Internet connectivity is an essential resource needed for individuals, businesses and communities to fully participate in today’s economy. But as reliance on the internet has grown, connectivity has not necessarily kept pace, particularly for disadvantaged populations and those living in geographically remote areas. As of 2017, 21.3 percent of households in the United States did not have an internet subscription and another 7.5 percent were only able to access the internet through a cellular data plan.1 Between these two groups, 34.2 million U.S. households have limited or no internet connectivity in their home, which may negatively impact their ability to fully participate in labor force, commerce and educational opportunities.2 Looking at this problem through a lens of geographic disparity, this issue of 5th District Footprint explores the question: To what extent do Fifth District households face limited internet connectivity? Is internet connectivity different for urban and rural Fifth District households?
Much of the conversation about internet access at the federal level focuses on fixed broadband – which is faster than traditional dial-up internet access – because advanced technology is necessary to help grow the national economy and compete globally.3 While a variety of factors influence if and how a household connects to the internet, including cost, personal preference and the availability of providers, the Federal Communications Commission (FCC) estimates that as of 2016, over 24 million Americans did not have the option to purchase a fixed internet subscription because broadband infrastructure did not reach their communities.4 This gap disproportionally affects low- and moderate-income (LMI) Americans, making it of particular concern to the Federal Reserve System’s Community Development function.5 Among the federal policy tools available to address this infrastructure gap is the Community Reinvestment Act (CRA), which requires financial institutions to help meet the credit needs of the communities in which they are chartered, including LMI neighborhoods. According to guidance released by the Federal Financial Institutions Examination Council in 2016, financial institutions can fulfill their CRA obligation by investing in infrastructure projects to help increase broadband internet connectivity.6
Even when households have access to broadband service, it does not necessarily mean they are connected. Within the Fifth District, the town of Cary, North Carolina, was the only Fifth District locality to rank among the top five best connected cities in the country in 2017 in terms of the number of households with an internet subscription, according to the National Digital Inclusion Alliance (NDIA).7 Of the 191 U.S. cities with more than 50,000 households that the NDIA assessed, Richmond, Virginia, and Baltimore, Maryland, ranked among the 25 worst connected cities.8 But internet connectivity is not just a challenge for urban communities – in fact, rural communities often face greater infrastructure and connectivity challenges.
The maps below provide a comprehensive picture of the connectivity challenges faced by both urban and rural Fifth District residents. The first map displays the percentage of households in a county without any type of internet subscription – households with cable, fiber optic, DSL, satellite, 3G and 4G wireless services and dial-up modems are all excluded from this indicator. The second map displays the percentage of households that can only access the internet through a cellular data plan, which is a limitation that may adversely affect their ability to make full use of internet services because of generally lower speeds, higher lag times and greater risk of service disruption. Both maps include an overlay indicating whether respective counties are designated urban or rural, according to the U.S. Department of Agriculture (USDA) 2013 Rural-Urban Continuum Codes (RUCC).9
Among Fifth District states, the percentage of households without an internet subscription was lowest in Maryland (16.6 percent) and highest in West Virginia (29.0 percent). The District of Columbia has the lowest percentage of households that rely solely on a cellular data plan (5.5 percent), while South Carolina has the highest at 8.0 percent. All Fifth District states have received federal funding to support the implementation and use of broadband technology through grant programs, including those managed by the FCC, the USDA, the U.S. Department of Housing and Urban Development, and the U.S. Department of Commerce Economic Development Administration and National Telecommunications and Information Administration.10
The percentage of households without an internet subscription in Fifth District counties and localities ranges from 6.8 percent in urban Loudon County and Fairfax City, Virginia, to 58.5 percent in rural Allendale County, South Carolina. Of the 359 counties and localities in the Fifth District, 72 (20.1 percent) have a lower rate of households without an internet subscription than the national rate of 21.3 percent.11 The majority of Fifth District counties and localities (287 or 79.9 percent) have a rate at or above the national rate. In general, households in rural Fifth District counties are less likely to have an internet subscription than households in urban Fifth District counties. On average, just under 1 in 5 households in urban counties do not have an internet subscription, and this figure jumps to just under 1 in 3 households in rural counties.12
Cellular data plans can help bridge the digital divide to a degree, but when household internet access is limited to a smartphone, it can become challenging to complete data-intensive online activities, such as submitting a job application or completing a homework assignment. In the Fifth District, the percentage of households that only access the internet through a cellular data plan ranges from 1.2 percent in McDowell County, West Virginia, to 27.9 percent in King William County, Virginia.13 As was the case with the rate of households without an internet subscription, the rate of households that only connect to the internet through a cellular data plan is generally higher in rural areas than urban areas. In rural Fifth District counties, the rate is 8.5 percent, while the rate for urban Fifth District counties is 6.8 percent.
When the two connectivity indicators discussed above are examined together, five rural counties emerge as the most disconnected counties in the Fifth District: Allendale County, South Carolina, and King and Queen, Cumberland, Brunswick and Greensville counties, Virginia.14 These counties have the highest portion of residents living with either no internet subscription or a cellular subscription alone. This suggests that while internet connectivity is important for all Fifth District communities, it is a particularly pressing challenge for select rural communities. Furthermore, reliable, affordable access to high-speed internet is just one critical component to help ensure that all individuals and communities are included in the digital economy. Equally important are public computer access, digital literacy and consumer safety training, technical support and software applications.15 Together, these elements can help ensure that Fifth District residents are better able to take full advantage of the opportunities afforded by broadband internet access.
