If the gap between traditional businesses and those that operate online wasn’t already stark enough, the coronavirus epidemic is laying it bare.
More Americans filed for unemployment in the past month than did across a two-year period following the 2008 economic downturn. Economists now predict that more than 20 million Americans will have lost their jobs by the end of April.
But as the US looks to nurse its economy back to life in the coming months, one obstacle is increasingly likely to stand in the way: the massive holes in availability of high-speed internet.
For all non-essential businesses, commerce has moved almost entirely online. Businesses that target customers on the internet have seen boosts in sales while traditional businesses languish, a trend that analysts expect will continue long after the health crisis.
Broadband is a requirement for most business functions these days, ranging from videoconferencing to precision agriculture. But the FCC estimates that 25 million people live in areas with no high-speed internet service providers, 19 million of which are in rural America.
Due the way the FCC conducts its mapping methods, the actual number is likely much higher — a 2018 analysis published by Microsoft using its own signal data from hundreds of millions of people shows that 162.8 million Americans aren’t using broadband internet.
Even before the age of coronavirus, there’s evidence that the availability of high-speed internet directly affects employment. At least six studies spanning two decades show a cause-and-effect relationship: Where broadband is deployed, businesses adopt more efficient practices, introduce new services, and can reach new labor pools and customers.
Data from tech companies in the US seems to bolster those conclusions — Microsoft’s analysis found that counties across the US with the highest unemployment rate also had the lowest availability of broadband internet.
Both Democrat and Republican lawmakers have touted the need to expand broadband. Over $20 billion in subsidies and grants have been given to carriers to provide high-speed internet to rural areas, including $4.9 billion approved by the FCC last year. But little progress has been made in closing the gap, and carriers aren’t expected to cover those areas for at least 10 more years.
It’s difficult to predict when the US will recover from the coronavirus crisis or what that recovery will look like. But for underserved rural communities without high-speed internet, adapting to the increasingly-online market will be one of the biggest challenges.