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| MuniNet Research Series | July 2025
A persistent and deeply rooted gap remains across the United States: millions of
Americans living in rural and small communities still lack access to reliable,
high-speed internet. While targeted federal programs like BEAD and RDOF aim to close
this divide, progress has been slow, uneven, and riddled with implementation
challenges.
The consequences are far-reaching - weakening local government operations, stifling
education and healthcare access, hindering economic development, and isolating
communities from digital participation. In today’s world, broadband is not a luxury; it
is a baseline utility. Without it, local governments cannot modernize, citizens cannot
connect, and communities cannot compete.
This paper outlines the current state of the rural broadband crisis, explores its impact
on public service delivery, and highlights the policy landscape - making a clear call to
action: digital transformation begins with digital inclusion.
The term “digital divide” refers to the gap between those with reliable internet
access
and those without. In the U.S., this divide is most visible between urban and rural
regions. While high-speed internet is now ubiquitous in cities and suburbs, many rural
Americans continue to face challenges such as:
• Limited or nonexistent broadband infrastructure
• Internet speeds well below modern standards
• High costs with few (or no) provider options
For local governments in these areas, this isn’t just a technical inconvenience - it’s a
structural barrier to modernization. Access to reliable broadband is essential for
transparent governance, data-driven decision-making, digital citizen engagement, and
participation in grant and compliance processes. Without it, these communities fall
behind - operationally, economically, and socially.
Scale of Rural Exclusion
According to the FCC's 2024 Broadband Deployment Report, 22.3% of rural Americans
still
lack access to broadband meeting the basic threshold of 25 Mbps download and 3 Mbps
upload. This number jumps to 27.7% for Tribal lands. By contrast, only 1.5% of
urban
Americans lack such access - a stark digital divide.
More alarmingly, over 26 million Americans, primarily in rural areas, remain
offline or
underserved entirely - unable to access the digital services and opportunities
that most
Americans take for granted.
Sluggish Progress
Between 2016 and 2021, rural broadband access rose from 47% to only 60% - meaning 40%
of
rural America remains underserved. This slow growth is often attributed
to:
• Low population density (less financial incentive for providers)
• Difficult terrain
• High infrastructure costs
• Policy fragmentation
Mapping the Gap
Efforts to address the issue are often hampered by inaccurate broadband coverage
maps.
Internet service providers (ISPs) are allowed to claim “served” status even if just
one
home in a census block has coverage - leaving many areas incorrectly classified
and
disqualified from funding.
According to the American Society of Civil Engineers (ASCE) 2021
Infrastructure Report
Card, these flaws result in "broadband deserts" - over 200 U.S. counties
with little to
no high-speed access and no clear roadmap to improvement.
Operational Bottlenecks
Many small-town governments rely on unstable or slow internet connections that hinder
the use of cloud platforms, digital record systems, and collaborative tools. Without
broadband, adopting modern e-government tools becomes nearly impossible.
Paper-Based Dependency
In the absence of digital infrastructure, rural governments must still rely on manual
processes for permit applications, public records, and internal operations -
leading to inefficiencies, data loss, and costly delays.
Emergency Services at Risk
Poor internet connectivity compromises emergency response coordination, delays
severe weather and public safety alerts, and restricts the use of real-time mapping or
mobile communication tools during crises.
Civic Exclusion
Public engagement - livestreamed meetings, online surveys, digital comment portals, open
data platforms - is severely limited in these areas. This fosters civic
disengagement and weakens transparency and accountability.
Education
Rural students often cannot access basic online learning tools or submit assignments
from home, creating a significant achievement gap between them and their urban
peers.
School closures during COVID-19 only deepened this divide.
Healthcare
Telemedicine, which became a vital service during the pandemic, remains largely
unavailable in broadband-poor areas. This limits access to specialists, mental health
providers, and chronic care management - increasing health disparities.
Economic Development
Businesses without broadband can’t access e-commerce platforms, cloud-based tools, or
online marketing. Studies show that rural areas with broadband penetration over 80%
experience more than 200% higher business growth and local GDP.
Affordability and Access
Rural residents often face higher costs and fewer provider choices, with
some households
spending 3–4x more per Mbps than those in cities - if service is available at all.
BEAD (Broadband Equity, Access, and Deployment Program)
Launched in 2022, BEAD provides $42.5 billion in federal funding to help states
deploy broadband in unserved and underserved areas. The program now supports a mix of
fiber, satellite, and fixed wireless technologies, prioritizing speed of access
- but concerns remain about the long-term reliability of non-fiber options.
Source: USDA Broadband Program
RDOF (Rural Digital Opportunity Fund)
With $9.2 billion allocated mostly to large ISPs, RDOF has faced significant
issues - nearly a third of funding awards are now in default, affecting service
promises to over 2 million planned connections.
Ogoing Barriers
Despite large budgets, deployment is slowed by:
• Inaccurate broadband maps
• Lengthy grant review processes
• Complex regulatory requirements
• Political interference at the state level
Municipal Broadband
In response, some communities are taking the issue into their own hands, building
local
fiber networks or forming cooperatives. These models have shown great promise -
especially where state law allows local ownership of infrastructure - and offer a
bottom-up solution to the connectivity crisis.
| Community | Challenge | Solution / Outcome |
|---|---|---|
| Deep South “Dead Zone” | No broadband or mobile signal; poor health outcomes | Reliant on DSL or mobile hotspots; limited aid so far |
| Appalachia County | No telehealth or remote learning options | Used CARES/BEAD funding to install fiber in key locations |
| Delaware (Statewide) | Aimed for 100% fiber coverage | Public-private partnership; implementation underway |
Without reliable broadband, rural and small communities remain locked out of the
digital era. They cannot fully participate in government, education, healthcare,
commerce, or civic life. The broadband gap is no longer just a technology issue - it is
a matter of equity, resilience, and national strength.
At MuniLogic, we believe that digital transformation starts with infrastructure.
Local governments should not be asked to modernize with 20th-century tools. The private
sector, public agencies, and local communities must work together to ensure that no
government is left offline - and no citizen left behind.
The digital divide is solvable. But only if we choose to solve it.
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