Overview
This Briefing Room provides an overview of the issues about
the market penetration of communication and information
services, what is determining market penetration, government
telecommunication policy, and the suitability of various
technologies in rural regions. A quarter of a century has
passed since the break-up of AT&T tried to separate
the provision of telecommunication infrastructure from the
rest of the telecommunication industry. While the underlying
economic theory of service provision for the new telecommunications
has not changed, communities still must have a given level
of demand in order to have a given level of advanced telecommunication
service, the determination of demand has changed. No longer
is it simply a telephone system that provides voice communication,
it is now an evolving system which provides a whole range
of economic activities including voice communication that
customers may purchase. For rural areas this change in what
telecommunications is has meant that the critical mass for
service provision is amalgamated differently than before.
The Internet is the key component of the on-going metamorphosis
of the telecommunication industry.
Features
Internet
on the Range—The Internet has quickly become a standard
tool used in the workplace and farms have been in the vanguard
in rural America. The most recent data indicates 56 percent
of farm operators used the Internet while 31 percent of
rural workers used it at their place of work.
Rural
America Indicator—Broadband Internet service is catching on
in rural areas, but dial-up is still the most likely method to access
the Internet. Dial-up service is more likely in rural areas than
urban areas.
Recommended Readings
Communications
& the Internet in Rural America—in Agricultural Outlook,
June-July 2002. Beginning with the telephone, communication and
information service innovations have penetrated rural America in
fits and starts. The marked decline in investment in telecommunications
since the dot-com bust in the late 1990s will slow the diffusion
of Internet and other new services, but demand for these services
is likely to continue growing. The availability of new services
and their affordability will be determined by four factors: public
policy, economic feasibility, technical limits of new technologies,
and market incentives.
Farms, the
Internet, and E-Commerce: Adoption and Implications—Farms
have been in the vanguard of Internet adoption with Internet use
by U.S. farmers growing rapidly, as advances in technology make
the Internet more accessible. Online buying and selling has become
a major farm business.
See all recommended readings…
Recent Research Developments
Modern Telecommunications in Rural America was an invited
paper at the 2005 Chicago Federal Reserve Bank conference “The
Future of Economic Development in Rural America. From the perspective
of end-use the presentation covers technology diffusion, the economic
challenges to rural America, economic policy, technological feasibility,
and the extent of adoption of new technologies in farm and rural
communities.
The Knowledge Economy in the United States and the Transition
Countries of Central Europe was a symposium paper at the 2005
American Agricultural Economics Association Annual Meetings. The
paper explores the role of communication services in the economy
and how policy may affect communication and information service
availability in the U. S. and the transition countries of central
Europe.
Related Briefing Rooms
Related Links
USDA's Rural Utility Services Telecommunications
Program—provides many programs for financing rural America's
telecommunications infrastructure.
USDA's Rural Utility Services Distance
Learning and Telemedicine Program—Through loans, grants,
and loan and grant combinations for advanced telecommunications
technologies, the agency provides enhanced learning and health care
opportunities for rural residents.
U.S. Department of Commerce, National
Telecommunications and Information Administration—The agency
works to spur innovation, encourage competition, and provide consumers
with more choices in telecommunication services.
Federal Communications Commission—An
independent U.S. Government agency charged with regulating interstate
and international communications by radio, television, wire, satellite,
and cable.
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