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The Online Opportunity Gap: How CDFIs Are Helping Bring Broadband Access to Rural Communities

Most Americans take high-speed internet access for granted. It’s there when we need it. We use terrestrial (wired) broadband when we’re working at our desks and when we stream our favorite shows at home in the evening. Students use it to explore the world beyond their classrooms and to complete and submit homework assignments. Our smartphones use mobile broadband to put communication, shopping, directions and much more right at the tips of our fingers.

This convenience is far from the daily reality for many Americans, however. Millions of people living in rural areas and on Tribal lands lack broadband access, which puts them at an increasing disadvantage as more of our daily life moves online. The Federal Communications Commission (FCC) Broadband Deployment Report for 2019 notes that broadband availability is higher than ever: “As of year-end 2017, 93.5% of the overall population had coverage of such services, up from 91.9% in 2016.” But the availability gap in rural and Tribal areas remains stark: “Over 26% of Americans in rural areas and 32% of Americans in Tribal lands lack coverage from fixed terrestrial 25 Mbps/3 Mbps [download speed/upload speed] broadband, as compared to only 1.7% of Americans in urban areas.” 

FCC data included in the report shows rural/Tribal area access has increased each year over the last five years. In 2013, slightly fewer than half of rural residents and only 37% of tribal lands had such access. Even with the recent progress, more than 20 million Americans still lack access to terrestrial high speed internet connections. In addition, the FCC’s access data measures availability of the agency’s minimum benchmark speed of 25 megabits per second (Mbps). Modern fiber optic internet connections can provide download speeds of 250 Mbps or higher, allowing the connection to handle multiple activities without slowing down. What’s more, rural residents and advocates often find these numbers, reported by telecom service providers, do not capture the full picture of who has service and who still lacks it.


Life Without Broadband

According to Nathan Ohle, Executive Director for Rural Community Assistance Partnership (RCAP), a national network of nonprofits serving rural communities, this disparity creates real obstacles for Rural America. “Many of communities we serve don’t have very good broadband access,” Ohle explained. “That means the opportunity for economic growth and prosperity, even the ability to search for a job, is really limited.”

Lack of broadband access affects daily life for many rural Americans, but it also confronts farmers and other business people, first responders, medical care providers, students, and local governments with impacts ranging from merely inconvenient to life-threatening. Ohle notes that broadband access can have a profound impact on disaster preparedness, warning and recovery. “For example, after Hurricane Harvey, our TA providers were on the ground doing assessments of water systems in the wake of storm,” he explained. The TA providers created color-coded GIS maps to indicate the status of 147 systems and communicated the information back to federal funders. “If there had not been broadband access in those communities, we would not have been able to communicate that information on system and community damage accurately to funders,” he said, noting that broadband is also an essential lifeline for economic recovery in disaster-affected areas. “Even in something as small as a water main break,” he added, “broadband can be critical in both the ability to get information out to service providers to get it fixed and the ability to communicate with the community about why water is off and the need to boil water. It has a huge impact.” Access to broadband is so significant, the FCC and American Public Health Association in 2018 deemed it a “super-determinant of health,” in recognition of its impact on other health determinants such as employment, education and access to healthcare.


A Role for CDFIs

CDFIs are stepping in to help ensure broadband reaches more rural areas. At a panel discussion during October’s Opportunity Finance Network conference, Ohle and others talked about how their organizations are helping bring high-speed internet access to more people in more places.

Gary Franke, Managing Director of the Communications group at CoBank, oversees a $4 billion telecommunications infrastructure lending portfolio, including multiple broadband projects. He sees ample potential for CDFIs to contribute to broadband financing in the near future. “We believe that there’s capital available for rural broadband,” Franke told the panel audience. Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” Franke explained, but he cautioned the panel audience about a conflict inherent in these projects. “You need to build it in partnership with the provider. When we see municipalities that are building [fiber] themselves, they are typically not successful. It’s very complex and you have to have the ability to run it.” On the other hand, however, rural broadband is lacking in many areas because the large national providers are not interested in making the investment, so private investment is needed, “but if you can get the right mix of cost to deploy it and residential take rate to pay for it, you can get the capital,” he assured. “We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come.”

Midwest Minnesota Community Development Corporation (MMCDC) President Julia Nelmark described how the organization used New Markets Tax Credits to finance a project with a local , quasi-public communications agency to run high-speed fiber in rural Wyoming. The project required a variety of funding sources, including the New Markets Tax Credit Equity, including debt capital and grant funding. Nelmark described the deal as a learning experience, but the project will bring much higher data speeds to area residents and result in 150 households gaining internet access for the first time.


Mapping the Gaps

In addition to direct financing, CDFIs and other advocates like the National Association of Counties (NACo) are helping carry the message about the importance of broadband and the gap that still remains for underserved communities. Several pieces of legislation have been introduced on Capitol Hill this year that would require the FCC to take steps to increase broadband access in rural areas. However, as these bills acknowledge, a critical first step is simply knowing the scope of the problem.

The FCC’s current coverage maps indicate where broadband is available by census tract, using self-reported information from the service providers. As RCAP’s Ohle explained to the panel audience, an internet service provider could therefore serve one town in a large rural tract and count that entire tract as “served” because there is broadband access somewhere in it, even if not all residents have the same access. “What we know is that is not accurately describing the access in rural communities,” Ohle said, noting that federal funding for addressing broadband is driven by the FCC and its maps.

To combat misleading reports, create a more accurate picture of coverage and, they hope, drive more funding to rural broadband, RCAP and NACo teamed with LISC Rural and other partners to create TestIT, a mobile app designed to crowd-source information gathering about data speeds, particularly in rural areas. With TestIT, iOS and Android users can download the app and, with one click, test the mobile broadband speed anywhere they are. The app automatically reports the data speed and precise location so advocates can begin mapping more accurately where broadband access does and does not exist. Even if a user is in an area with zero broadband, the app will store that data and report the test and populate the database later when the user enters an area with service. Test it will tell you no access. Then will populate that data to the national data base later. “TestIT was created to provide a role for small, community-based organizations to have real, concrete action steps to take to increase broadband access in their communities,” said LISC Rural’s Julia Malinowski.

LISC, RCAP and NACo are using their national and regional networks to encourage as many people as possible to download the app and test broadband speed in their communities. Users have conducted more than 85,000 speed tests so far.  With this information, the TestIT partners can give a much clearer picture of true broadband coverage and urge the FCC to take steps to expand service to places providers have already “checked off” on their maps, but that are not served in reality. Ohle explains, “What we will start with is just having conversations with FCC about the data and what we are seeing. I think they recognize there is a need and are looking for as much input as possible on how to make that better.” Ohle listed several pieces of proposed legislation – including the bipartisan Broadband Data Improvement Act of 2019 introduced by Sen. Shelley Moore Capito ( R-WV) in the Senate and the Broadband Deployment Accuracy and Technological Availability (DATA) Act sponsored by Rep. David Loebsack (D-IA) – that would mandate better data about where broadband is available. If and when the legislation passes, RCAP, LISC, NACo and their partners will be ready with the results gleaned from TestIT users.

MMCDC’s Nelmark emphasized the importance of increasing both wired and mobile broadband, noting “most rural people, especially lower-income, have a cell phone, but often have no computer at home.” She added, “This capability is a life-changer for people in remote, rural communities.”