Marketplace Logo Donate

Daily business news and economic stories from Marketplace

The Federal Reserve is taking on the digital divide

A reel tender helps install fiber-optic cable onto telephone poles in Louisville, Colorado, in 2001.

A reel tender helps install fiber-optic cable onto telephone poles in Louisville, Colorado, in 2001. Michael Smith/Getty Images

Subscribe to our Newsletters

Almost 40 percent of rural America, or about 23 million people, don’t have access to broadband internet or reliable mobile service. Long term, this digital divide is a huge economic problem. Companies need high-skilled workers, and people without decent internet access can’t find those jobs or get the training they might need to do them. Now the Fed is trying convince businesses that the digital divide is their problem, too, Jeremy Hegle told us. He’s a senior community development adviser for the Federal Reserve Bank of Kansas City. Its territory includes Kansas, Nebraska, Wyoming, Colorado, parts of Missouri and northern New Mexico. The following is an edited transcript of host Molly Wood’s conversation with Hegle.

Jeremy Hegle: I think the challenge is helping companies see what that looks like, right? Like, how do I get to that level when I’m busy just working on the day-in and day-out operations of my business.

Molly Wood: And what specific tools does the Fed have to encourage investment in this direction?

Hegle: You know, at the end of the day, we’re not giving funding to job training, we’re not raising funding, we’re not delivering direct programming. From a structural perspective, under the Community Reinvestment Act that essentially requires that banks invest in the communities they serve, there’s some wording within there that outlines different activities that banks can do to meet the credit needs of their communities. And it includes giving grants and giving loans to programs that support low- to moderate-income populations. And so there are some things that we can do there to help educate banks about how they can invest in programs that provide some job skills training and can invest in broadband deployment. But it’s somewhat limited by the writing of the legislation.

Wood: Do you feel like the overall sort of regulatory framework that we’re in right now is helping or hurting? Could there be more help from the federal government also?

Hegle: So, [this is] my opinion and not the opinions of the Federal Reserve. … There’s a significant discrepancy in what’s available from one community to the next. And our federal dollars are going into it, and we’re seeing more states set up rural broadband commissions and putting some funding into it. But we also know that the regulations may not always be up to par to making that easy to do. And so when I was out in Cheyenne, Wyoming, I was talking to some folks out there that said they have such a high percentage of land that’s owned by the federal government and to run conduit and run lines across federal lands requires a whole other set of regulations. And so if you think about how we deployed electricity 100 years ago, we recognized that it wasn’t profitable for for-profit companies to run the lines out 20 miles to one farmer. So that’s where you got the rural co-ops. And I do think that it’s a sticking point right now in trying to figure out how we get our regulations to be in line with deploying broadband rurally and still supporting our for-profit concept with the internet service providers.

Here are the tech news and events Molly is following this week:

What's Next

Latest Episodes From Our Shows

7:33 AM PDT
2:30 AM PDT
1:45 PM PDT
Jul 5, 2022
Jul 5, 2022
Jun 30, 2022
Jul 5, 2022
Exit mobile version