Communities across the country are in an economic race.

To compete, they need employers and qualified workers, both of which require a robust information- and knowledge-sharing infrastructure. While some communities are ahead of the pack, others are falling far behind.

A new report from the Federal Reserve Bank of Kansas City — Disconnected: Seven Lessons on Fixing the Digital Divide — focuses on broadband access, economic impact and solutions for communities to narrow the digital divide.

The digital divide refers to the gap between those with and without access to affordable, reliable broadband and the skills and equipment to utilize it.

Today, many parts of the U.S. are left without broadband. Just 53 percent of adults with incomes less than $30,000 have broadband at home. Nearly 68 percent of people without broadband at home live in rural communities.

Based on national data, interviews, surveys and roundtables, Disconnected illustrates that the digital divide affects every aspect of community and economic development and that digital access should capture the attention of every community leader.

Click here to download a PDF of the report. To receive a complimentary hard copy of the report, please send your name, address and organizational information to: Kristi.Bromagem@kc.frb.org

Broadband is a critical component in this economic race.

It allows businesses large and small to reach customers, farmers to deploy resource-saving technologies, and workers to learn critical job skills.

For many Americans, broadband is simply too expensive. For others, particularly those in rural and tribal communities, broadband isn’t available at any cost. A 2016 Federal Communications Commission (FCC) Broadband Progress Report shows 34 million Americans lack access to fixed broadband.

This population is disproportionately low-income and rural:

• Just 53 percent of adults with incomes less than $30,000 have broadband at home, compared with 95 percent of those with incomes above $75,000.
• Nearly 68 percent of those without broadband at home live in rural communities.

Disparities also exist within metropolitan areas. Take Kansas City, for example. According to the U.S. Census Bureau, in 2015 nearly 88 percent of residents in suburban Overland Park, Kansas, had fixed broadband at home, while in urban areas, just 63 percent of Kansas City, Kansas, and 67 percent of Kansas City, Missouri, residents were connected.

Affordable home broadband is just one necessary element to narrow the digital divide. For individuals to be fully included in the digital world, they also need the relevant technical skills and devices necessary for access. That is why efforts to narrow the digital divide–known as digital inclusion–are referred to as a three-legged stool:

1. Affordable broadband access: Access to sufficient bandwidth to conduct data-intensive tasks such as online learning and job research. The FCC defines this as minimum download speeds of 25 megabits per second (Mbps) and minimum upload speeds of 3 Mbps.

2. Computer access: Specifically, access to desktops and laptops. Mobile devices do not provide equal ease of use or functionality for conducting critical tasks, such as applying for jobs or doing homework. Data plan caps on mobile devices also limit the amount of duties that can be performed online.

3. Digital skills: At the most basic level, individuals need computer skills to apply for jobs, access financial services, conduct homework and safely browse the internet. More advanced digital skills, such as those needed for spreadsheets, word processing, email or even computer coding, can help a person earn a living wage.

Why this report is needed:

A robust, stable economy requires that all members have equitable access to opportunity. The Community Development team at the Federal Reserve Bank of Kansas City, along with our peers across the Federal Reserve System, work to raise awareness of issues and advance solutions for low- to moderate-income (LMI) and underserved communities.

The Kansas City Fed relies on a Community Development Advisory Council (CDAC) and countless community partners to stay informed of emerging economic and community development issues across its seven-state region: Colorado, Kansas, western Missouri, Nebraska, northern New Mexico, Oklahoma and Wyoming. CDAC members and community partners recently expressed growing concern over the digital divide’s impact on (primarily) LMI communities.

The Kansas City Fed launched a project in early 2018 to outline issues of the digital divide and identify innovative approaches that communities were taking to narrow it. Through a combination of roundtables with community leaders, one-on-one interviews and an online survey, we solicited and received feedback from more than 160 community leaders. These leaders shared perspectives on what’s working and what isn’t, which programs they admire, and what they wished the broader community would understand about the digital divide.

This report provides a summary of what we learned and opportunities for narrowing the divide. It is not intended to be a technical report. It is instead written for non-experts, to provide them with a holistic understanding of the digital divide and its relevance to a variety of community and economic development fields.

This report also is not exhaustive. Through this study we’ve come across great work that people are doing across the country to narrow the divide. Much of this work is being done in isolation from others who could learn from it. 

Findings are organized by seven key themes that emerged throughout the study. Each theme combines relevant research and statistics, and examples of how the issue plays out in our communities. This approach is intended to provide both data and context on the issues.

The themes include: 

• Awareness: Many lack an understanding of the digital divide.

• Change: The digital divide will never go away. Ever-changing technology means the digitaldivide is a moving target.

• Rural broadband: New business models and/or public funding are critical to servingunprofitable areas.

• Broadband adoption: Work with, not for, the community.

• Digital skills: Teaching digital skills is complex, labor-intensive and requires an element of trust.

• Equipment: Time and adequate equipment are needed to increase adoption.• Evaluation and collaboration: Stakeholders are hungry to learn from others.