Fiber-Fed Broadband Will Heal the Digital Divide. Here's What You Need to Know.

This year will see a wave of communication funding in the U.S. like never before, including high-speed broadband build-outs for thousands of underserved and/or rural communities -- a game changer for the economy and the future.

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By Cheri Beranek

Opinions expressed by Entrepreneur contributors are their own.

According to the data aggregation company BroadbandNow, an estimated 42 million Americans still have no access to broadband Internet service, most of them in rural areas. Without the speed, latency and reliability of the fiber-fed networks being deployed in cities, the rural economic divide will likely continue to widen. At the same time, a 2021 Deloitte study found that a 10% increase in broadband access in 2014 would have generated more than 875,000 additional jobs and $186 billion in economic output in the U.S. by 2019. Another 10 megabits-per-second (Mbps) faster average speeds in 2016 would have added 139,400 new jobs.

With broadband entering its largest investment cycle ever, a community's economic survival will increasingly depend on its Internet, and only fiber optic-based solutions will be enough to compete.

A "make or break" proposition

High-speed broadband can have a profound economic impact, but so can an absence of it, particularly in underserved communities. In 2021, Pew survey data found about 40% of American adults making less than $30,000 a year had no access to such service. Economists determined that communities with access to high-speed broadband of one gigabit-per-second (Gbps) had a statistically significant lower rate of unemployment than those without it. Experts have further identified a lack of high-speed broadband as one of the three common elements contributing to low-income zip codes, and they found that its availability would facilitate improvements in the other two elements (education and income) and help close what's been termed "the digital divide."

Often, small communities call companies for broadband deployment hoping to keep businesses from leaving their areas. As people migrate to the cities looking for better jobs, rural businesses struggle to survive. Over the past two decades, this brain drain has drawn highly skilled workers away from any area with no means of reliable communication. And as jobs go remote, people can live in the country and still take high-paying positions in coastal cities, which means businesses in small communities will have an even harder time retaining and attracting talent. As high-speed broadband becomes more available, communities that don't have it today are going to go down the brain drain faster tomorrow.

Related: Why Remote Work Can Help Bridge the Hiring Gap, Especially for Rural Professionals

Broadband necessity has become crystal clear

With just a device and a quality broadband network, people have easy access to modern services, distance learning and remote jobs, but without either, surviving will be much more difficult. The pandemic sent even more of our everyday companies online, but two to three million small businesses still lack broadband access, according to a 2021 report from the United States Government Accountability Office. In a person-to-person retail environment, they could get by without it, but once things went remote, they had no opportunities to build and maintain an online presence. Even basic business operations like ordering supplies, hiring and training workers and payroll processing have increasingly moved online, making broadband a necessity to stay competitive.

The pandemic accelerated how critical this is for the modern economy. As researchers start mapping this data to determine which communities need access, the digital divide becomes increasingly visible. With the highest poverty rates of the state, Apache County, Arizona would benefit significantly from such access, but the region stands out in the state's northeast corner, with only 5% usage. The high cost of building out infrastructure and a lack of customers who can afford it has kept providers from rolling out services in rural areas like these; unless communities and governments can work together to incentivize build-outs, providers will continue to seek more lucrative zones for networks.

Related: How the Pandemic Rapidly Transformed the Slow-Moving Telco Industry

Success stories

Even as small communities without broadband have been drained of their economies, there have also been stories of achievement for those with it. Rural America was hit hard by the pandemic, but some residents who lost income turned to Airbnb, in the process earning more than $200 million in June 2020 alone as well as drawing tourists, whose local spending supported more than 300,000 community jobs.

Other areas are using broadband to draw in new residents. Bemidji, Minnesota, with a population of 15,000, is attempting to capitalize on its fiber-optic network with Relocate 218, an incentive program to draw more remote workers that includes a free co-working space and a $2,500 reimbursement for moving expenses.

Success has also come as a result of communities forming creative partnerships. Residents in the town of Olneyville, Rhode Island had the highest rates of poverty and the lowest in-home rates of Internet access in the state. When the pandemic hit and started exacerbating that divide, it partnered with nonprofits, private companies and neighboring cities to launch a wireless initiative. Cincinnati, Ohio and Shrewsbury, Massachusetts found similar broadband success by partnering with neighboring cities and organizations. The takeaway is that when businesses start moving out of areas because of a lack of connectivity, communities can rally together and draw them back.

Related: 3 Lessons I Learned About Work Ethic From Milking Cows With My Father Every Evening

Looking to the future

The year 2022 will see a wave of communication funding like never before. In January 2022, the U.S. Treasury Department made $10 billion available for states through the American Rescue Plan, which emphasizes broadband infrastructure in unserved and underserved communities. The states can also expect another $100 million from the Infrastructure Investment and Jobs Act. According to Commerce Secretary Gina Raimondo, this will be a "massive undertaking" and distributing associated dollars could take a while, but once this flood of funding hits, even the smallest towns will become accustomed to the sight of construction crews laying fiber.

In the recent past, the latest in high-speed broadband was digital subscriber line (DSL) service that used coaxial copper and modem over-telephone lines. Today's faster option is fiber optic cable, which offers several additional advantages, including eliminating the need for mining and processing copper, which is expensive and harms the environment. DSL also costs more, is harder to install, and is more susceptible to corrosion than fiber optic strands, which are made from sand, consume less power and have lower overall maintenance costs. Studies have further found that fiber provides the necessary infrastructure to create jobs and fuel economies in rural America and scores higher in capacity, reliability, latency and customer satisfaction than any other broadband technology.

Clearly then, high-speed broadband of the future is all about fiber optics, and with it will come greater economic choice. More than just deciding which movie to stream or product to buy, people will start to live wherever they choose rather than where they need to be and will choose jobs they want instead of taking whatever's available. In fact, the whole concept of "choice" will take on a new meaning as more of our life goes online and it is made easier to access.

Related: 50 Work-From-Home Jobs Paying as Much or a Lot More Than the Average American Salary

Cheri Beranek

Entrepreneur Leadership Network Contributor

CEO of Clearfield

Cheri Beranek is the CEO of Clearfield and a 2021 Minnesota Business Hall of Fame inductee. Under her leadership, Clearfield has grown from a concept to a market cap of more than $500 million, providing optical-fiber management and connectivity solutions across North America.

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