Information and Telecommunications Technology and Economic Development: Findings from the Appalachian Region

Michael Oden, Sharon Strover, Nobuya Inagaki, Martha Arosemena, and Jeremy Gustafson and Chris Lucas, University of Texas

Uneven access and capacity underscore the primary challenges rural communities face in exploiting the new technologies. They must secure cost- and quality-competitive access to advanced telecom services and rapidly build local expertise, training and service capacities to improve local business performance and to attract new firms. The research strategy used here provides a comprehensive map of current telecom infrastructure patterns and focuses on tracing outcomes associated with federal and state universal service programs as well as additional state and local telecommunications-related initiatives. This work is part of a larger project that used field research and telephone interviews, archival and secondary documents, and web-based investigations in order to gather data.

Our goal is to document the status of telecommunications in the Appalachian region with a view to assessing its potential relationship to economic growth and the range of federal and state policies that influence its development. We find that telecommunications infrastructure in the Appalachian regions is less developed than that in other parts of the country and that it compares negatively to national averages on various broadband indicators. Broadband technologies such as cable modems, DSL, and even the presence of high-speed services are not as widely distributed in our target region as national statistics would suggest. Statistical analyses show that these distribution patterns are in each case associated with economic activity: more distressed counties have less developed broadband telecommunications infrastructure.

We find that federal universal service supports favor the most rural of the Appalachian states: only Mississippi, Alabama, West Virginia, South Carolina, Georgia and Kentucky have a net positive inflow of funds through the program, although the internal adjustments (from larger, urban-serving companies to smaller, rural companies) among the other states are not to be discounted. These six states are among the most rural of all the Appalachian states, having the lowest population densities among the group we are examining (Tennessee being a close exception).

Reports & Helpful Links:

Full Executive Summary (PDF)

Links to the Future: Information and Telecommunications Technology and Economic Development in the Appalachian Region - Executive Summary (PDF)