Closing the Rural Tech Gap
Entrepreneurs in small towns often lack adequate access to critical digital infrastructure—but here's how private investment is changing that.
Roger Musick is the kind of entrepreneur who works with local universities to keep engineers in his community after they graduate—the kind focused on creating opportunities for his neighbors, not just himself. Early in his career, he was instrumental in helping bring early fiber networks to rural Midwestern communities. In 1998, he founded Innovative Systems, a company that now provides a turnkey suite of mission-critical software solutions for rural telecommunications providers.
Roger made the conscious choice to base the company in his hometown of Mitchell, South Dakota and has grown the business from 10 employees to nearly 200 today. Those employees probably average three to four people per family, and this an estimated 800 people whom Roger has to consider in his decision-making. In a town of 15,000 people, technology jobs comparable to those Innovative offers can be hard to come by.
There are communities like Mitchell and people like Roger all over this country—innovators in small towns who just need an entry point to create opportunities for others and themselves. Their ideas are as compelling as those coming out of Silicon Valley. Still, entrepreneurs in smaller towns outside of traditional technology hotbeds often lack adequate access to the critical infrastructure that would allow them to take full advantage of the digital economy.
Closing the Rural Gap
For decades, we’ve seen a widening economic, political, and cultural gap between rural and urban America. Roughly 37% of rural communities lack access to the sort of high-speed, broadband Internet service that has become an accepted condition of life in our nation’s cities and suburbs, according to Pew Research.
In an era of widespread rural hospital closures, telemedicine technology can enable doctors in cities to treat patients in outlying areas. But without the reliable delivery of broadband to rural households, there can be no telehealth—or work-from-home or virtual schooling. America risks leaving our rural communities behind.
Entrepreneurs in smaller towns outside of traditional technology hotbeds often lack adequate access to the critical infrastructure that would allow them to take full advantage of the digital economy.
In December, the Federal Communications Commission announced the completion of a reverse auction as a part of its Rural Digital Opportunity Fund initiative. The auction allocated $9.2 billion in funding to deploy high-speed Internet service to more than 5.2 million unserved households and businesses. The proceeds went to cable operators, electric cooperatives, incumbent telephone companies, satellite companies, and fixed wireless providers.
As a condition of the award, approved providers committed to delivering broadband at speeds of at least 100/20 Mbps to 99.7% of locations, with more than 85% getting gigabit-speed broadband. The closing of that auction came just two months after the FCC announced rules for distributing up to an additional $9 billion over the next decade to extend next-generation wireline and 5G wireless broadband connectivity to rural areas.
The successful deployment of this underlying infrastructure is essential because rural America’s economic vitality is at stake, but public investment alone will not get the job done.
Public and Private Investments Must Work in Tandem
Private companies should pick up where public funding leaves off, delivering the “last mile” systems and capabilities that allow rural businesses and households to take advantage of the new high-speed networks. Innovative Systems is one of the companies at the center of that transformation—programming the Billing & Operations Support Systems (BSS/OSS) that support voice, data, and video applications through the expanding high-speed networks laid by service providers in rural communities.
In an effort to accelerate that mission, Alpine has now partnered with Roger and the Musick family to embark on the next phase of Innovative Systems’ growth and investment. For us, this is not just an investment in a market-leading business with a terrific team and strong culture. It is a recognition of the value our nation’s rural communities bring to the expanding digital economy when equipped with the tools they need to compete and thrive.
Technology can enable an increasing number of medical professionals, software developers, and knowledge workers to prosper in smaller, rural communities.
As many of us have experienced, the COVID-19 pandemic has accelerated the viability of remote work and the idea that technology-based businesses can thrive anywhere. In this way, technology serves as a potentially transformational force toward democratization and the geographical spread of economic vitality. High-speed connectivity opens the door to something quite significant: a young person can grow up in a small town, complete their education without moving away and choose to live, raise a family, and build a business in a community that offers the lifestyle they most value.
Technology can enable an increasing number of medical professionals, software developers, and knowledge workers to prosper in smaller, rural communities that historically have been more known for supporting careers in manufacturing, education, and agriculture. The increased diversity and scope of viable professions supported by these communities raise the overall quality of life for all.
A Broader Connection
The challenge moving forward is to continue pushing that digital democratization to all of America. As our nation feels the weight of growing economic and political gaps between our urban and rural areas, bridging the digital divide is a critical effort—a necessary step to making sure that, as a society, we provide widespread economic opportunity for all Americans.
In a time when we seem to define ourselves by our differences, it seems fittingly ironic that broadband technology aimed fundamentally at connecting people sits at the forefront of our next digital opportunity.
Mark Strauch is a partner at Alpine Investors and co-leads its software and tech-enabled services strategy.
