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Thursday
Aug182011

Obama Pledges Rural Jobs and Economic Growth

Broadband, RLECs Play a Crucial Role in Achieving a Vibrant Rural Economy

On Tuesday, August 16, President Obama visited the small town of Peosta, Iowa as part of a 3 day Midwest road trip, where he was engaged in Town Hall meetings in Iowa, Minnesota and Illinois communities. The Peosta stop was more than just a presidential Town Hall Meeting, as it was also the site for the White House Rural Economic Forum. The Forum brought together government leaders and rural small business owners, farmers, energy sector employees and individuals from community organizations to discuss both challenges and goals for rural America to overcome to achieve a vibrant rural economy. In addition to the Forum, the newly formed White House Rural Council also released a report, “Jobs and Economic Security for Rural America,” earlier this month.

I felt that Obama’s remarks at the Rural Economic Forum and the Council’s report were optimistic about the future of rural America and realistic about the economic and demographic challenges that rural businesses face. I believe that rural broadband plays a critical role in every single goal for rural economic revitalization, and I see important positions for RLECs as major employers themselves, and as catalysts for the growth and innovation of other small businesses in rural areas. RLECs also provide the necessary infrastructure for health care, education, energy and agriculture—which are all areas identified by the White House Rural Council and President Obama as critical sectors for the future of rural American prosperity and vitality.

In his opening remarks at the Rural Economic Forum in Peosta, Obama commented that although times are tough for Americans right now, tough times are nothing new for rural Americans specifically. He described how rural Americans look out for one another during difficult times and hold shared values of honor, self-discipline and integrity. Obama believes that it is time to “push through economic hardships and get to a better place,” and the White House Rural Council is seriously looking for ways to promote jobs and opportunities in rural America. Deploying broadband to an additional 7 million Americans is one of the primary goals of the Council, which will help enable distance learning, job training and international trade for people in rural areas.

Obama’s message in the White House Rural Council report states that he established the Council “to accelerate the ongoing work of promoting economic growth in rural America,” and the Council “will focus on spurring agricultural innovation, expanding infrastructure, increasing access to capital in rural areas for small businesses, and creating economic opportunities through conservation and outdoor recreation.” The report states that small businesses “are the engine of job growth and an important source of innovation in the country.”

 I believe that rural telecom providers have the potential to be models of economic growth in rural areas, as they are small businesses themselves and they provide the infrastructure and communications capabilities for other rural small businesses to succeed. The report notes that rural areas face significant challenges, and “many rural communities have lower incomes, higher poverty rates, worse health outcomes, and lower educational attainment than urban and suburban areas.” Without adequate broadband infrastructure, I do not see how any of these challenges can be overcome effectively, causing rural America to fall short of meeting its growth potential.

The report also notes that rural entrepreneurs face greater challenges in accessing capital, and “often face a greater two-way information gap—there is less information about rural entrepreneurs for potential funders, and there is less information in rural communities about sources of funding.” An even more serious challenge is that “over the last century, the percentage of Americans living in rural communities has declined by nearly 50%.” The trend of young people leaving rural areas for greener pastures in urban areas has troubled rural telecom businesses for some time, and there definitely needs to be opportunities for jobs and education for rural youth in order to keep these communities viable in the long term. Iowa Telecommunications Association president Dave Duncan attended the Forum, and in a Radio Iowa article about the event he described that there were rural youth in attendance from the Future Farmers of America. When he asked if they would stay in rural areas with no broadband, “none of them raised their hand.”

Among President Obama’s commitments to rural America are creating jobs and economic growth and promoting innovation and investment. The second commitment includes “expanding broadband access and promoting global connectivity in rural America,” and expanding wireless broadband to 98% of Americans. I definitely believe that RLECs have a role in these commitments, but what about other industry players—like wireless companies and large telecom providers? The Rural Telecommunications Group (RTG) issued a statement this week in response to the Council’s goal of wireless broadband for 98% of Americans. RTG believes that “market-based competition for rural broadband access—especially mobile broadband access—can create jobs, encourage education, strengthen small businesses, improve medicine and promote economic growth.” RTG does not however believe that the potential merger between AT&T and T-Mobile will help achieve the Council’s goals for rural wireless broadband. RTG argues that AT&T “has a long history of treating rural America as an afterthought at best,” and “the fastest way to create telecommunications jobs and broadband coverage in rural America is robust competition, not a monopoly.”

What are the plans moving forward? The Rural Council “will continue to coordinate programs across government to create jobs and promote economic development in rural communities;” “will also be responsible for creating new policy recommendations and proposals;” and most importantly, “the Administration and the Council will take immediate steps to create jobs and improve the economy in rural communities.” I am not sure what involvement the Council has with the FCC as far as USF reform is concerned, but I definitely hope the Council is aware of the challenges that rural broadband providers will face if certain detrimental decisions are made this fall at the FCC. Meanwhile, I see the Rural Council as a positive addition to the Obama Administration and a great ally for RLECs.

The White House Rural Council’s August 2011 report is available here.

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