Background of the Problem
Technology is a large part of improving and enhancing just about every aspect of our lives from where and how we work, to how we enjoy free time and to other aspects such as smart home technologies. Technology combined with broadband can enhance all areas of life, and the potential for increased connectivity continues as time goes by and technology changes. Just like transportation, roadways, and electricity were at the beginning of the 20 th century; the introduction and hastened advancement in technology, the ability to access abundant, affordable and redundant broadband has become the most precarious infrastructure of our time (Federal Communications Commission GIS Program, 2014)
What exactly is “Broadband”? The Federal Communications Commission (FCC) revised its definition of Broadband in 2015 as; having the ability to download at 25 Mbs and upload speeds of 3 Mbs. Having access to “advanced broadband,” means, at a minimum, having broadband speeds meeting or exceeding the FCC definition (Federal Communications Commission GIS Program, 2014). Unlike dial-up, narrowband voice telephony, and the conventional Internet, a unified broadband setting manages bigger volumes of data, high-speed technology, integrated text, audio, voice, video services, audio, and interactivity. This provides some services including telecommuting, online education, electronic commerce, and telemedicine, by ensuring that they are readily accessible and available to anyone who has high-speed networks. Therefore, broadband internet is more capable of contributing a substantial growth in social development and the economy than narrowband services.
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Approximately 53 % (22 million) of the rural population of America, do not have access to high-speed Internet, as compared to the urban population (8% of the population). Rural populations continue to be underserved at all speeds, the FCC reported in March, and tribal lands are even further behind, with 63 percent of residents (2.5 million people) unable to get online. (“2015 Broadband Progress Report”, 2015) According to research conducted by the FCC in 2016, in America, every 1 in 10 people do not have access to the 25mbps/3 internet broadband. The federal government defines high-speed internet access as at least 25 Mbps for downloading information and 3 Mbps when uploading. In rural regions, it’s exponentially worse, with 40% (23.4 million) of the residents lacking access to 25mbps/3 internet, as compared to the 4 % of the population in urban areas, according to the FCC. This rural/urban disconnect “disproportionately impacts the ability of small businesses operating in rural areas to successfully compete in the 21st-century economy,” (Federal Communications Commission GIS Program, 2014).
Progressive broadband infrastructure is important to communities for economic expansion including job creation, to increase communication at all levels, to enhance public safety, to expand health care opportunities, to provide greater educational opportunities and to support new technologies such as smart home technologies. People can argue that broadband is a requirement for many creative-class employees and entrepreneurs. Therefore, the great levels of broadband access in rural areas could prompt the residents to pursue new business ventures, and attract entrepreneurs from other regions. Ultimately, all communities need access to fast and reliable internet services to be relevant in a world of ever-increasing data and technology demands.
Problem Statement
In the United States, there continues to be a shift in population from rural areas of the country to urban areas as people relocate to find jobs. This is problematic for both the rural areas that try to accommodate the increase in population as well as the rural areas which are facing the decline.
Similar to the issues of providing electricity to rural America during the early 1900’s, providing infrastructure to provide broadband to rural America is cost prohibitive due to the large and diverse areas and small populations in which to recover the cost. According to the study conducted by NECA on the cost of Rural Broadband, the sources of the cost of upgrading to high-speed internet from rural lines have been identified (Glass 2000). The costs of the provision of Digital Subscriber Lines (DSL) and the total transport cost have been identified in the study. According to the study, transport costs are a barricade to providing broadband connections in rural areas, and this tends to rise in regard to the distance from the backbone of the Internet. This means that, transport costs is a major challenge when it comes to providing broadband in rural areas. Furthermore, the study shows that, in small markets, the transport cost for each customer was raised and with an increase in market size, the cost of transport per customer went down up to a certain point and then it flattened in higher market sizes.
Electric Cooperatives may be uniquely positioned to fill the need of rural broadband expansion because they already serve the population in rural areas, have nonprofit organizational status allowing for low-cost operation, have access to low rate financing for necessary infrastructure and have cooperative principles that embrace supporting the communities in which they serve. America's 838 distribution cooperatives provide electricity to an approximately 42 million people in forty-seven states. Their service territories collectively cover 56% of the nation (Powering America, n.d.).
Electric co-ops bring their infrastructure to the table, including network construction experiences, utility poles and existing rights of way that can be used to string fiber and other facilities to deliver service to consumers and businesses.
At the same time, co-ops have found that building out a broadband network over their existing infrastructure can also help them better manage their electrical grid to support next-generation capabilities such as smart grid and more efficient monitoring.
Purpose of the Study
This study examines the impact of broadband on rural America and to develop an understanding of how broadband impacts economic and social factors. As noted, Investigate Electric Cooperatives fill the need of rural broadband expansion because they already serve the population in rural areas, have nonprofit organizational status allowing for low-cost operation, have access to low rate financing for necessary infrastructure, and have cooperative principles that embrace supporting the communities in which they serve.
The low connectivity of seamless broadband is halting economic progress in the various economic sectors in rural America. It is on this note that the study seeks to establish the reason for low penetration of broadband to the regions. The study indicates that the Investigate Electric Cooperatives support investments in broadband, but their level of commitment is not sufficient. According to the current situation, the escalation in the transports costs impeding supplying broadband to the population in rural areas. The expanses of the areas that demand to invest in infrastructure covering extensive mileage discourage progress. The assumption is that the distance increases the costs required for the developments of the infrastructure that serves as the backbone of the internet. As noted, the economic factors affect the possibility of ascertainments of maximum returns in broadband business and such discourages investment in infrastructure.
The low connectivity, in turn, discourages small business indenting to exploit the resources for service delivery. In a situation where the distribution is high, entrepreneurs willing to engage in technological venture increase leading to the creation of employment opportunities. Given that the study seeks to establish if the engagement of electric cooperatives in serving the populations can aid increase supply of broadband, the affirmation of the relation can guide planning for future activities. At present, Investigate Electric Cooperatives only offer financial support to investment in electrical ventures, yet the organization can also bring expertise for the installation of the infrastructure. The cooperatives are capable of assisting in management and monitoring of the grids. In the past few years, the cooperatives played a critical role in helping the technological companies comprehend the needs of the population in the rural areas.
Study’s Hypothesis
The paper will test whether the relationship between capital companies capitals structure and shareholder value maximization affects the status of broadband connectivity in rural America. As hypothesized, the discord is responsible for low connectivity to high-speed broadband in rural America.
The hypothesis suggests that rise in shareholder value will increase connectivity for the benefit other areas of the economy. The strengthening of the company capital structure will automatically inspire to technological advances that benefit the communities. However, at present, there is low connectivity due to lack of corporation between the cooperative that guided electricity penetration and companies intending to supply broadband. The shareholders are not ascertaining the desired value from the decision, and the goodwill of the masses is low. The Federal Communications Commission (FCC) report indicates that the experts in the rural areas should collaborate with corporative administrators to increase stakeholder confidence that will translate to the rise in some telecommunication companies seeking ways for addressing the concern of the population.
Low investments attributable to costs issue and lack of collaboration among stakeholders in the rural areas contributes to the low connectivity of high-speed broadband required for spurring economic and social progress in rural areas.As thing stand, the electric cooperative and the government's collaboration as well as investments the telecommunication value chain is minimal. The people demanding at least 25 megabits per second (Mbps) broadband are not accessing the bandwidth.
Literature Review
The Federal Communications Commission (2012) indicates that the utilization of technology that relies on broadband in communication in rural areas is not a new idea since communities have relied on the resources for years. However, the levels of progression in the reliance on the broadband in communication are below because of the economics of scale. The publication cites that prospectus is high in populous areas. The researchers allude that the shareholder expectation has been low thus contributing to the low levels of investment in infrastructure in the rural areas. Unlike the urban areas where the commitment of shareholder is high, the demarcation of the territories for the infrastructure and other infrastructural requirements discourages the group because of the expanse (Pavez, Correa, & Contreras, 2017).
The community’s laxity of engaging in studies that could guide the companies identify ways for increasing connectivity is also a concern in the area since such affects shareholder value. The view of Glass and Stefanova, on the hand, differs from the reports of Federal Communications Commission on the state of connectivity in rural areas. The reports cite the pattern of broadband connectivity as unpredictable leading to the difficulty in quantifying whether the connectivity in low connectivity in rural areas because of the decline in the speed of broadband.
Jitendara and Kingsley note that that the conservative nature of the population in rural areas contributed to the decline in penetration of the broadband. The empirical study steered by the two indicates that the attitude of users of broadband in rural areas discourages investment in the resource. The demand in populated areas is less and entrepreneurs show less concern for the situation leading to the questioning of whether investments will directly affect the speed of connectivity. Kelsey and Brian write that the case is slightly different in urban areas. The two scholars laud the population is influential in encouraging investments in the resource. They cite the decision of telecommunication companies investing in high-speed broadband at low levels as influenced by entrepreneurs’ action and demand in rural areas. The arguments affirm Glass and Stefanova’s explanation that infrastructural challenges play a role in the investment in the resources. However, Glass and Stepanova explain that the commitments of the communities matter least since demand is inelastic regardless of shareholder value.
Kelsey and Brian in their study on the broadband issue from an entrepreneurial perspective suggest that most of the young person with the technical knowhow affects developments in the use of technology. The decision of the population to establish infrastructure in rural areas can influence the increase in the use of broadband leading to the rise in opportunities. The decision in the long-term will spur creativity of other entrepreneurs and such benefits the rural areas. Tiwari, Lane & Alam states that changing the perception of the experts in rural concerning the undertakings that could spur economic progress is necessary for promoting investments in the technologies. The article adds that the scarcity of the population in rural areas with the expertise for managing the technology is also a concern that affects broadband connectivity in rural areas. The writer alludes that company assumes costs implication in the decisions. The urge to invest where there is the scarcity of expertise is costly, and such formulates the excuse for firms that tend to avoid investments in areas.
According to the view of Jitendara and Kingsley (2012), there is hope in the increase in penetration in the future. They cite a combination of a factor has influenced the trends. The scholar's view opposes the notion that corporative that propelled industries growth in the rural areas is also failing in their obligation to the community. The idea considers dynamics interrelated factors as key to progress in broadband penetration. Federal Communications Commission in their view recommends investment in supportive infrastructure that encourages telecommunication companies to expand to rural areas. Federal Communications Commission believes that Connect America Fund is capable of offering technical expertise in the management of financial resources. The reports of the organization indicate that commissions have helped the business plan on investments in broadband among many other commercial undertakings. The same ideas can translate to the penetration sensitization among investors if explored effectively.
The publishers of the article added that the Connect America Fund could lead the people in the identification of the suitable ways for minimizing expenses in the establishments of the networks. Glass and Stefanova’s express a slightly different view on the role of broadband in the live hoods of masses in the rural areas. The scholars present an article that questions the significance of the resource to investors of business in the rural areas. They hold the view that the meaning of the resources depends on the attitude of the population and not the perception of technology experts championing the investments that encourage the use of the resources in rural areas.
Methodology
The research will exploit mixed methods that engage the use of qualitative approach in the analysis of data. Afterward, the researchers will use the idea will guide the descriptive method in the collection of information about the prevailing situation concerning the use of broadband in the rural area. The intent is facilitating comprehension of the social and economic implication to enable those planning to invest in the technologies identify the suitable way for increasing broadband connectivity in the rural areas. The qualitative approach will commence with an exploration of existing materials about the prevailing situation in the rural areas of the United States. The process will guide the review before the comparing of the findings with the data collected on the ground about the reality in broadband technology. The sources will include scholarly materials that analyze the socio and economic implication of the technology on the progress of the communities.
The descriptive approach will use the survey techniques in the collection for data for analysis to enhance the comprehension of the situation in the rural area. The process will proceed after the identification of the location for the collection of the data (Zegura, Grinter, Belding & Nahrstedt, 2017). The researcher will exploit random sampling techniques in the identification of the participants of the study. The people will respond to the questionnaire administered upon consultations. The questionnaires will seek to engage people from various backgrounds in the collection of findings concerning the state of the use of broadband in rural areas. Close to 50 participants will take part in the process. The researchers will administer the fast batch of questions to a person living in rural areas that include the young and the old. The category of the responded will includes the working class and the unemployed of both genders. The personnel serving at the cooperatives responsible for managing electrical infrastructure and social groups will share information about the prevailing dynamics in the rural areas. Additionally, the design of the study will also accommodate the recommendation of the participants on the ways of planning on investments in broadband supply. After the tabulation of the findings, the researchers will divide the studies in section to enable clarification of the responses.
During data collection, the researchers will administer both open ended and closed ended question, but for the most of the process, the use of open-ended question will steer the process. The subject covered will revolve around seeking undertakings of the people on the significance of the use of the resource for the economic prospects of the community. The redress on the social implications of the resources will apply but not to the extremes since the responses will seek to generalize the view of the masses. The analysis of the information will follow with the categorization of the findings. The ideas in the qualitative material reviewed about the situation in the rural areas will serve as the reference for the data collected using questionnaires. The study will use the mathematical technique in the quantification of the response to establishing the trends in the assertion of the participants. The use of charts and numbers will facilitate the presentation of the information.
References
Chavez, A., Littman-Quinn, R., Ndlovu, K., & Kovarik, C. L. (2016). Using TV white space spectrum to practise telemedicine: A promising technology to enhance broadband internet connectivity within healthcare facilities in rural regions of developing countries. Journal of telemedicine and telecare , 22 (4), 260-263
Conley, K. L., & Whitacre, B. E. (2016). Does Broadband Matter for Rural Entrepreneurs and Employees? Department of Agricultural Economics, Oklahoma State University, USA
Federal Communications Commission GIS Program . (2014). Federal Communications Commission GIS Program . Retrieved 24 November 2017, from https://www.fcc.gov/reports-research/maps/connect-america-fund-caf-phase-i/
Federal Communications Commission. (2012) Eighth Broadband Progress Report. Available at: https://www.fcc.gov/reports-research/reports/broadband-progress-reports/eighthbroadband- progress-report.
Federal Communications Commission. (2014) “FCC Launches Rural Broadband Expansion Experiments,” a news release available online in April 2016 at https://www.fcc.gov/document/fcc-launches-rural-broadband-expansion-experiments
Federal Communications Commission. (2015) “Broadband Availability in Urban vs. Rural Areas” Broadband Statistics Report , available online in April 2016 at https://www.broadbandmap.gov/download/Broadband%20Availability%20in%20Rural%20vs%20Urban%20Areas.pdf.
Glass, V., & Stefanova, K. S. Economies of scale for broadband in rural United States.
Jitendra, P. & Kingsley E. H. (2012). Patterns of Broadband Efficiency in the U.S.
Mark, T. B., Griffin, T. W., & Whitacre, B. E. (2016). The Role of Wireless Broadband Connectivity on ‘ Big Data’ and the Agricultural Industry in the United States and Australia. International Food and Agribusiness Management Review , 19 (A).
Pavez, I., Correa, T., & Contreras, J. (2017). Meanings of (dis) connection: Exploring non-users in isolated rural communities with internet access infrastructure. Poetics , 63 , 11-21.
Tiwari, S., Lane, M., & Alam, K. (2016). Does Broadband Connectivity and Social networking sites build and maintain social capital in rural communities?. arXiv preprint arXiv:1606.03542 .
Zegura, E., Grinter, B., Belding, E., & Nahrstedt, K. (2017). A Rural Lens on a Research Agenda for Intelligent Infrastructure. arXiv preprint arXiv:1705.02004 .
