The Potential for the Expansion of High-speed Internet Services in Rural Arizona: The Demand Side of the Equation

Presentation Overview Importance to economic development Importance to economic development Some reasons for high-speed lag in rural AZ Some reasons for high-speed lag in rural AZ Demand does exist Demand does exist Arizona’s current situation Arizona’s current situation Public-private partnerships Public-private partnerships What can communities and citizens do? What can communities and citizens do? Arizona Cooperative Extension’s role Arizona Cooperative Extension’s role

Arizona Will Continue to Grow Source: Center of the American West, development/development_az.html

High-Speed Internet is Important for Economic Development Many new rural residents demand it Many new rural residents demand it Potential relocating firms cite it as one of their top requirements Potential relocating firms cite it as one of their top requirements Broadband communities experience more-rapid growth in employment and number of businesses Broadband communities experience more-rapid growth in employment and number of businesses Shown by 2006 study prepared for Economic Development Administration Shown by 2006 study prepared for Economic Development Administration

Why Has High-Speed Penetration Lagged in Rural Areas? Lack of telecommunications infrastructure Lack of telecommunications infrastructure Return on investment for providers often isn’t there Return on investment for providers often isn’t there Communities have difficulty demonstrating demand for a service they don’t yet have… Communities have difficulty demonstrating demand for a service they don’t yet have… Public sector investment needed but federal and state $ dwindling Public sector investment needed but federal and state $ dwindling

Will Rural Residents Utilize High- Speed Services? Is this a demand—not a supply—problem? Is this a demand—not a supply—problem? 2002 Consumer Electronics Association study: 68% of U.S. homes had access, only 9-10% subscribed 2002 Consumer Electronics Association study: 68% of U.S. homes had access, only 9-10% subscribed Pike & Fischer forecasts rural penetration topping out at only 50% of homes Pike & Fischer forecasts rural penetration topping out at only 50% of homes However, 2006 Pew Internet & American Life survey suggests rural users aren’t significantly different from other users However, 2006 Pew Internet & American Life survey suggests rural users aren’t significantly different from other users May depend on applications utilized May depend on applications utilized

Current Situation in Arizona Critical infrastructure has been slow in coming to some parts of State Critical infrastructure has been slow in coming to some parts of State Is estimated that half of AZ’s rural residents don’t have Broadband access Is estimated that half of AZ’s rural residents don’t have Broadband access Where there is availability, costs can be high Where there is availability, costs can be high Rural Arizona is now sharing in State’s rapid growth Rural Arizona is now sharing in State’s rapid growth

State-Level Organizations/Initiatives/Studies Arizona Government Information Technology Agency (GITA) Arizona Government Information Technology Agency (GITA) AZNet AZNet Telecommunication Open Partnership of Arizona (TOPAZ) Telecommunication Open Partnership of Arizona (TOPAZ)

State-Level Organizations/Initiatives/Studies Communications Infrastructure Advisory Committee (CIAC) Communications Infrastructure Advisory Committee (CIAC) Arizona Broadband Initiative Framework Arizona Broadband Initiative Framework Study prepared by the Center for Digital Government for the Arizona Department of Commerce in April 2007 Study prepared by the Center for Digital Government for the Arizona Department of Commerce in April 2007 Broadband Assessment Project (ongoing) Broadband Assessment Project (ongoing)

Examples of Rural Broadband Initiatives I-19 Wi-Fi for first responders I-19 Wi-Fi for first responders Southern Pinal County Broadband and Wi-Fi Project Southern Pinal County Broadband and Wi-Fi Project Town of Superior Wi-Fi Project Town of Superior Wi-Fi Project Town of Wickenburg Wi-Fi Project Town of Wickenburg Wi-Fi Project

Public-Private Partnerships Are Critical Public Sector can’t or won’t undertake infrastructure modernization alone Public Sector can’t or won’t undertake infrastructure modernization alone “Middle Mile” is critical “Middle Mile” is critical Local governments will have to invest, especially in Middle Mile Local governments will have to invest, especially in Middle Mile

Public-Private Partnerships Are Critical Three main models/strategies nationally: Three main models/strategies nationally: Public sector stimulates demand Public sector stimulates demand State creates a broadband authority with legal power to collect funding, make grants or loans, reform right-of-way State creates a broadband authority with legal power to collect funding, make grants or loans, reform right-of-way Public-private partnership in the form of a state-chartered nonprofit Public-private partnership in the form of a state-chartered nonprofit

What Can Communities and Citizens Do? Create a broad-based plan and get buy-in Create a broad-based plan and get buy-in Conduct an asset inventory Conduct an asset inventory Identify and document demand Identify and document demand Mobilize support for local funding Mobilize support for local funding Look for additional funding Look for additional funding Research a variety of potential private partners Research a variety of potential private partners

Grant/Loan Opportunities Economic Development Administration Economic Development Administration USDA Rural Utilities Service (RUS) USDA Rural Utilities Service (RUS) Rural Broadband Access Loan Program Rural Broadband Access Loan Program Community Connect Grant Program Community Connect Grant Program RUS Rural Telephone Loan Program RUS Rural Telephone Loan Program RUS Distance Learning and Telemedicine Grants Program RUS Distance Learning and Telemedicine Grants Program

Grant/Loan Opportunities Universal Service Fund (USF) Universal Service Fund (USF) Schools and Libraries Program Schools and Libraries Program Rural Health Care Program Rural Health Care Program Arizona Department of Commerce Arizona Department of Commerce GADA debt financing? GADA debt financing?

How Can We Stimulate and Demonstrate Demand? Internet/computer courses Internet/computer courses Free public access on limited basis? Free public access on limited basis? Marketing existing programs Marketing existing programs Surveys of residents Surveys of residents Petitions Petitions Town halls/workshops Town halls/workshops

Arizona Cooperative Extension’s Role Data and interpretation! Data and interpretation! Education: elected officials, community leaders, residents Education: elected officials, community leaders, residents University research, outreach and facilitation University research, outreach and facilitation Bringing public and private entities together Bringing public and private entities together

The Bottom Line High-speed Internet services are critical for rural communities, too High-speed Internet services are critical for rural communities, too Develop community partnerships; then develop a plan Develop community partnerships; then develop a plan Inventory your assets Inventory your assets Document demand Document demand Focus your efforts Focus your efforts

The Bottom Line Commit to funding the “Middle Mile” Commit to funding the “Middle Mile” Look for supplemental funding Look for supplemental funding Investigate ALL possible solutions Investigate ALL possible solutions Look at interesting public-private partnerships Look at interesting public-private partnerships

Questions/Comments Erik Glenn Area Assistant Agent Community Resource Development Arizona Cooperative Extension 1955 E Sixth St Tucson, AZ (928) FAX: (520)