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Land O’ Lakes CEO calls for big federal spending on rural broadband

October 26, 2020, 11:36 PM UTC

Land O’ Lakes CEO Beth Ford called for $100 billion in government spending to expand high-speed Internet access to rural and underserved areas, and close the ‘digital divide’ that is costing residents there jobs, education, and progress.

Speaking at the Fortune Global Forum, Ford was echoed by HP CEO Enrique Lores, who said the coronavirus pandemic has driven home the importance of the issue. “I think that in the last six months we’ve learned about the many gaps we have in our country, whether it’s the digital divide or systemic racism.”

The numbers are certainly striking. According to the Federal Communications Commission, only 65% of rural residents have access to fixed-line high-speed Internet, compared to 97% of those in urban areas.

Because of that gap, the coronavirus pandemic has been particularly hard on rural families with school-age children, Ford said.

“Teachers are having to drive out to farms with paper homework so that kids can have an education,” said Ford. “It’s unacceptable … This is very basic wiring that’s missing in these communities.”

Basic, maybe – but not cheap. Ford estimates that wiring rural America will cost $100 billion, and she called on the federal government to take a leading role. Ford described rural broadband as a matter of national security, because strong rural communities are vital to America’s food supply.

“We need something like a 1930s rural electrification program to fill these gaps,” Ford said, referring to the Rural Electrification Act (REA), an initiative to fund the creation of rural electrical infrastructure that began under the Franklin Roosevelt administration as part of the New Deal.

As with the current state of rural broadband, market forces had previously failed to expand electrification sufficiently – as few as 10% of U.S. farms had electricity in 1930. But by the mid-1950s, the REA had helped create over 1,000 rural electrical cooperatives and electrified nearly all U.S. farms.

Land O’ Lakes is a cooperative owned by farmers and others in the agriculture industry, putting Ford in close touch with the needs of rural communities. She says a major push for rural broadband is necessary not just to increase educational opportunity and improve job creation in those areas, but because new data-driven approaches to farming promise big economic and environmental advantages. Real-time soil monitoring using connected devices, for instance, can reduce the need for fertilizer, but they need good connectivity to do it.

That points to another important economic benefit of expanding broadband: greater demand for the devices companies like HP sell. That’s exactly what happened during the electrification push enabled by the REA, which led to greater demand for toasters, vacuums, and other modern conveniences.

Democrats in the House introduced a bill with $80 billion for rural broadband as part of coronavirus relief spending. The bill hasn’t made much progress, though states including Tennessee have allocated some of their state relief funding to rural broadband.

Until the federal deadlock ends, Land O’ Lakes and HP are working on their own, smaller-scale solutions to the digital divide. Those include Land O’ Lakes partnering with Microsoft to install rural Wi-Fi, and HP’s Refresh program, which refurbishes computing equipment for donation to lower-income students and schools.

Both Ford and Lores, though, expressed optimism that more ambitious, national solutions are on the horizon, because the pandemic has driven home just how important broadband is.

“I’m encouraged. I’m optimistic,” said Ford. “You have to be an optimist to be a farmer.”