The 260 residents of Ten Sleep, Wyo., drive at least 26 miles to buy groceries and 112 to catch a plane. Local businesses include the Crazy Woman Café and Dirty Sally's, a soda fountain and souvenir shop. You wouldn't expect an Internet entrepreneur to launch a startup here. But in 2006, Kent Holiday did just that, opening Eleutian Technology, where local teachers tutor Asian students in English through live online videos. He now employs about 500 teachers around the region.
Holiday was visiting his in-laws when he noticed the local telephone utility laying fiber-optic cable: Ten Sleep was getting high-speed Internet. In 2011, President Obama used Eleutian as an example of the Internet's effects on rural economic development: "For local businesses, broadband access is helping them grow, prosper and compete in a global economy."
But such access – the basic modern infrastructure many city-folk take for granted – is far from universal. Of the 19 million Americans who lack broadband access – defined as 4 megabits per second (mbps) download speed, 1 mbps upload – 14.5 million live in rural areas. Thirty percent of Indians living on reservations also lack access.
Speedy Internet is not a panacea, but it can provide a much-needed boost. For rural residents, writes Sharon Strover, a communications professor at University of Texas-Austin, "having broadband is simply treading water or keeping up. Not having it means sinking." Now, projects to wire the Navajo Nation and other rural areas could help close the West's connectivity gap. Will they be the economic boon everyone hopes?
The more densely populated a place is, the more likely it is to have fast, affordable Internet. When people live far apart, service providers don't profit enough to cover the costs of building and maintaining the physical infrastructure. If they do provide access, it's often at higher prices and slower speeds than in urban areas. In the rural West, where 2 million people lack broadband access, topography is also a barrier. Mountains and narrow valleys can block signals from wireless towers and satellites and make it difficult to install fiber-optic cables. Silverton, for instance – population 637, at an elevation of 9,300 feet in a remote and rugged alpine area – is the only county seat in Colorado not plugged into fiber-optic cables.
As the Internet becomes a more integral part of daily life, people with shoddy connections are at an economic disadvantage. Fast Internet is necessary to take video-based online classes and to sign up for health care. (Imagine the horror of trying to navigate Healthcare.gov with dial-up.) Rural hospitals use it to video-conference with urban medical specialists, and schoolteachers increasingly record lectures that students can watch at home.
But Lawrence Wood, associate professor of media arts and studies at Ohio University, says the most significant drawbacks are cultural. "The main reason people use broadband these days is for entertainment," he says. Having a smartphone or a fast Internet connection "is really a matter of being a part of contemporary life in the United States."
Expecting the private sector alone to fill the broadband availability gap is unrealistic. So a number of rural areas have turned to community-owned networks. Powell, Wyo., built its own fiber-optic network, which a local Internet provider pays to use, and many of Washington state's public utility districts are doing the same, some with help from the 2009 stimulus. On the Navajo Nation, where fewer than 4 percent of residents have broadband access, the tribal utility recently received a $32 million federal grant to bring wireless service to the entire reservation. And in southeastern Colorado, a rural electrical co-op provides broadband in places like Two Buttes, population 43 – doing for Internet what it did for electricity in the 1930s.
But simply having access isn't enough; people have to actually use it. Broadband adoption rates are 13 percent lower in rural America than in cities, Strover found, with non-users citing high cost and the belief that they don't need to be online. But when rural residents use broadband, there are economic benefits. In a 2013 study, Strover found that rural counties where over 60 percent of people used broadband had more rapid income growth and slower unemployment growth than similar counties with fewer people online.
Broadband cannot, however, reverse long-term economic trends like rural-to-urban migration, or change proximity to a highway or the quality or size of the local labor force. "Most economic decisions depend on a multitude of factors," writes Shane Greenstein, who studies information technology and economics at Northwestern University's Kellogg School of Management, "and broadband is but one of many."
While broadband helped lure Eleutian Technology to Ten Sleep, it wasn't enough to keep it there. After three years, the company decided to move. Eleutian needed a bigger building, but no water or sewer lines ran to the large lot it had bought a quarter-mile outside of town, and the cost of installation was too high. Plus, Ten Sleep lacked adequate housing for Eleutian employees, some of whom had to live in trailers, and the long drive to the Yellowstone Regional Airport was burdensome.
So Eleutian moved to Cody, population 9,500 – a city by Wyoming standards. A Cody-based economic development team secured a grant to build the company's headquarters, which Eleutian now leases with the option to buy at below market value in the future.
"We just couldn't compete with the bigger area," says LeeAnn Chenoweth, executive director of the Washakie Development Association in Worland, Wyo., which tried to keep Eleutian in Ten Sleep. "Having broadband can attract business, but places that have 200 or 300 people are probably always going to be challenged by the economy of scale."