Broadband Access to the Internet and Economic Development in Northeast Louisiana

Linda Benedict  |  8/26/2008 1:18:54 AM

Broadband table

James Barnes, Dora Ann Hatch and Glenn Dixon

Access to broadband technology in rural areas remains limited. In the United States, broadband refers to the set of technologies that provide a connection to the Internet, such as phone lines, satellite, fixed and mobile wireless and cable. The February 2006 Pew/Internet and American Life Project reported that only 24 percent of rural Americans have a broadband connection at home compared to 39 percent of urban and suburban residents. Further, adoption of broadband technology in rural areas continues to lag. Between 2001 and 2005, U.S. home adoption of broadband services in urban and suburban areas grew by 30 percent. However, adoption in rural areas grew by only 21 percent. Less access to and lower adoption of broadband inhibit significant economic opportunities for rural Americans. Unfortunately, these same trends hold true for rural Louisiana.

Rural-Urban Gap
Gathering information about broadband Internet infrastructure in the United States remains, at best, a work in progress. The Federal Communications Commission (FCC) requires Internet providers to submit data on customers served, technologies available and other aspects of broadband coverage by zip code twice a year.

In a March 2008 report, the FCC reported a positive relationship between consumers living in zip codes with high median household income and subscription to high-speed broadband services. Broadband technology adoption is higher in zip codes where income is high and lower in zip codes where income is low. Although high-speed subscribers were present in 99 percent of the top one-tenth of zip codes ranked by median household income and 92 percent of zip codes with the lowest median household income, the gap could be significantly wider. The FCC reports service to a county or parish as available if one subscriber in the county or parish has high-speed service; that is, if one resident has high-speed broadband service in West Carroll, then the service area of West Carroll Parish will be denoted as having broadband services available for the entire parish. This could be misleading. Access for one does not necessarily mean access for all.

Besides household income, other economic incentives affect the gap in service between rural and urban subscribers. According to the Government Accounting Office (GAO), the cost of providing rural service is prohibitive because of too few rural customers. Fewer customers raise the cost of running the provider business, and this dilutes provider incentives to service rural areas. Providers have a stronger incentive to invest resources in serving larger, urban markets rather than rural markets.

The GAO reported that information about existing provider services does not provide an accurate landscape of the broadband infrastructure. Zip code data provided by the FCC reveals some aspects of service but more data are needed. Providers do not have reliable information on the number of potential customers in rural areas. This gap encourages providers to continue to invest their limited resources in larger, urban markets in which economies of scale in marketing and advertising can be achieved.

Broadband Infrastructure
In rural Louisiana, the task of identifying broadband service gaps remains a significant challenge, one shared with other rural areas across the United States. Access to broadband service is difficult to assess, according to a July 2005 report by the State of Louisiana Broadband Advisory Council. One reason cited was companies submitted different types of spatial data regarding broadband capability. The report produced maps of service areas in Louisiana based on telephone, cable and satellite providers. Other technologies such as wireless and broadband over power lines were not examined in the report.

The key technology mapped for telephone companies was broadband service capability for asymmetric digital subscriber line (ADSL). Digital subscriber line (DSL) is a family of technologies that transmits data over the wires of a local telephone network. ADSL is a form of DSL that transmits data faster over copper telephone lines. Asymmetric means uploading data is slower than downloading; symmetrical DSL or SDSL means upload and download speeds are equal. Download speed is usually given in kilobits per second.

Service capability means these providers have infrastructure (phone and cable lines) that could be or currently are being used to supply ADSL service. However, the report does not discuss if any investments in infrastructure need to be made to upgrade the delivery of higher speeds of broadband service. Also, service capability does not necessarily mean consumers have adopted broadband services. At best, the report identifies areas where infrastructure is in place, but subscriber adoption rates across the state were not identified.

For satellite coverage in rural Louisiana, the report concluded that virtually the entire state has coverage because an unobstructed view of the southern horizon is accessible. However, because the broadband advisory council did not receive data from wireless companies for its report, the exact nature of tower locations and range of wireless signals and their associated strengths were not identified.

A total of 38 cable providers submitted data via the Louisiana Cable and Telecommunications Association (LCTA). LCTA membership provided capability data based on zip codes served.

Twelve telephone companies submitted data to the broadband advisory council. They included BellSouth and independent phone companies (ICOs). According to the council’s report, among the 12 telephone providers that submitted data, BellSouth submitted data that most accurately reflected ADSL service. ISOs reported ADSL service per zip code. Since ICOs and cable providers submitted data based on zip codes, broadband coverage estimates must be interpreted with caution.
 
Louisiana Delta Perspective
Data from the broadband advisory council’s July 2005 report are not publicly available. However, the analysis in Table 1 attempts to quantify some of the broadband coverage implied by the report for northeast Louisiana, including the parishes of West Carroll, East Carroll, Madison, Tensas and Franklin. These parishes are among the persistently poverty-stricken parishes in Louisiana and frequently referred to as the Louisiana delta region.

Based on a comparison of average household income and estimated service capability per provider, there appears to be some support for the idea that as household income increases so too does access to a more capable broadband infrastructure (Table 1). For example, West Carroll and Tensas parishes have the highest average household income at $38,109 and $42,183, respectively. Both parishes have access to a more capable broadband infrastructure compared to Franklin, the parish in this region with the lowest household income at $21,263. The same comparison holds true for the other lower household income parishes as well, such as East Carroll.

The idea that a rural-urban gap in broadband service availability and adoption exists seems well-established by many studies. Based on this analysis, it’s also possible that even among mostly rural, persistently poverty-stricken parishes in Louisiana, access to broadband infrastructure varies with household income.

Moving Rural Louisiana Forward
Not much is known about the broadband infrastructure in the United States, urban and rural areas alike, and especially when comparing phone, cable and other technologies such as wireless. In Louisiana, much work lies ahead to identify the real gaps in service and move beyond using zip code data to do so. The bright spot is Louisiana, and particularly rural Louisiana, can learn from other initiatives and approaches to expand broadband deployment in other states. For example, rural Kentucky was able to expand broadband deployment from 25 percent to 95 percent with the help of a nonprofit organization called ConnectedNation (http://www.connectednation.com). This nonprofit gathered the broadband coverage data from all providers, then provided coordination of the mapping project using an e-community team. The team worked with communities to develop a strategic plan for broadband deployment, including matching potential rural customers with existing access points in the broadband infrastructure. The ConnectedNation organization initially worked in Kentucky to help connect rural areas and now has also worked in Ohio, West Virginia and Tennessee.

Future Plans
According to a recent study entitled “Blue Print for the Rural South: Discovering New Ideas, Applying New Strategies” by the Southern Rural Development Center, the economic foundation of rural America has experienced dramatic changes over the past two decades making it increasingly important for rural businesses to use e-commerce strategies to strengthen their economic health and stability, improve their market share and catapult the efficiency of their products and services. However, encouraging the creation of new, rural-based e-businesses will require an effective and efficient broadband infrastructure. But until the state of Louisiana can develop a reliable grid of existing broadband infrastructure in rural areas, rural e-business growth will be slow.

The LSU AgCenter has begun responding to the infrastructure issues related to broadband in two ways. First, the LSU AgCenter has hosted two meetings whereby ConnectedNation officials visited with local government officials, broadband providers and elected officials in Louisiana. Initial discussions hinged on discussing success stories and discussing the same approach used by the ConnectedNation model to assess the broadband infrastructure in Louisiana. Second, LSU AgCenter faculty at the Delta Rural Development Center in Oak Grove have begun a broadband infrastructure project called Connect Carroll. The purpose is to develop a map of broadband coverage for East and West Carroll parishes, including the identification of cable, telephone, satellite and wireless capabilities. The next step will be to bring together private and public resources to improve the infrastructure.

Improving the broadband infrastructure in rural Louisiana will require collaboration among local governments, private corporations, institutions and economic development organizations to make e-business growth a viable economic development strategy for rural Louisiana.

James Barnes, Assistant Professor in the Department of Agricultural Economics & Agribusiness and Director of the Delta Rural Development Center in Oak Grove, La.; Dora Ann Hatch, Rural Development Agent in North Louisiana, Homer, La.; and Glenn Dixon, Associate Agent in East Carroll Parish, Lake Providence, La.

(This article was published in the summer 2008 issue of Louisiana Agriculture.)
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