Why Don’t All Internet-Using Households 

Subscribe to Broadband?

The reasons households do not subscribe to the Internet are similar between rural and urban 

households, with lack of interest being the principal reason. The primary reason cited by Internet 

subscribers for not having broadband service, however, differs across incomes and between urban 

and rural areas. For rural households, lower broadband subscriber rates may stem from 

availability problems in rural settings. While broadband availability has become more prevalent in 

rural areas, many challenges remain for expanding service to households in remote areas. Rural 

areas have, by their very nature, low population density, and lack the economies of scale that more 

densely populated urban areas enjoy. This makes the delivery of broadband Internet services more 

costly per customer for communications companies. Mountainous terrain and increased exposure 

to harsh weather in some rural areas can also drive up the per customer cost of delivering 

broadband service.

Limited availability of broadband service, however, is not the only reason that rural 

households have not upgraded to broadband technologies. Nationally, the largest percentage of 

Internet subscribers who do not have home broadband connections are those who report they do 

not want it (either because they are not interested or because it is too expensive). Since national 

statistics generally reflect the responses of urban residents—who often have access to a range of 

broadband connectivity options—they do not necessarily reflect conditions facing rural residents. 

Indeed, rural residents are more likely to cite a lack of availability in the area as a reason for not 

having broadband.

Service cost is another major reason cited by rural (and urban) residents for not having 

broadband Internet access. Generally, as household income increases, both urban and rural 

residents are less likely to state that broadband is too expensive. Higher income rural 

households more often cite availability rather than cost as the primary reason they do not have 

broadband service.

The higher incidence of rural households claiming that a lack of broadband access is a 

problem in their area helps account for lower broadband subscription rates in rural areas at all 

household income levels. Nonetheless, household income (which directly affects broadband 

affordability) is arguably the most significant factor in household broadband use, though 

education, age, and other variables also have an effect. 

While rural household Internet and broadband subscription rates (at any given income level) 

generally fall below corresponding urban rates, rural areas gained broadband subscribers faster 

than urban areas from 2009 to 2010. This relative gain may be attributed to Federal broadband 

programs that encouraged the geographic expansion of broadband coverage, as well as 

technological innovations and competition that may have led to a decrease in the cost of 

broadband technologies.

Government Policy Encourages 

Broadband Internet Access and Use

The provision of U.S. broadband Internet infrastructure and services is largely privately 

financed. Nonetheless, because of its perceived economic and social benefits, several public 

programs and policies aim to encourage greater investment in rural areas. Government 

broadband policy falls into two categories: (1) programs that encourage investment in hardware 

and software for broadband networks, and (2) programs that encourage greater use of the Internet. 

Most Federal programs have focused on spurring investments, although many education and 

extension programs exist at the State and local levels that introduce individuals to the Internet and 

teach them how to use it. 

Increasing broadband availability is more expensive per customer in rural areas than in urban 

areas, but private service providers have been expanding service in many areas. Federal and State 

government policy has helped drive increases in broadband availability in rural areas, generally 

by leveraging private-sector funds. 

Broadband Is Dominant but Not Universally Used

Starting from nonexistent subscription rates in the early 1990s, the rural Internet subscription 

rate more than doubled between 1998 and 2001 (from less than 4 million households to 8 million 

households). Yearly gains in household Internet subscriptions, however, have slowed considerably 

since 2001. Early adopters (both urban and rural) relied heavily on dial-up Internet connections, 

but use of broadband technologies expanded rapidly starting in 2003 (see box “What is 

Broadband”). Nonetheless, not until 2007 did the majority of the Nation’s households gain Internet 

access using broadband technologies. The majority of rural households did not use broadband 

technologies until 2009.

During this period, broadband technologies evolved rapidly, leading to increases in speed and 

capacity for existing land-line systems and the introduction of new fiber optic, wireless (a form of 

radio signal), and two-way satellite (direct between satellite and the home) Internet services. 

Accessing the Internet through broadband technologies has become increasingly necessary for 

even the most common household Internet tasks due to the rising sophistication of websites and 

their products and services. For example, the heavy graphic content of many websites makes such 

common online tasks as banking, shopping, registering a car, and completing research for 

homework assignments frustrating (if not impossible) for those relying on dial-up access.

The rapid decline in the use of dial-up access shows the importance of broadband technology 

to Internet users wherever broadband is available. A household that subscribes to the Internet is 

now most likely to use high-speed access; 96 percent of urban household subscribers have 

broadband, as do 92 percent of rural households.

 Farmers were early rural adopters of the Internet; farm Internet subscription rates were 

initially above those of rural households as a group when dial-up was the dominant means of 

access. Broadband access rates for farms, however, have been below those for rural households as 

a group, reflecting the more isolated locations typical of farm households. Nonetheless, by 2010, 

farm and rural household Internet and broadband use rates largely converged as broadband became 

more available across the country.

Rural Household Subscriber Rates 

Vary Across the Nation

By 2010, 73 percent of U.S. urban households had home subscriptions to the Internet, 

compared with only 62 percent of rural households and farms, according to Current Population 

Survey (CPS) data. Rural Internet subscriber rates, however, are not uniform across the country. 

On average, rural households in the Northeast and West are more likely to have some form of 

in-home access to the Internet, while households in the rural South are the least likely to subscribe. 

The regional disparity in subscriber rates reflects, to some degree, demographic differences such 

as income, education, and age (see Dwivedi and Irani, 2009; Flamm and Chaudhuri, 2007; and 

Stenberg and Morehart, 2012).

Among rural households that use the Internet, broadband adoption rates are lowest in 

Appalachia and in several areas—such as Michigan and South Carolina—that experienced the 

highest unemployment rates during the Great Recession of 2008-09. Rural broadband adoption 

rates are uniformly below corresponding statewide urban rates.

Year

Farm and rural household Internet subscribers, 2000-11

100

90

80

70

60

50

40

30

20

10

0

Percent of all households

Note: HH means households. As used here, rural areas are synonymous with nonmetropolitan areas, as defined by the 

Office of Management and Budget. Rural and farm HH data came from different sources that surveyed different years, 

although rural households also include the majority of farm households that are located outside of metropolitan areas.

Source: USDA, Economic Research Service calculations based on USDA, National Agricultural Statistics Service, June 

Agricultural Survey, and U.S. Census Bureau Current Population Survey data. 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Farms with any type of Internet subscription

Rural HH with any type of

Internet subscription

Rural HH with broadband

subscriptions

Farms with broadband Internet

subscriptions

Primary reason given by household for not having broadband

Primary reasons given by online households for not having broadband, 2010

45

40

35

30

25

20

15

10

5

0

Percent of non-broadband households

Note: As used here, urban and rural areas are synonymous with the Office of Management and Budget’s definitions of 

metropolitan and nonmetropolitan areas, respectively. 

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population Survey data.

35 36

2

21

2 4

26 27

0

42

1 4

Don't need it,

not interested

Too expensive Can use it

somewhere

else

Not available in

area

Computer

inadequate

Other reason(s)

Urban

Rural

Household income (dollars)

Selected reasons cited as most important for online households that do not 

have broadband (by income), 2010

45

40

35

30

25

20

15

10

5

0

Percent of all online households without broadband

Note: As used here, urban and rural areas are synonymous with the Office of Management and Budget’s definitions of 

metropolitan and nonmetropolitan areas, respectively. 

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population Survey data.

Don’t need it, not interested

Too expensive

Not available in area

28 26

38

29

36

24

49

34

38

25

32

27

14

36

17

42

24

45

urban rural urban rural urban rural

20,000 to 39,999 40,000 to 74,999 75,000 and over

States with no rural counties

less than 55 percent

55 to < 65 percent

65 to 75 percent

over 75 percent

Rural households with any type of Internet subscriptions, 2010

Note: As used here, rural areas are synonymous with nonmetropolitan areas, as defined by the Office of Management 

and Budget.

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population Survey data. 

Rural household Internet subscribers with broadband access, 2010

Note: As used here, rural areas are synonymous with nonmetropolitan areas, as defined by the Office of Management 

and Budget.

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population Survey data. 

States with no rural counties

less than 90 percent

90 to 95 percent

over 95 percent

2 Rural Broadband At A Glance 2013 Edition 3 Rural Broadband At A Glance 2013 Edition 4 Rural Broadband At A Glance 2013 Edition
2009 Edition 2009 Edition

Rural

America

At A 

Glance

Rural

America

At A 

Glance

The U.S. economy moved into a recession in late 2007, led by declines in 

housing construction and related industries, including financial 

services; high energy costs also played a role. Initially, recessionary 

effects were mitigated in nonmetro areas by high commodity prices throughout much 

of 2008, which boosted incomes in farming and mining. Nonmetro areas were also 

less vulnerable than metro areas to a tightening financial sector. 

In late 2008 and early 2009, the recession deepened, with national gross domestic product falling at an annual rate of 6.2 percent. Commodity prices also fell. 

Nonmetro unemployment rose from 5.2 percent in mid-2008 to 9.2 percent in mid2009, while metro unemployment rose from 5.3 percent to 9.1 percent over the same 

period. Both metro and nonmetro areas suffered from the 

contraction of manufacturing, retail, and other sectors. The overall pace of employment decline, however, was greater in metro areas (-3.8 percent) than in nonmetro 

areas (-3.0 percent).

Declining housing prices, combined with a sharp rise in high-cost loans, were 

important factors in the recent mortgage and foreclosure crisis that has affected metro 

and nonmetro housing markets alike. The most recent data show that 

nonmetro residents were slightly more likely than metro residents to have obtained 

high-cost loans just prior to the recession. Foreclosure rates in 2007 and the first half 

of 2008 were similar in metro and nonmetro areas.

Even before the current recession, nonmetro poverty rates had risen slightly in 

the growth years following the 2001 recession, in contrast to the typical trend during 

a time of economic expansion. The nonmetro poverty rate, 15.4 percent in 2007 vs. 

the national rate of 12.5 percent, has exceeded the national poverty rate since 2001. 

Poverty rates were even higher in 2007 for nonmetro children under age 18, at 22.5 

percent.

Employment change, second quarter 2008 to second quarter 2009

Source: USDA, Economic Research Service analysis using data from the Bureau of Labor Statistics.

-17.5 to -3.5

-3.6 to 0.0

0.0 to 14.0

Percentage

Rural

Broadband

At A 

Glance

Rural

Broadband

At A 

Glance

2013 Edition 2013 Edition

United States Department of Agriculture

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

Urban HH with any type of Internet subscription 

Rural HH with any type of Internet subscription

Urban HH with broadband subscriptions

Rural HH with broadband subscriptions

Household Internet subscribers, 2000-10

100

90

80

70

60

50

40

30

20

10

0

Percent of all households

Note: HH means households. As used here, urban and rural areas are synonymous with the Office of Management and Budget’s definitions of metropolitan and nonmetropolitan areas, respectively.

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population 

Survey data.

United States Department of Agriculture

Economic Research Service

Economic Brief Number 23

June 2013

Introduction

With the growth of the digital economy, more economic activities are taking place on 

the Internet, potentially reducing geographic constraints, increasing efficiency, and 

improving growth prospects for rural communities. Rural America, however, may be at a 

disadvantage in reaping the benefits of this growth because rural households are still less 

likely to subscribe to the Internet than are urban households. By 2010, only 62 percent of 

U.S. rural households and farms had home subscriptions to the Internet, compared with 

73 percent of urban households. 

Broadband technology has become the technology of choice for Internet users 

(wherever it is available)—96 percent of urban and 92 percent of rural household Internet 

subscribers use broadband. Nevertheless, broadband Internet connections (which offer 

higher speed Internet access than dial-up connections) are not available as often, nor used 

as readily by rural households as by urban households. 

While both increased availability and increased use may be desirable from a rural 

development perspective, most Federal programs have focused on making the Internet 

more available to individual households. Only $250 million of the $7.2 billion allocated 

by the American Recovery and Reinvestment Act of 2009 (stimulus bill) specifically 

targeted the goal of increasing Internet use among nonadopters who are able to get 

broadband service.

USDA’s Rural Utilities Service (RUS) has been the lead Federal agency for increasing 

broadband access in rural areas through four programs: 

(1) RUS’s traditional rural telecommunication program for improving or expanding 

infrastructure. The program lent over $5 billion to rural telecommunication service providers for 

improving and maintaining their communication infrastructure between 2001 and 2010. As part of 

the loan application, RUS requires that communications facilities receiving RUS financial 

assistance be capable of providing businesses and households with broadband Internet service. 

(2) RUS’s broadband loan program (authorized by periodic Farm Acts—the Food, 

Conservation, and Energy Act of 2008 being the latest), which lent over $1 billion to rural 

providers to build broadband-capable facilities over the last decade. 

(3) The Community Connect Broadband Grant Program, which services rural communities 

least likely to receive broadband service, has provided over $122 million in grants during the last 

10 years.

(4) The joint U.S. Department of Commerce (USDoC), National Telecommunications and 

Information Administration and USDA RUS-administered broadband programs resulting from the 

2009 stimulus bill provided more than $7.2 billion over 2 years. The USDoC administered 

$4.7 billion in grants for all parts of the country, while the USDA-RUS administered the remaining 

$2.5 billion for rural service providers and used these funds to leverage $2.3 billion in grants 

and $1.2 billion in loans. Most of the funds were used to provide new broadband systems, 

though $250 million was set aside for programs that directly attempt to encourage broadband 

Internet use.

The Federal Communications Commission has also recently established the Connect 

America Fund to subsidize broadband service in rural areas (shifting funds from the 

traditional phone service program). Nonetheless, questions have arisen about the effectiveness 

and desirability of this and other broadband subsidy programs, as they have for other government 

programs subsidizing private-sector activities. 

Conclusion

While research suggests that broadband has potential economic value for rural communities, 

variability in the availability and use of broadband infrastructure across the rural-urban landscape 

remains a challenge. Rural households are almost as likely as urban households to use the Internet, 

but they are less likely to use broadband. The lack of universal availability of broadband service 

partly accounts for the lagging usage rates of rural households, although ongoing technological 

changes and government programs have been improving broadband service availability and 

quality in rural areas. A major source of the shortfall in rural broadband subscriptions, however, is 

household preference (driven, to a certain extent, by affordability). 

More Federal, State, and local programs are starting to address this issue since broadband’s 

perceived economic benefits cannot be fully achieved unless it is used. There is also a growing 

perception that the higher the proportion of households that subscribe to broadband, the greater the 

benefits for the national and regional economy (through reduced service delivery costs, increased 

access to market information, and increased educational opportunities, for example).

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of 

race, color, national origin, age, disability, and, where applicable, sex, marital status, familial status, parental status, 

religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's 

income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with 

disabilities who require alternative means for communication of program information (Braille, large print, audiotape, 

etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., 

Washington, D.C. 20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal 

opportunity provider and employer.

Cover photo credits: Shutterstock and Comstock

Data Sources 

Further Information and Contact Person

Data in this analysis are primarily from the U.S. Census Bureau’s Current Population Survey (CPS). The CPS surveys 

a nationally representative sample of households in both rural and urban areas and included a supplement on 

“Internet and Computer Use” in its August 2000, September 2001, October 2003, October 2007, and October 2010 

surveys. Additional data resources include USDA’s June Agricultural Survey, which has provided information on 

Internet and broadband adoption by farm households since 1997. 

References

Dwivedi, Y., and Irani, Z. (2009). “Understanding the Adopters and Non-Adopters of Broadband.” Communications 

of the ACM, 52(1): 122-5.

Flamm, K., and Chaudhuri, A. (2007). “An Analysis of the Determinants of Broadband Access.” Telecommunications 

Policy, 31: 312-326.

National Telecommunications and Information Administration & Economics and Statistics Administration. (2011). 

Digital Nation: Expanding Internet Usage. U.S. Department of Commerce.

National Telecommunications and Information Administration & Economics and Statistics Administration. (2011). 

Exploring the Digital Nation: Computer and Internet Use at Home. U.S. Department of Commerce.

Stenberg, P., and Morehart, M. (2012). "The Existence of Pent-up Demand for Rural Broadband Services: An 

Exploration." Entrepreneurship, Social Capital and Governance. Karlsson, C., Johansson, B., Stough, R. (Eds.), E. 

Elgar Publishing.

Stenberg, P., and Morehart, M. (2011). "Toward Understanding U.S. Rural-Urban Differences in Broadband Internet 

Adoption and Use.” Adoption, Usage, and Global Impact of Broadband Technologies: Diffusion, Practice and Policy. 

Yogesh K. Dwivedi (Ed.), IGI Global.

Stenberg, P., Morehart, M., Vogel, S., Breneman, V., Cromartie, J., and Brown, D. (2009). Broadband Internet's Value 

for Rural America. Economic Research Report No. 78. U.S. Department of Agriculture, Economic Research Service, 

August. http://www.ers.usda.gov/publications/err-economic-research-report/err78.aspx 

For additional information on this topic, please contact Peter Stenberg at stenberg@ers.usda.gov or 

202-694-5366.

What Is Broadband?

The Federal Communications Commission (FCC) has been the arbiter of the definition of broadband in the 

United States. The FCC originally defined broadband Internet service as providing a minimum 200 kilobits 

(kbs) per second. This is much faster than dial-up service, which has a maximum speed of 56 kbs and can 

be as slow as 14 kbs in rural areas. In 2010, the FCC redefined broadband to include any telecommunication 

technology providing 4 megabits per second (mbps) downloading data and 1 mbps uploading data. The 

ever-changing technological capabilities of Internet access service make economic impact analysis and 

discussion of broadband Internet service challenging. In the Current Population Survey data used here, the 

controversial issue of speeds actually attained at any given time is not addressed, and any technology 

capable of attaining the FCC criteria is considered broadband. 

5 Rural Broadband At A Glance 2013 Edition 6 Rural Broadband At A Glance 2013 Edition

Household income (dollars)

Urban HH with any type of Internet subscription

Rural HH with any type of Internet subscription

Urban HH with broadband subscriptions

Rural HH with broadband subscriptions

Rural and urban households with Internet subscriptions by income, 2010

100

90

80

70

60

50

40

30

20

Percent of all households

Note: As used here, urban and rural areas are synonymous with the Office of Management and Budget’s definitions of 

metropolitan and nonmetropolitan areas, respectively.

Source: USDA, Economic Research Service calculations based on U.S. Census Bureau Current Population Survey data.

10,000

to

12,499

12,500

to

14,999

15,000

to

19,999

20,000

to

24,999

25,000

to

29,999

30,000

to

34,999

35,000

to

39,999

40,000

to

49,999

50,000

to

59,999

60,000

to

74,999

75,000

to

99,999

100,000

to

149,999

150,000

or

more