Commentary, NC Budget and Tax Center

Digital divide in NC is a classic market failure, and requires proactive solutions

If you live in an affluent neighborhood in the Research Triangle, Charlotte, or a handful of other metropolitan areas in North Carolina, chances are you’ve seen crews working roadsides over the last year installing fiber optic cable. Maybe you’ve already signed up to boost your internet connectivity and know what a revelation it can be to have a world of people, experience, and commerce at your fingertips.

On the other hand, if you live in a community with little or no access to broadband, the story is quite different. Maybe you’ve sat in a library parking lot while your children do homework, or struggled to keep up with business competitors, or raged while a video of your grandchild’s first steps refused to load.

A new report from the North Carolina League of Municipalities documents the dire need to expand broadband access across the state, and lays out some of the steps we can take to make that happen.

“One of the primary functions of government is to build the infrastructure networks people need to sustain their lives and livelihoods. Today, high speed broadband joins transportation, electric, water, and natural gas networks as a component of basic infrastructure services that Americans expect to be provided”

(For anyone interested in joining the conversation about broadband solutions in North Carolina, an upcoming event on April 20th at the NC Rural Center provides a great opportunity).

The digital divide in North Carolina is a classic market failure. While private internet service providers rush to capture lucrative urban markets, they do not always invest in small towns and rural communities. This lack of investment isn’t a moral failing on the part of big telecom companies, they have a fiduciary obligation to shareholders to maximize return on investment and it is often more expensive to serve sparsely populated communities. Still, the result is that many North Carolina communities are falling farther and farther behind their urban neighbors. This is precisely the kind of situation that requires public investment and public-private partnerships to overcome the failure of the open market to deliver a necessary public good, as we have done with public education, roads, airports, parks, and other vital public needs that are often under-provided by the private market.

Given the growing economic and social importance of reliable broadband, its time for state and local governments in North Carolina to develop solutions that make sure no community is left behind.

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