No need for rural broadband subsidies

See Who Lives in Rural Areas? by Randal O’Toole.

"One of the provisions of President Biden’s American Jobs Plan is to spend $100 billion bringing broadband internet services to “more than 30 million Americans” who live in rural “areas where there is no broadband infrastructure that provides minimally acceptable speeds.” That’s $3,333 per person or about $8,800 per household.

Who are these people who deserve such a big subsidy? Well, I’m one of them. Here in rural central Oregon, DSL speeds are barely faster than dial-up. The alternative is satellite, which is pretty fast but I don’t like the idea of paying by the gigabyte. That’s just me; some of my neighbors have it and it works pretty well for them. Satellite is available everywhere, so it’s not like any rural Americans are physically denied access to high-speed internet.

My main point, however, is that Biden either thinks, or wants us to think, that rural people are all dirt-poor farmers deprived of the benefits they could get from watching Netflix on cold winter nights. I’m sure you can find some of those, but they are far from a majority of rural residents.

Table B24050 of the American Community Survey shows the “industry by occupation” for American workers. When broken down by urban and rural, we find that just 4.6 percent of rural workers have jobs in the “agriculture, forestry, fishing and hunting, and mining” sectors. Almost twice as many rural workers have construction jobs and three times as many have manufacturing jobs.

Of course, every “direct” job, such as farming or mining, generates “indirect” jobs in, say, education and retail sectors. Every direct job in agriculture, forestry, fishing and hunting is estimated to produce 2.3 indirect jobs while mining jobs produce 3.9 indirect jobs. That means the 1.3 million rural jobs in ag, forestry, etc. produce 3.5 million indirect jobs for a total of 17 percent of all rural jobs.

So who are the other 83 percent? A lot of them are people like me: exurbanites, meaning people with urban-like jobs who have decided to live in rural areas. This probably includes most of the 1.5 million rural people with finance and real estate jobs; the 2.4 million with professional, scientific, and management jobs; and 1.7 million with transportation jobs, among many others.

Nor are most of these people materially deprived. American Community Survey table 24021 says that rural incomes are 95 percent as high as urban incomes. Since housing and other costs tend to be lower than in many major cities, incomes adjusted for purchasing power parity may actually be higher in rural areas. In some fields, including transportation, actual rural incomes are considerably higher than urban incomes.

Regardless of income, exurbanites made a conscious choice to live in rural areas knowing that they would be giving up some of the benefits of living in big cities. Ruralites have to drive further to get to a supermarket, have less convenient access to professional services, can’t go out to eat every night or frequently attend the theater, and their internet access is likely to be slower. These are trade offs we made in order to be away from crowds and closer to nature.

Moreover, even without Biden’s bill, they aren’t likely to lack access to high-speed internet much longer. According to the Federal Communications Commission, partly due to existing federal programs, the share of Americans who lacked access to high-speed internet fell from 25.5 percent in 2010 (which probably included almost everyone living in rural areas) to 6.5 percent in 2019. That’s fewer than 30 million, but no matter what the exact numbers, the trend is the same: people are getting connected, so this is a problem that is rapidly going away.

Well-off, exurban households clearly neither deserve nor need an $8,800 subsidy to get broadband service, especially when those who really need it can always get satellite service. Personally, I’d love a faster connection, but given I can already get it from a variety of satellite services, I'd rather just have the $3,333 so I can choose my own provider."