Study Finds Multi-Billion-Dollar Impact of Rural Telecom

October 20, 2011

RTFC Capital Connections | Vol. 23, No. 10

Supported by the Universal Service Fund (USF), rural telecom plays a significant role in growing the economies of both rural and urban areas according to a study released last week by the Hudson Institute, a nonpartisan policy research organization.

The study, prepared for NTCA’s Foundation for Rural Service (FRS) and funded by RTFC, found that the operations of rural telecoms contributed $14.5 billion to local economies across the country in 2009, with one-third of the amount accruing to rural areas and the rest to urban areas. The sizable urban-area impact is due to the fact that rural telecoms “spend a good deal of their revenue to buy services and equipment that come from distant cities,” said the study which also noted that rural telecom supports more than 70,000 jobs across the country.

Significantly, the study also found a direct correlation between the size of the economic impact of rural telecom and the commitment Congress has made to universal service and the USF. “Without the policies that flow from our current commitment, the scale and scope of rural telecommunications would be smaller, as would its economic impact,” the study said.

“As this study shows, the economic impact of rural telecom and USF on both rural and urban areas is substantial,” said FRS Executive Director Elizabeth Crocker. “And we greatly appreciate the continuing support of RTFC in bringing facts like these to light.”

The 28-page study, “The Economic Impact of Rural Telecommunications: The Greater Gains,” was released at a press conference at the Hudson Institute on Oct. 11. Copies were sent to all members of Congress, as well as the Federal Communications Commission and telecom media. The study is available on FRS’s website.

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