Study: Ohio Statewide Broadband Office, Investment Fund Could Help Boost Rural Access

A new study from Ohio State University found 31 percent of the state's rural population lacked access to fixed broadband service.

by / May 15, 2017

A recent study by Ohio State University (OSU) researchers found broadband access severely lacking in the state’s rural areas, a deficit they reported could yield significant economic growth if corrected — but if resolved could also lead to other, unintended consequences.

Connecting the Dots of Ohio’s Broadband Policy found that 76 percent of Ohio households had broadband subscriptions in 2015, a share that led neighboring states and lagged just 1 percent behind the national average of 77 percent, according to the U.S. Census Bureau’s annual American Community Survey.

More troublingly, the report from OSU’s Department of Agricultural, Environmental and Development Economics highlighted a disparity between urban Ohio areas, where fixed broadband access is “near universal” and adoption in metro areas ranges from less than 60 percent to more than 90 percent; and rural communities where 31 percent of the population lacks access to fixed broadband — and lives in areas where extending service is “prohibitively expensive.”

Overall, the report found more than 1 million Ohioans still lack access to fixed broadband service.

“It is widely agreed upon that having high-speed Internet access is becoming an essential utility for almost all households and businesses to participate in our economic, cultural and public institutions,” the authors wrote.

The issue is one that a variety of public agencies nationwide are confronting; Riverside County in inland California is currently seeking providers to build a county-wide gigabit fiber-optic network with access for every home and business. 

OSU’s study found Ohio to be well positioned among other states as a regional leader in broadband, with 92 percent of its overall population having access to fixed broadband — slightly higher than the national average of 90 percent and only 2 percent behind neighboring Pennsylvania.

In rural areas, however, that gap widened with 69 percent of Ohioans having access to broadband compared to 80 percent in Pennsylvania. In urban areas, 98 percent of Ohioans had broadband access.

A key reason for high levels of urban broadband access, the authors wrote, is OARnet, an Ohio Department of Education initiative from the 1990s designed to link state colleges and libraries to the Internet — but which has subsequently enjoyed state investment and come to provide services to local governments, hospitals and public schools.

“In terms of rural broadband access, Ohio really lagged Pennsylvania and looked like a state with more rural population density than it has. I think that suggests there are still gains to be made for Ohio,” study author Mark Rembert, a doctoral student and graduate research associate for the Swank Program in Rural-Urban Policy at OSU, told Government Technology.

“I think it all really comes down to costs," he added. "The telecommunication companies are going to be sort of evaluating expansion on a cost-benefit analysis."

Stu Johnson, executive director of Connect Ohio, which advances and advocates for broadband access, adoption and use, pointed to the author’s statement calling high-speed Internet an “essential utility” as more proof that its necessity is harder and harder to debate.

He praised the report for considering the economic aspects to expanding broadband instead of merely focusing on quality-of-life issues — and agreed with its assertions that “adoption matters more than availability,” and that access alone may not boost employment numbers.

“The real interesting equation will be, what will be the cost if you do nothing? Because if you overlay where broadband access is not available and adoption is below standard … you see higher unemployment, stagnant or decreasing household incomes and population migration,” Johnson said, agreeing providers may not achieve a return on investment if they extend broadband into areas with low adoption rates.

The OSU authors recommended the state consider five policies to accelerate broadband expansion while minimizing cost to the public:

  • Establish a state broadband office to coordinate expansion.
  • Adopt a “dig once” policy that would integrate broadband facilities into major construction projects.
  • Strengthen public-private partnerships so public infrastructure can be used to expand broadband access without leading to an anti-competitive climate.
  • Establish a broadband investment fund to finance infrastructure to reach unserved areas.
  • Promote development of local government policies that ease the “last mile” of broadband provision, traditionally one of the costliest parts of a project.

State Rep. Ryan Smith, R-Bidwell, said he represents a southeastern area of the state that includes hilly Appalachian areas where high-speed Internet is nonexistent. Smith estimated his district’s percentage of residents with broadband access would be lower than 69 percent — likely somewhere around 50 percent.

“I think adoption’s pretty high where it’s offered, but it’s just not offered that many places. In today’s day and age, what I would say is broadband has become basic infrastructure,” Smith told Government Technology, comparing the situation to that once faced in eastern states before groups like the Tennessee Valley Authority brought electricity to rural areas.

“If you don’t have high-speed wireless broadband, if you can’t check that box, you’re not going to get that business and you’re not going to keep the 20-somethings,” said Smith, who found “some validity” in each of the study’s five recommendations — especially the ideas of a state broadband office and investment fund. Balancing broadband’s cost-prohibitive nature, he said, could attract larger providers.

The authors of the study conservatively estimated that if Ohio reached full broadband coverage “today,” doing so would generate “between $1 billion and $2 billion in economic benefits over the next 15 years.”

But they also found that “broadband’s contribution to economic development in rural regions is often overstated” — offset by the fact that high-speed Internet can foster competition with local businesses and fuel outsourcing of jobs.

“If rural workers do not have the necessary skills to enhance their productivity using information technology, then broadband is less likely to generate the same level of economic benefits as in urban areas,” they wrote.

“It’s hard to say empirically whether the household gains exceed the job loss costs, but my guess is they probably do,” Rembert said, emphasizing that the findings shouldn’t deter an expansion but rather motivate lawmakers to work at offsetting these issues.

Smith said he could see how technology-driven efficiencies could outsource existing jobs, but pointed out the spread of the Internet has created new opportunities as well. Connect Ohio’s Digital Works program, he said, has retrained residents with felony opiate convictions — finding those with broadband access remote work in virtual call centers.

“For so long nobody wanted to locate business in rural areas,” Smith said, “but the Internet flattens that issue.”

Theo Douglas Staff Writer

Theo Douglas is a staff writer for Government Technology. His reporting experience includes covering municipal, county and state governments, business and breaking news. He has a Bachelor's degree in Newspaper Journalism and a Master's in History, both from California State University, Long Beach.