Rural broadband availability and adoption in Oklahoma

              Rural Broadband Availability and Adoption in Oklahoma
file:////maindc/users/gphillips/PDFs%2073/Rural%20Broadband%20Availability%20and%20Adoption%20in%20Oklahoma.htm[3/14/2013 10:06:08 AM]
Choices
AAEA
Rural Broadband Availability and Adoption in Oklahoma
Brian E. Whitacre
JEL Classifications: R22, D12
Rural areas generally lag behind their urban counterparts in terms of broadband Internet access, a discrepancy commonly
known as the “digital divide.” Nationally, the divide was approximately 12 percentage points as of 2009, with 54% of
rural households adopting broadband access compared to 66% in urban areas (NTIA, 2010). A large body of work has
attempted to uncover the underlying causes of the divide, with the implication that shrinking the gap will positively benefit
rural communities economically and socially (Strover, 2001; Malecki, 2003; Whitacre, 2010). The policy prescriptions
resulting from this work have focused on one of two sides: supply—the availability of broadband infrastructure, such as
cable Internet lines or Digital Subscriber Lines (DSL)—and demand—increasing adoption rates when broadband is
available. In particular, the American Reinvestment and Recovery Act (ARRA) included funding both for broadband
infrastructure grants/loans and for programs to encourage sustainable adoption.
This paper uses the state of Oklahoma as a case study in examining both the availability of broadband access and adoption
rates in rural vs. urban areas in three distinct time periods: 2003, 2006, and 2009. As might be expected, wired broadband
availability first clustered in urban areas across the state, but diffused rapidly over time and became nearly equal by 2009.
Similarly, adoption rates increased dramatically across the state, and although a significant rural-urban gap still exists, it
has noticeably decreased as infrastructure and Internet awareness becomes more prevalent in rural areas. The paper
concludes with a discussion of policy implications, noting that future efforts to close the rural-urban digital divide should
emphasize demand-side policies rather than the traditional supply-side focus.
Supply Data
The federal government’s primary source of data regarding broadband infrastructure is the Federal Communication
Commission’s Form 477. However, these data reveal where broadband subscribers currently exist and not necessarily
where the infrastructure itself exists. Since Form 477 collects data from all providers of broadband access and asks them to
report ZIP codes where they have customers, a single satellite subscriber in a rural area could give that ZIP code the
illusion of having “wired” access. This is one reason why Form 477 indicated that as of December 2005, 99.9% of the
most populated ZIP codes had broadband access, and even showed that 96.2% of the least-populated ZIP codes had
broadband access. Thus, using this data source might suggest that there is little problem with broadband availability in
rural America.
However, the noted issues with this data suggest that alternative sources should be used to attempt to map out the
existence of broadband infrastructure. In particular, the two dominant sources of residential broadband infrastructure have
been cable Internet and DSL, together making up over 80% of the residential market (FCC, 2009). Maps of the availability
of cable Internet access are documented in Warren Publishing’s annual TV and Cable Factbook, which lists every cable
system in a state, denotes the communities served, and indicates whether or not cable Internet is offered. Similarly, the
National Exchange Carrier Association Tariff #4 Dataset lists all telephone central offices in a state, the communities they
serve, and whether or not they offer DSL access. These sources can be mapped to ZIP codes to document the existence of
wired broadband infrastructure across a state. Data were collected from these sources in 2003, 2006, and 2009. The use of
ZIP codes is not a precise representation; no publicly available information exists on the exact locations passed by either
cable Internet or DSL lines in Oklahoma. In particular, some large ZIP codes depicted as having access may not be fully
served, particularly for the more rural portions. However, in the absence of service provider maps, the data used is the
next-best alternative.