Rising Broadband Demand: Impact on Rural Economic Development

Current State of Rural Broadband Infrastructure

Rural broadband infrastructure is improving with significant expansions by companies like Comcast and AT&T, supported by federal programs like the RDOF. These efforts are enhancing connectivity for telehealth, education, and remote work, addressing previously unserved or underserved rural areas.

"Today, @SecYellen joined our team for a tour of the recently completed rural broadband expansion with @staffordvagov in #Virginia, bringing high-speed, reliable Internet to nearly 700 previously unserved homes." --- (CMCSA, Twitter post, 2024/05/13)

"In addition to that, when you provide rural broadband to a community, it's not just the connection you provide, you're providing connectivity to telehealth, you're providing connectivity to education opportunities, You're providing the ability for someone who sometimes works from home or who has a child who might want to do education from home to buy homes in that" --- (CHTR, conference, 2024/05/22)

"Federal Broadband Support Programs In January 2020, the FCC created the Rural Digital Opportunity Fund (“RDOF”) program, a federal support program designed to fund broadband deployment in rural America." --- (LUMN, sec filing, 2024/Q1)

"Since 2021, AT&T has won competitive bids for funding to deploy more high-speed fiber broadband in 12 states including California, Louisiana and Texas." --- (AT&T, press release, 2024/04/04)

"We're working to bring our next-generation broadband network to as many Americans as possible, including rural areas that have been unserved or underserved." --- (CMCSA, Twitter post, 2024/04/30)

Economic Benefits of Broadband Access in Rural Areas

Broadband access in rural areas drives economic benefits by enabling new opportunities for creation, connection, and learning (AMZN, MSFT). Initiatives like Project Kuiper and Microsoft Airband aim to close the digital divide, fostering economic growth through improved digital infrastructure and high-speed internet access (AMZN, MSFT).

"Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers, including expenditures related to initiatives to build and deploy innovative and efficient software and electronic devices and the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services." --- (AMZN, sec filing, 2024/Q1)

"Through the Microsoft Airband initiative, the company collaborates with public, private and nonprofit organizations to bring high-speed internet access to rural communities across America and build the digital infrastructure required for internet access and adoption." --- (MSFT, press release, 2024/06/10)

"Hundreds of millions of people lack adequate internet access and Project Kuiper's goal is to help close the digital divide by delivering fast, affordable broadband to a wide variety of customers operating in places without reliable internet connections." --- (AMZN, press release, 2024/05/29)

"What a great example of how this next generation of AI is already creating new economic opportunity everywhere, including in rural communities like Inishbofin." --- (MSFT, Twitter post, 2024/06/17)

"Working with Vrio to bring affordable access to broadband means we can enable so many more people to create, connect, and learn in new ways. Project Kuiper's mission is to deliver fast, affordable broadband to areas that have traditionally been difficult to reach, said Rajeev Badyal, vice president of technology and head of Project Kuiper at Amazon." --- (AMZN, press release, 2024/06/13)

Challenges in Deploying Rural Broadband Infrastructure

Rising construction labor costs, the need for extensive access point deployment, and efforts to eliminate connectivity gaps highlight the significant challenges in deploying rural broadband infrastructure. Despite these hurdles, companies are leveraging programs to enhance fixed broadband capabilities and seeing increased adoption in rural markets.

"The resulting increase in construction labor rates increased the cost of enabling units to be capable of receiving our fiber broadband services." --- (LUMN, sec filing, 2024/Q1)

"And our converged connectivity product set is poised to get better through speed upgrades and over 43 million access points, which will grow with our own and our partner's ongoing WiFi router and CBRS access point deployment." --- (CHTR, earning call, 2024/Q2)

"Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today's five billion mobile subscribers and finally bring broadband to the billions who remain unconnected." --- (VZ, press release, 2024/05/29)

"But I feel good about how we went about using the program. I think we used it consistent with the way that policymakers probably would have liked to have seen it used, which is to over index more than anything else on fixed broadband capabilities." --- (T, earning call, 2024/Q1)

"On gross adds, we see about 9 basis points gross add strength. And as we deploy suburban and rural gross adds are up threefold in those markets." --- (VZ, earning call, 2024/Q2)

Government and Private Sector Initiatives

Government and private sector initiatives are driving broadband expansion in rural areas. Lumen Technologies and Charter Communications are actively involved in public sector projects and subsidized rural construction initiatives, respectively. AT&T's remote Smart Health clinics and Verizon's SD WAN technology further illustrate the collaborative efforts to enhance connectivity and economic development in these regions.

"Public Sector: Under our public sector sales channel, we provide our products and services to the public sector, including the U.S. Federal government, state and local governments and research and education institutions." --- (LUMN, sec filing, 2024/Q1)

"The subsidized rural construction initiative subcategory includes projects for which we are receiving subsidies from federal, state and local governments, excluding customer premise equipment and installation." --- (CHTR, press release, 2024/07/26)

"Fabrizio Pacifici, President and Legal Representative of the Foundation, said: 'We believe rural and disadvantaged populations who use the UniDoc remote Smart Health clinics will benefit from this collaborative effort which will then lead to accessible, equitable and inclusive healthcare for all, regardless of location or socioeconomic status.'" --- (T, press release, 2024/06/04)

"SD WAN also allows government agencies and other organizations to offload Internet-bound traffic, which means private WAN services remain available for real-time and mission-critical applications." --- (VZ, press release, 2024/04/09)

"A great example is within our public sector business, where we recently won a $73 million contract to transform the U.S. Government Accountability Office's network, data, voice and video connectivity so the agency can better serve Congress and the American people." --- (LUMN, earning call, 2024/Q1)

Role of Broadband in Rural Education and Healthcare

Broadband is essential for rural healthcare, enabling cybersecurity measures to protect hospitals, supporting cybersecurity training programs, and facilitating advanced medical imaging and AI applications to improve healthcare delivery and efficiency.

""Rural hospitals are often the primary source of healthcare in their communities, so keeping them open and safe from cyberattacks is critical."" --- (MSFT, press release, 2024/06/10)

"Starting today, the new @Microsoft Cybersecurity Program for Rural Hospitals will provide cyber security training, support, and technology services for rural hospitals serving more than 60 million Americans. https://t.co/7iQFs6tDDw" --- (MSFT, Twitter, 2024/06/10)

"Medical imaging plays a crucial role in healthcare. Health systems spend an estimated $65 billion each year on imaging, and approximately 80% of all hospital and health system visits include at least one imaging exam related to more than 23,000 conditions. Faced with challenges that the overall healthcare industry grapples with, including physician burnout and staffing shortages, healthcare organizations are looking to generative AI to help reduce workloads, enhance workflow efficiencies, and improve the accuracy and consistency of medical image analysis for care delivery, clinical trials recruitment and drug discovery." --- (MSFT, press release, 2024/07/24)

Impact on Local Businesses

Rising broadband demand is enabling local businesses to reach more customers and grow their online presence (AMZN). Google's local training initiatives and expanded inventory ads are driving offline sales and shopper confidence (GOOG). Microsoft's community fund supports under-resourced areas, potentially boosting local businesses (MSFT).

"https://t.co/Gyg53FnDCl will open up new opportunities for local #businesses across #SouthAfrica and our focus remains on enabling them to reach more customers and grow their online digital presence." --- (AMZN, Twitter post, 2024/05/08)

"Today at #GoogleForBrazil, we shared our latest economic impact, local training initiatives and new products and features coming to Brazil on Android, Search and more. Learn more → https://t.co/ypPO4TRFYY 🇧🇷" --- (GOOG, Twitter post, 2024/06/11)

"As part of this work, Microsoft and National Grid will jointly contribute $20 million over the term of the agreement to a community fund to support under-resourced communities and communities disproportionately impacted by pollution." --- (MSFT, press release, 2024/05/08)

"Faster delivery times have another important effect. As we get items to customers this fast, customers choose Amazon to fulfill their shopping needs more frequently, and we can see the results in various areas, including how fast our Everyday Essentials business is growing and the continued increase in Prime member purchase frequency and total spend with us." --- (AMZN, earning call, 2024/Q1)

"We also expanded local inventory ads into 23 countries, helping drive shopper confidence and offline sales." --- (GOOG, earning call, 2024/Q1)