September 25, 2022

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Broadband: Needs of Rural Small Businesses and Federal Programs to Support Them

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What GAO Found

In a 2021 report, GAO found that some small businesses lack access to broadband, but may benefit from federal programs that fund deployment in rural areas. A nationally representative survey by Amazon and the U.S. Chamber Technology Engagement Center found approximately 20 percent of rural small businesses were not using broadband, with about 5 percent using a dial up connection. Small businesses likely benefit from the Federal Communications Commission’s (FCC) and the Department of Agriculture (USDA) Rural Utilities Service’s (RUS) funding to expand broadband deployment. For example, at the time of the 2021 report, FCC had awarded $19.7 billion since 2014 through components of its high-cost programs, and estimated it had served 9.1 million business and residence locations. Both FCC and USDA have also helped increase broadband speeds in rural areas. For example, USDA’s rural broadband deployment program, ReConnect, is mostly funding projects that propose to build fiber, which is generally associated with the fastest speeds available.

Much of the literature GAO reviewed suggests that FCC’s current broadband minimum benchmark speeds—25 megabits per second (Mbps) for downloading and 3 Mbps for uploading—are likely too slow to meet many small business speed needs. For example, a 2019 USDA report stated that as technology advances and volumes of data needed to manage agriculture production grow, speeds above of 25/3 Mbps will likely be needed. In July 2022, the FCC Chairwoman announced a proposal to increase the benchmark to 100 Mbps for download and 20 Mbps for upload.

Small Business Administration (SBA) officials told GAO that their agency supports broadband access for small businesses, especially for those in rural areas, through partnerships with organizations and federal agencies. For example, SBA partners with national organizations that offer technical assistance and training to small businesses on a variety of topics, including how to use broadband to support their business.

Why GAO Did This Study

Some rural areas continue to lack access to broadband, which can hamper operations for small businesses in those areas. FCC encourages the deployment of broadband and provides funding, particularly for rural areas, for this purpose. USDA also provides broadband funding in underserved rural communities. SBA supports small business growth and development, including offering technical assistance to small business owners, which can improve adoption and use of broadband.

This correspondence responds to a provision in the Explanatory Statement accompanying the Consolidated Appropriations Act, 2022 to brief congressional committees on the broadband challenges facing rural small businesses. This correspondence is based primarily on GAO’s prior report on this topic issued in July 2021 (GAO-21-494), and discusses 1) small business access to broadband and how FCC and RUS broadband funding programs may serve small businesses, 2) the extent to which FCC’s broadband speed benchmark meets the needs of small businesses, and 3) support provided by SBA related to rural small business access or use of broadband. For that report, GAO reviewed pertinent literature, documentation on federal broadband funding and relevant FCC statutory requirements to promote broadband deployment. GAO also conducted interviews with small businesses, broadband providers, industry associations, researchers, and state and federal officials, and obtained updates from the agencies for this correspondence.

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