Bill could generate billions in rural Net investment

Tuesday, May 28, 2002

WASHINGTON -- A shuttered chemical plant and closed foundry stand as symbols of the industrial economy that once drove Lee County, Iowa, which now has the highest unemployment in the state.

Lowell Junkins, the county's director of economic development, would like to see a more modern economy take root, but says his work has been hindered by a dearth of high-speed Internet access.

"It's absolutely critical that we be able to provide the kind of technology that's demanded by the new-tech companies and we presently do not have that kind of technology available to us," he said.

Lee County and other areas like it could get up to $2 billion to help connect to the information superhighway under a provision of the farm bill recently signed by President Bush.

"Whereas rural areas needed electricity to move them into the 20th century, they need broadband to bring them into the 21st century," said Sen. Tom Harkin, D-Iowa, chairman of the Senate Agriculture Committee.

Broadband uses cable or satellite signals to zap data back and forth at speeds 2,000 times faster than a normal telephone line. It also can carry high-quality digital video signals.

And it can wipe out the geographic isolation that hampers economic development in rural America.

The farm bill provides $100 million in low-interest loans and loan guarantees over the next six years to encourage private providers, cities, counties -- anyone with an interest -- to invest in broadband in rural areas. The loans are expected to generate as much as $2 billion in investment.

Broadband access in rural areas has lagged because the scarcity of potential subscribers doesn't justify the high cost of laying cable or building satellite towers in rural areas.

According to a 2000 report by the Commerce Department, less than 5 percent of towns with 10,000 people or fewer had broadband access. The rate of access for with populations above 250,000 was 65 percent.

A report last December by the National Exchange Carrier Association, a nonprofit entity created by the Federal Communications Commission, estimated it would cost about $10.9 billion to wire all of rural America.

'A crucial piece'

Rep. Tom Udall, D-N.M., who represents rural towns and impoverished Indian reservations in northern New Mexico, said the new federal program follows the model of the New Deal-era Rural Electrification Administration that brought electric power to rural areas.

"I view us being hooked up to the Internet and the broadband service as just a crucial piece of infrastructure," he said. "Without it, areas of our country are going to fall behind, especially the rural areas."

In Udall's district, the town of Las Vegas, N.M., is hoping high-speed Internet lines can replace rail lines and transform the dusty railroad district into a hub for e-commerce.

It won't be home to the next Microsoft, but Strebe said it could attract a handful of Web design firms or data storage companies that each employ 20 to 40 people. In a town of 15,000 dealing with significant poverty problems, every new job helps.

Respond to this story

Posting a comment requires free registration: