Government Internet Service Funding to Benefit Rural Areas

woman sitting on sofa while looking at phone with laptop on lap

The American Rescue Plan includes billions of dollars to expand access to high-speed internet service.

Los Angeles and other cities have complained that the criteria unfairly exclude them from that money.

The American Rescue Plan

The American Rescue Plan Act of 2021 is a $1.9 trillion stimulus package. It includes $350 billion that state and local governments can use in recovering from the COVID-19 pandemic.

Much of this funding is earmarked for investment in broadband, water, and sewer infrastructure. Closing the digital divide has been a focal point for the Biden administration.

Lockdowns forced more people to work and attend school remotely, and the lack of access that many Americans deal with really came to the forefront.

The Digital Divide

Having access to the internet is important, and the digital divide refers to the gap between those who have access to it and those who do not.

There are two core aspects to the digital divide: the affordability gap and the availability gap.

The affordability gap refers to the issue of where internet access is available but not affordable for low-income residents, and this problem exists in both rural and urban areas.

The availability gap refers to the challenge of broadband internet simply not being available, and this is generally viewed as a problem for rural America since most cities have broadband.

Cities and the Availability Gap

Broadband Internet is defined by the Federal Communications Commission as at least 25 Mbps download and 3 Mbps upload.

Many feel that this benchmark is now outdated, and the FCC essentially recognizes that with the estimate that the average U.S. home needs 100 Mbps download.

The ARP funds available for expanding broadband are granted based on the FCC benchmark.

Since most cities have access to 25 Mbps download, they are excluded, and cities like Los Angeles, Milwaukee, San Antonio and so forth have filed complaints with the Treasury Department.

These complaints are based on the assertion that their citizens lack access to Internet that is good enough from a modern standard.

There are also complaints concerning how areas are evaluated. One example concerns a Maine island where the internet service is approximately 5 Mbps download and less than 1 Mbps upload.

But since the island is included in a mainland area with fiber optic internet, funding is not available.

Arguments For and Against

Local governments in urban areas have a legitimate criticism that the FCC definition of broadband is outdated, and they are not alone in that analysis.

However, making the argument that they are as deserving as rural communities where high-speed internet is unavailable is difficult.

The challenges that faced rural communities in having children attend school online were enormous compared to those in cities.

That is not to say that the cities did not face challenges as well. They did, but not as great.

The Importance of Rural America

There is another issue here that is the importance of rural America to the U.S. economy moving forward.

Economists warn that rural communities will be vital to the health of the U.S. economy over the next 50 years. Investment in rural Internet access will improve the economy by $100 to $150 billion per year over that span.

It was also helping to overcome the shortage of tech workers in the country, and shifting money to urban centers could undermine this growth in a significant way.

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