Rural Families Need Broadband Subsidy Program More but Use It Less

While the future of the Affordable Connectivity Program (ACP) remains uncertain, it is worth reviewing how the program fared in rural America. Home broadband adoption rates in rural areas have historically been 5-10 percentage points lower than those in urban locations. This is due partly to lower internet availability but also higher monthly costs in rural geographies.  So, were rural households, with lower broadband adoption rates and higher monthly bills more likely to embrace the program? The short answer is no. Using county-level data on ACP subscribers for each month of the program and estimates of the number of eligible households in each county, it shows that rural households were far less likely to participate than urban households.  Even more tellingly, the gap grew dramatically over the life of the program. As the ACP began in January 2022, only about 13% of eligible households in the most rural counties signed up. This was well below the 21% rate for eligible urban households.  These highly-rural counties saw their participation rate grow to 28% by late 2023, while urban households increased to 46%. So, the rural-urban ACP participation gap increased from 8 percentage points (21% – 13%) to nearly 20 percentage points (46% – 28%) over the roughly two-year life of the program.  A smaller gap (and increase) was seen for less rural counties, from 3 percentage points in January 2022 to 9 percentage points by late 2023. Rural areas were disadvantaged by 1) lower numbers of internet providers advertising the program and 2) fewer civic organizations like libraries or non-profits spreading word about the program and helping people sign up. 

[Brian Whitacre is a professor and Neustadt Chair in the Department of Agricultural Economics at Oklahoma State University. Howard Song is an undergraduate at Oklahoma State.]