Guiding Questions

Our research goal is to characterize and quantify the relationship between adequate broadband services and rural entrepreneurial endeavors, and to assess which policies – whether governmental, private, trade association-based or philanthropically supported – might improve the local entrepreneurship ecosystem. We formulated the following research questions to guide our work:

• • What is the role of local broadband in entrepreneurial activities in rural regions?
  • How can broadband improvements support or improve entrepreneurship in rural areas?
  • What policies – public and private – might enhance broadband’s availability and our understanding of how entrepreneurs use it?

Our Approach

The study has two phases:

Phase 1 examines county-level data in the three target states of TX, KS, and ME in order to analyze how different qualities and reach of broadband in nonmetro regions are related statistically to indicators of entrepreneurship.

Phase 2 incorporates a matched-county qualitative investigation (six counties in three states) in order to assess differences between counties with faster, more reliable and diffuse broadband compared to counties with constrained access to broadband.  We chose the three states because we have worked there before and have a small network of contacts, because we understand their governance systems both locally and at the state level, and because they offer three different sets of broadband and policy environments.

Phase 1

In Phase 1 we assembled a database of statistics measuring economic activity and entrepreneurial activity from various sources including the US Census, the American Community Survey (ACS), and the Bureau of Economic Analysis (BEA). Specifically, we use the percentage of non-farm proprietors over total employment as a representation of entrepreneurship of a count. This indicatory has been used widely in previous studies (e.g., Conley & Whitacre, 2016; Conroy, Deller & Kures, 2019). In addition, we explore “venture density” data from GoDaddy as another new measure of entrepreneurial activities (Mossberger, Tolbert, & LaCombe, 2020). Venture density reports on the presence of online webhosting activity at the county level.  Hence, it is an indirect indicator of a certain type of economic activity and captures small-to-medium size industries.

We compiled a database of statistics that measure broadband in the United States, including the federally-compiled Form 477 data from the Federal Communications Commission (FCC) that records broadband availability in the US. We supplement these statistics with broadband adoption data from the Census-produced American Community Survey that measures whether or not a household has a fixed broadband subscription (among other metrics). We also explore connectivity data from Microsoft and M-lab; their data indicate the quality of broadband connections and thus hint at broadband reliability and speeds, both factors that come up in examining the contribution of broadband to economic activity.

Phase 2

The research sites chosen for Phase 2 of this project build on earlier research in Texas, Kansas, and Maine, leveraging our familiarity with some aspects of the broadband landscape, the leadership environment and the issues afoot in the rural regions of the three states. As well, the states differ in many important ways, including their size and geographies, their main industries, and their policy approaches to broadband. We are conducting interviews with key individuals in business leadership, economic development, and public affairs. We interview businesses, economic development personnel, telecommunications providers and community leaders to better understand how broadband capabilities figure into entrepreneurial strategies, plans, operations and capabilities in our counties. While our analytic focus is on matched counties in each state, our work also considers the role of state policies or environments as well as specific developments in our target counties.

The counties we focus on in this project are: Graham County and Cheyenne County, Kansas; Washington County and Lincoln County, Maine; Milam County and Fayette County, Texas. As outlined in Table 1 below, the demographics, rurality, and general economic landscapes of counties chosen in each state are comparable to their partner county. The major difference in these counties is the availability, reliability, or speed/quality of broadband service.

Table 1:  Selected Counties by Indicators

* 2019 FCC Broadband Deployment Report

[1] Broadband quality of service measure is calculated using broadband data from Microsoft and M-lab. Using different methods, Microsoft and M-lab data shows the extent to which broadband service was actually delivered at 25/3Mbps speed quality. Microsoft utilizes speed logged during its software updates on various computer devices, while M-lab utilizes voluntary broadband speed tests. Statistics here are a composite average of the two.

• Individual business owners wield outsized importance in helping shift the focus of their respective communities towards broadband. Entrepreneurs share with us they seek action towards broadband planning due to the fact that they are business owners; they share with us that they need robust broadband to sustain and grow their operations.
• New media and social networks are integral for small businesses to compete with larger retailers. Entrepreneurs describe creative ways they use Facebook, Instagram, email listservs, and other platforms to do business with their neighbors and reach beyond their location. Also, cloud computing services help small businesses streamline their business activity from on premise sales to e-commerce. Cloud technology collapses the need for multiple interfaces, but there needs to be a robust and reliable enough signal for businesses.
• New commercial arrangements were created by the pandemic. Beyond seeking new supply arrangements, Facebook is an important tool for producers; impromptu groups have organized to help farmers, fishers, and others in pivoting their sales to direct-to-consumers. These groups help sustain hyperlocal trade in the pandemic and fill the vacuum COVID has caused by shuttering restaurants and reducing opportunity to sell to distributors.
• The depth and breadth of technology use by entrepreneurs in the project provide strong evidence that business owners in small and rural locations are using innovative technologies creatively; however, business owners report that they need significantly more and reliable bandwidth to remain competitive.
• Small communities with robust broadband often benefit from local or cooperatively owned telecom infrastructure companies. Communities with constrained broadband, on the other hand, seek to bring broadband to their location when large, incumbent providers fail to serve their needs. We learned of instances when two or three individual business owners or local institutions rallied their neighbors to advocate for better broadband, the direct result in a couple of cases being the formation of a local broadband committee. In three examples, we heard that committees approached cable incumbents with proposals to fund new infrastructure but were turned down by these large incumbents. In two communities, small and local telephone companies rose to the need, and in the third, the community created a local broadband utility owned by the citizens. Importantly, these communities express eagerness to share the process of alternative broadband arrangements to help change the tide of underservice in other communities like theirs.

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