The study, conducted by two University of Texas professors, was commissioned by the Appalachian Regional Commission to gauge the availability and use of telecommunications in the 200,000-square-mile region.
The study, released Tuesday, incorporates data from the FCC, a review of state regulatory policies, interviews with service providers and local case studies.
"This study demonstrates how crucial information and communications technology is to economic development," said Jesse White Jr., co-chairman of the ARC. "We need to pay attention to the lessons it draws for us so that Appalachia will not be left behind, the way it was when the interstate system bypassed the mountains. It has taken over three decades and billions of dollars to remedy this deficit. We still have time to ensure that this does not happen again with the telecommunications infrastructure."
This year, Congress reauthorized the ARC for an unprecedented five years, with a recommendation that funding for non-highway projects such as Internet access and entrepreneurship programs be increased by $10 million.
"The current status quo is clearly unacceptable," said Gov. Donald Sundquist, R-Tenn. "Appalachia should have the same access to telecommunications as any other region of the United States."
Among the studies' findings about Appalachia:
- The rates of home computers, Internet access and even basic telephone service is lower than the national average.
- Lower-cost broadband technology favored by small- and medium-sized businesses is not widely available. Many telecommunications providers' central offices are DSL ready, but many are not yet offering such services. More advanced technologies are not in the immediate future for the region's rural areas.
- Businesses have difficulty understanding and evaluating technology needs and choices, integrating new technology into their business plans, and implementing new technologies in ways that improve competitiveness. This lack of information, combined with access barriers, limits the effective adoption of information technologies and services across Appalachia.
- Affordable advanced telecommunications is a significant barrier to economic development. Rural broadband access for business can cost up to $2,500 a month, while access in urban areas can cost as little as $150 per month. There are few competitive pressures for the pricing of telecommunications services. Nine Appalachian states have average loops costs that exceed the national average.
- Employment in information technology industries grew just 46 percent compared with the national rate of 53 percent.
- Locally based manufacturing, service and trade sectors have been stifled by technology barriers. In manufacturing, branch plants have largely relied on parent companies to provide access in training, leaving small- and medium-sized businesses at a disadvantage.
- Limited telecommunications access and use is a problem for the health-care sector in rural communities. Both larger hospitals and rural health clinics have difficulty getting broadband access to offer new telemedicine services and meet the administrative demands of major provider networks.
Among the studies' recommendations include expanding technical assistance to small- and medium-sized businesses; encouraging communities to improve their bargaining power with telecommunications providers; monitoring state regulatory efforts to leverage improvements in infrastructure and service; supporting demonstration projects with alternative technology providers and the expansion of public institutions' roles in offering broadband access.
The research was conducted by Texas professors Sharon Strover and Michael Oden.
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