Businesses in rural America will benefit from a push to bring more broadband internet to 32 states over the coming years after the Federal Communications Commission’s (FCC) recent decision to approve $1.2 billion in funding for the project. This funding will come through the Rural Digital Opportunity Fund. It represents the sixth wave of funding for rural broadband projects.
Businesses of all shapes and sizes could benefit from this broadband expansion. In fact, 17% of American small businesses are based in rural areas, which comprise 97% of the country. Here’s what to know about the business impacts of the FCC’s additional broadband funding.
The FCC will bring additional broadband internet access to more than 1 million locations through 23 broadband providers with this latest round of funding. This initiative is the FCC’s “largest funding round to date,” according to an FCC press release. The funding is part of a plan that would direct $20.4 billion in total toward the expansion of rural broadband internet access over the next 10 years.
Through the Rural Broadband Accountability Plan, the 23 broadband providers will undergo twice as many verifications and audits in 2022 as in 2021. The providers that receive the most funding must undergo an additional on-site audit. Further verifications and audits will also be required for high-risk providers.
A new aspect of this round of funding is that the FCC will publish the results of these audits and verifications for the public to see.
“The new Rural Broadband Accountability Plan will speed up our audit and verification processes and for the first time make public the results of verifications, audits, and speed and latency testing,” said FCC Chairwoman Jessica Rosenworcel. “These new measures will help ensure that the providers we fund in this program will do the job.”
Anyone interested in reviewing the audits and verifications can do so on the Universal Service Administrative Co. website, which will also display the results of the 23 providers’ speed and latency tests.
Did you know? Several of the states with the fastest-growing small businesses have significant rural populations, showing that businesses in rural America make significant contributions to the U.S. economy.
For small business owners in rural America, the introduction of broadband internet could be a significant boon. Most business applications require an internet connection for some features, so a speedier connection should help boost productivity.
John Gard, the president of Wisconsin Independent Businesses, wrote an editorial in 2018 that remains pertinent today amid the FCC’s ongoing rural broadband expansion. In the Green Bay Press-Gazette, he wrote that broadband access was paramount for that state’s small business development and local economies.
“The importance of a safe, reliable internet connection for small business and economic development cannot be understated … As opportunities in the tech industry continue to grow, someone with a knack for computers in Bayfield will have the same opportunities as anyone in the Bay Area so long as they have a reliable broadband connection,” he wrote.
Did you know? Some of the best business security systems rely on a broadband connection to transmit emergency signals.
The internet is the backbone of virtually every small business activity. Rural businesses lacking a strong internet connection could struggle with the below activities in particular.
Here are the answers to a few common questions rural small business owners ask about internet access.
Internet connectivity structures in rural areas have historically been poorly maintained. For example, the insulation around the copper wires that provide internet connectivity may be worn down, or the wires themselves could be frayed. The FCC’s rural broadband internet funding rounds have attempted to address this issue.
Rural small business owners may fare best with a satellite internet plan since it’s highly accessible and affordable. However, satellite broadband can be slow and unreliable. Fiber-optic internet is another viable option, though it’s not available everywhere. That leaves you with cable, but the farther you’re located from a cable service point, the lower your speed will be.
Another option may be 5G home internet. Big-name internet service providers such as Verizon and T-Mobile have been known to offer heavy discounts to incentivize 5G signup. In an Opensignal study in late 2020, some rural 5G internet users reported download speeds of 53.4 Mbps – significantly greater than the 25 Mbps often considered “advanced” service.
Prior to the January 2022 funding round, President Joe Biden had allocated $65 billion for nationwide household broadband access in November 2021. Around the same time, the FCC started a program that provides lower-cost broadband internet access to low-income households. And in 2018, the Connect America Fund Phase II auction resulted in $1.49 billion for internet providers to expand rural access.
Andrew Martins contributed to the writing and reporting in this article.