Broadband Availability and Access

Broadband Internet access is widely available throughout the United  States to both residences and businesses. areas. Some municipalities also support broadband deployment by funding,  building, and operating networks to provide broadband access to their  communities, much as some cities offer utilities such as water and  electricity. Communities have used federal  funds, issued bonds, and taken out loans to fund the construction of  municipal broadband networks. Federally Funded Efforts to Expand Broadband Encompass but Do Not Specifically Target Small Businesses

Federal broadband programs do not target deployment to small  businesses. Many programs do, however,  have requirements that can result in networks maximizing the number of  small businesses and residences served. Thus, the program’s funding  supports providers who will serve residences and small businesses in  areas of need. Since these programs do not focus on deployment to small businesses,  they do not measure their impact on small businesses, including the  broadband speeds and prices available to them. However, each program  has broader goals and measures, some of which encompass the impact  on businesses. Consistent with this goal, RUS reported in August 2013 that more than  5,800 businesses had received new or improved service as a result of  BIP funding since passage of the Recovery Act in 2009, even though BIP  does not have specific performance targets regarding services to  businesses. Selected Federally Funded and Municipal Networks Have Improved Broadband Service for Small Businesses

		Service Improvements

Federal programs have supported improvements to broadband networks  through grants and loans for expansions, upgrades, and building of new  networks, according to the service providers we spoke with. For example, Intermountain Cable in  eastern Kentucky used a Community Connect grant to expand its  broadband network to Hurley, Virginia. For example, in northwest Minnesota, Garden Valley  Telephone Company used an RUS Telecommunications Infrastructure  loan to upgrade the copper lines in the rural areas it serves with fiber  optic lines, which provide a faster and more reliable connection. According to some providers, these federal and municipal investments  have stimulated competition. We found that prices offered by federally funded and municipal networks  were slightly lower than prices offered by nonfederally funded networks in  the same community and networks in comparison communities. As this  figure shows, prices in all the ranges are generally lower for federally  funded or municipal networks, and at the 4 to 6 Mbps and 7 to 10 Mbps  download ranges, networks in comparison communities tend to have  higher prices than both federally funded and municipal networks and  nonfederally funded networks located in the same community. We found that providers in urban areas generally offer higher speeds than  those in nonurban areas. Small business owners we met with who use the services of federally  funded or municipal networks told us that they made improvements to  their business operations, often because the speed of online applications  was improved, which allowed them to operate more efficiently. NTIA and  FCC provided technical comments, which were incorporated, as  appropriate. Appendix I: Objectives, Scope, and Methodology

This report describes: (1) the federal government’s efforts to ensure the  availability of broadband services for small businesses, and (2) the effect  of federally funded and municipal networks on broadband service and  small businesses. We reviewed program rules  regarding funding applicability and eligibility for FCC, RUS, NTIA, and  EDA programs that provide funding for broadband infrastructure; status  reports for the Broadband Technology Opportunities Program (BTOP)  and the Broadband Infrastructure Program (BIP); SBA’s Office of  Advocacy’s study on small business access to broadband; and reports  from FCC and NTIA on broadband deployment and availability. For  comparison purposes, we also collected speed and pricing information for  all wireline providers in nearby towns that were similar to these locations  in terms of population, income levels, and number of wireline service  providers, but where federally funded or municipal networks were not  present; and in two urban areas in each of the same states. Appendix II: Speeds and Prices Offered by Federally Funded and Municipal Broadband Service Providers That Were Part of GAO’s Analysis, as of September 30, 2013

Appendix II: Speeds and Prices Offered by  Federally Funded and Municipal Broadband  Service Providers That Were Part of GAO’s  Analysis, as of September 30, 2013 Top  available  advertised  speed (Mbps)
Most common speed  subscribed to by  businesses (Mbps)
Information for broadband speed and pricing is reported here only for the Georgia Communications  Cooperative, a member of the North Georgia Network.
Why GAO Did This Study

Increasingly, small businesses rely on Internet-based applications to improve efficiencies and expand market access. Although broadband Internet access is widely available to businesses, areas of the country remain that still have little or no access. Since 2008, federal programs have provided over $15 billion in funding to help deploy broadband to these areas. Additionally, some municipal governments have begun to build and operate networks to provide broadband access to their communities.
GAO was asked to describe issues related to broadband availability for small businesses. This report addresses (1) the federal government's efforts to ensure the availability of broadband services for small businesses, and (2) the effect of selected federally funded and municipal networks on broadband service and small businesses. GAO reviewed documents and interviewed officials from five federal agencies that support broadband deployment and research on broadband availability. GAO interviewed service providers that received federal funding, municipal network operators, and small businesses in four states, and collected speeds and prices for broadband services in selected communities in these states. The states, communities, and businesses were selected based on the presence and use of a federally funded or municipal network.
GAO is not making any recommendations. In commenting on this report, the agencies provided technical comments, which GAO incorporated as appropriate.

What GAO Found

Federally funded programs to expand broadband access encompass but do not specifically target small businesses. These programs—the Broadband Initiatives Program (BIP), Broadband Technologies Opportunities Program, Community Connect Grants, Connect America Fund, Rural Broadband Access Loan and Loan Guarantee Program, and Telecommunications Infrastructure Loan Program—have eligibility requirements based on the need of an area, as well as deployment requirements that can maximize the number of businesses served. For example, the Community Connect grants require providers to serve all businesses and residences in deployment areas. Since these federal programs do not target deployment to small businesses, they do not measure the impact on small businesses. However, BIP has a specific goal to increase access to rural Americans and provide broadband speeds to businesses, and in August 2013, the United States Department of Agriculture reported BIP's funding had resulted in over 5,800 businesses' receiving new or improved broadband service since 2009. Other programs have broader goals and measures related to the program's purpose, such as serving schools and libraries.
Improvements to broadband service have resulted from federal funding and the existence of municipally operated networks. Service providers have used federal funding for expansions and upgrades, such as building out to previously unserved areas and replacing old copper lines with fiber optic cable, resulting in faster and more reliable broadband connections. GAO examined broadband services for 14 federally funded and municipal networks and found they tended to have higher speeds than other networks. For example, in 9 of the 14 communities where GAO collected information on broadband speeds and prices, federally funded or municipal networks offered higher top speeds than other networks in the same community and networks in nearby communities. Additionally, prices charged by federally funded and municipal networks were slightly lower than the comparison networks' prices for similar speeds. Prices for lower to mid-range speed tiers available from federally funded and municipal networks in nonurban areas also compared favorably to prices in urban areas in the same state. However, providers in urban areas were more likely than those in nonurban areas to offer higher speeds. According to small businesses GAO met with, the speed and reliability of their broadband service improved after they began using federally funded or municipal networks. Furthermore, according to small business owners, the improvements to broadband service have helped the businesses improve efficiency and streamline operations. Small businesses that use the services of these networks reported a greater ability to use bandwidth-intensive applications for inventory management, videoconferencing, and teleworking, among other things.