SBA Study: Broadband Use by Rural Small Businesses

This SBA study explores two popular beliefs pertaining to the deployment and use of broadband services. First, that these services provide tangible benefit to the overall economy. Second, that rural deployment lags urban deployment. It has often been suggested that the universal provision of broadband services in rural areas was cost prohibitive; thus creating the urban-rural digital divide.

This study investigates and verifies these assertions, specifically, as they apply to rural small businesses. It relies primarily on data from the Federal Communications Commission (FCC) and an Office of Advocacy survey.

The study finds that an urban-rural digital divide does exist in the provision and adoption of broadband services. This difference in broadband use is statistically significant. A major concern is that many benefits have been associated with the availability and adoption of broadband services, and rural small businesses are not obtaining them.

• Broadband investment (and more generally investment in information technology) • appears to provide substantial benefits to both consumers and the overall economy. Broadband investment and services appear to stimulate economic productivity and • output, as well as create jobs.

• This study finds that rural small businesses do not subscribe to broadband services as frequently as urban small businesses do, and finds the difference in broadband use between rural and urban areas to be statistically significant.

• One of the drawbacks of the apparent urban-rural digital divide is that rural small businesses are less likely to benefit from new technologies facilitated by access to broadband services. For instance, this study finds a statistically significant difference in voice-over-Internet protocol (VoIP) use between metropolitan and non-metropolitan areas, apparently due to the lack of broadband use in rural areas.

Download the complete study here.