces enter. A top-down, command and control environment produces solutions not appropriately tailored to the needs of individual markets and communities. Government certainly has an oversight role when taxpayer money is being spent, but the most efficient expenditures occur when those directly affected by the regulations participate in creating those rules and requirements.

Legislation being considered this Congress will take us toward this preferable solution to the problem of rural underserved broadband markets. In the sense that broadband meets the requirements of a public good, it is appropriate that federal laws ensure a timely, fair and universal expansion of this vital technology. There are creative ways to allocate federal dollars toward the goal of universal access, some of which the administration recently called for. These include enacting a ban on broadband access taxes, increasing the spectrum for wireless broadband, and providing rights-of-way on federal land for broadband providers. This last provision is especially important in Idaho, where two-thirds of the land is owned by the federal government. There are outdated regulatory burdens that, if eliminated, will encourage development.

Encouraging the market from the demand side makes sense as well. Recent innovations in telehealth have made a hugely positive impact on rural health care. Distance learning has boomed and as more people find access to education at their fingertips, society benefits from individual intellectual growth. Legislative mechanisms that support development of these technologies are important and deserve our attention.

A healthy federal broadband incentive package for rural communities includes a mix of loans, loan guarantees, tax incentives and grants. I have supported legislation that encourages these financial development tools, such as allowing expensing of broadband Internet access expenditures. In 2003, three Idaho communities were able to benefit from Rural Broadband Technology Grants under the Agriculture Department. The Rural Utilities Service has established a broadband grant pilot program which issues grants to companies who provide broadband service to communities of under 20,000. The Fiscal 2005 Consolidated Appropriations Act (P.L. 108-447) provides $9 million for broadband grants. In its fiscal 2006 budget proposal, the administration proposes $359 million in direct and guaranteed loans. Using these and other similar fiscal incentives will expand broadband to the so-called “last mile,” while encouraging entrepreneurship that will help communities by growing jobs, and increasing connectivity to the information world.

It is possible to bridge the “digital divide” while exercising fiscal restraint and employing responsible long term planning to promote the eventual privatization of broadband services. As we make our way through the information age, we can utilize technological advances to make our economy stronger and our society better educated, better informed and ultimately healthier.

Sen. Mike Crapo (R-Idaho) is chairman of the Agriculture, Nutrition and Forestry subcommittee on forestry, conservation and rural revitalization.

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