Thought Piece

High costs and lack of access to broadband service prevent residents of far-flung communities from joining the modern economy

By Jennifer Levitz and Valerie Bauerlein | Photographs by Nick Schnelle for The Wall Street Journal

Jeanne Wilson Johnson drives 4 miles from her 420-acre farm to a gas station in Caledonia, Mo., for better internet service. Photo: Nick Schnelle for The Wall Street Journal

CALEDONIA, Mo.— Jeanne Wilson Johnson raises sheep and angora goats, and to sell the wool and mohair online she drives 4 miles to the parking lot of Roy’s gas station, the closest spot for decent internet access.

At her 420-acre farm, Ms. Johnson pays $170 a month for a satellite internet service too slow to upload photos, much less conduct business.

As in many rural communities, broadband here lags behind in both speed and available connections. Federal data shows only a fraction of Washington County’s 25,000 residents, including Ms. Johnson, have internet service fast enough to stream videos or access the cloud, activities that residents 80 miles away in St. Louis take for granted.

“We don’t feel like we’re worth it,” said Ms. Johnson, 60 years old.

Jeanne Johnson, right, trims wool from a sheep with the help from Virginia Lachance at Ms. Johnson’s property in Caledonia, Mo.

Delivering up-to-date broadband service to distant reaches of the U.S. would cost hundreds of billions of dollars, experts estimate, an expense neither government, industry nor consumers has been willing to pay.

In many rural communities, where available broadband speed and capacity barely surpass old-fashioned dial-up connections, residents sacrifice not only their online pastimes but also chances at a better living. In a generation, the travails of small-town America have overtaken the ills of the city, and this technology disconnect is both a cause and a symptom.

Counties without modern internet connections can’t attract new firms, and their isolation discourages the enterprises they have: ranchers who want to buy and sell cattle in online auctions or farmers who could use the internet to monitor crops. Reliance on broadband includes any business that uses high-speed data transmission, spanning banks to insurance firms to factories.

Rural counties with more households connected to broadband had higher incomes and lower unemployment than those with fewer, according to a 2015 study by university researchers in Oklahoma, Mississippi and Texas who compared rural counties before and after getting high-speed internet service.

“Having access to broadband is simply keeping up,” said Sharon Strover, a University of Texas professor who studies rural communication. “Not having it means sinking.”

Rural America Stuck in Time Lag

Sparsely populated parts of the U.S. have less access to broadband internet service, leaving rural communities with wireless alternatives that are slow and expensive.

Many rural schools have a fraction of internet speeds common at most American campuses. “Sometimes it feels like they get more education, and they get more prepared for their futures than we do,” said David Bardol, a 13-year-old sporting a crew cut and Star Wars T-shirt. He attends Kingston Junior High in Cadet, Mo., one of the communities in Washington County.

At the county’s 911 center, dispatch director William Goad sometimes loses his connection to the state emergency system. That means dispatchers can’t check license plates for police or relay arrest-warrant information.

As severe thunderstorms approached in late February, Mr. Goad tried to keep watch using an internet connection sputtering at speeds too slow to reliably map a tornado touchdown or track weather patterns.

“We drill for oil above the Arctic Circle in some of the worst conditions known to man,” Mr. Goad said. “Surely we can drop broadband across the rural areas

in the Midwest.”

About 39% of the U.S. rural population, or 23 million people, lack access to broadband internet service—defined as “fast” by the Federal Communications Commission—compared with 4% of the urban residents.

Fast service, according to the FCC, means a minimum download speed of 25 megabits per second, a measure of bandwidth known as Mbps. That speed can support email, web surfing, video streaming and graphics for more than one device at once. It is faster than old dial-up connections—typically, less than 1 Mbps—but slower than the 100 Mbps service common in cities.

The intersection of Missouri state highways 8 and 21 in Potosi, Mo.

In St. Louis, speeds as fast as 100 Mbps start at about $45 a month, according to BroadbandNow, a data research company. Statewide, an estimated 61% of rural residents lack broadband access.

Expanding rural broadband is a priority of FCC Chairman Ajit Pai, who grew up in Parsons, Kan., population 9,900. “If you don’t have a digital connection, you are less likely to be able to succeed,” he said.

At a weekly gathering of wool producers at a 1930s-era Craftsman-style bungalow, Ms. Johnson and others snacked on local goat cheese and deer sausage. They talked about internet sites for buying and selling raw mohair, mohair locks and mohair yarn—of which they have a bounty.

But with limited internet service, Virginia LaChance, who keeps sheep and spins wool, said, “We’re not in competition with them. That’s the problem.”

Costly connections

Rural America can’t seem to afford broadband: Too few customers are spread over too great a distance. The gold standard is fiber-optic service, but rural internet providers say they can’t invest in door-to-door connections with such a limited number of subscribers.

St. Louis has more than 5,000 people per square mile compared with 33 in Washington County, according to U.S. Census figures.

One Nation, Divisible

Fiber-optic trunk lines already make up much of the U.S. internet backbone. The trouble is reaching individual rural customers. It costs roughly $30,000 a mile to install optical fiber cable, according to industry estimates, to trench and secure right-of-way access.

Most rural communities rely on existing telephone technology that transmits data over copper lines. Even with upgrades, those lines can’t deliver data at speeds common to fiber-optic networks.

Smartphone service is available but has coverage gaps and isn’t always reliable in rural communities such as Washington County. Even when it works, cell service can’t match the speed or capacity of broadband. “You just can’t compete,” said Brian Whitacre, an agricultural economics professor at Oklahoma State University. “Running a business with a smartphone is not going to happen.”

Alternative internet technologies—satellite dish or fixed wireless, which uses cellular networks to beam data short distances using antennas and transmitters—struggle to handle video streaming or other high-data uses. Those services also typically cap the amount of data used each month.

The 25-bed Washington County Memorial Hospital, which has service of 10 Mbps, loses internet connections often enough that ambulance drivers are told to divert critical patients, whose CT scans are transmitted to specialists, to a hospital 40 minutes away, said Michele Meyer, the county’s interim chief executive.

The city clerk in Irondale, who is connected to the internet through existing copper lines, can’t attach financial reports to email because it is so slow.

The Red Wing Shoe Company’s factory in Potosi, which invested in a fiber-optic line, lost internet service for 30 hours last summer and again in May, outages that delayed shipment of more than 10,000 pairs. The company couldn’t access inventory or print stickers for shoeboxes, said John Gardner, the plant manager: “It brought us to our knees.” Red Wing’s other U.S. factories have backup internet providers, a company spokesman said.

Boots on the production line at the Red Wing Shoe factory in Potosi, Mo.

Such dependence illustrates how broadband has become a basic service alongside telephones and electricity, said Bonnie Prigge, executive director of the Meramec Regional Planning Commission, which aids economic development in eight rural Missouri counties including Washington. Installation of those utilities in the 20th century, she said, took investment and special effort.

In 1935, when just 10% of rural America had electricity, President Franklin D. Roosevelt pledged to get service to almost every far-flung farm. Two decades later, electrification had reached more than 90% of rural areas, said Richard Hirsh, a history professor at Virginia Tech.

By the end of 1954, a federal program had lent $2.9 billion, typically to farmers who formed cooperatives to build and operate electricity systems, said Christopher McLean, of the Agriculture Department: “It’s one of the most amazing American success stories ever.”

Some lawmakers are pressing the Trump administration to include rural broadband in an anticipated $1 trillion infrastructure package. The White House hasn’t said how any such projects might be funded.

“Rural broadband, we need that quite honestly more than we need roads and bridges in many of the counties I represent,” U.S. Rep. Austin Scott (R., Ga.) said at a May 17 House committee hearing on the rural economy.

Secretary of Agriculture Sonny Perdue said broadband connectivity should be seen as the “roads, sewers and water” of the modern age. “The good news is, this is square on the radar scope of the president.” he said at the hearing.

Mr. Pai, President Donald Trump’s FCC chairman, said rural broadband should be included in the expected infrastructure package. He would like to boost subsidies, rewrite regulations to cut red tape and accelerate the FCC’s own processes, he said, which have slowed access to rural broadband.

The Obama administration earmarked $7 billion from the 2009 stimulus package for expanding rural broadband service. Half the money went to a program that the administration estimated would reach 840,000 households and businesses, according to a 2014 review by the Government Accountability Office. There still isn’t a tally of how many were connected and at what speeds, government officials said.

Missouri broadband providers received $261 million of the stimulus money. “The intent was to spread accessibility throughout the state,” said Luke Holtschneider, the state’s Rural Development Manager. “But that program did not on its own continue to expand in the community like you would hope.”

Big River Communications, a St. Louis telecommunications provider, collected about $20 million in stimulus money—half in grants, half in loans—to connect parts of southeast Missouri, including Washington County.

The company set up a tent at the Dickey Bub farming supply store in Potosi, the Washington County seat, and gave away hot dogs to potential subscribers. Plans started at $14.99 a month for students, seniors and low-income households. But the project didn’t quite pan out, said Krista Snyder, executive director of the Washington County Industrial Development Authority.

Big River built a wireless network to transfer data between company towers and devices installed at homes and businesses. The technology is much slower than fiber-optic systems but better than dial-up service, said Big River President Kevin Cantwell.

The $14.99 promotion rose to monthly prices that range from $49.99 on a limited data plan to $99.99 for unlimited use. The prices are for “high-speed” connections—typically at speeds from 2 Mbps and 7 Mbps, the company said.

Big River estimated it would reach 52,000 homes and businesses with its share of the stimulus money. Nearly five years after its first tower began operation it has 4,000 subscribers in seven counties but is trying for more.

Jeanne Johnson pets a sheep at her farm in Caledonia, Mo.

“I just want to know what happened to all the money and grant and things,” said Ms. Johnson, the sheep farmer. “We didn’t see any benefits.”

Mr. Cantwell said parts of Washington County are too thinly populated—and, therefore, too expensive—to reach. “It wasn’t a slight to anybody, but we have to pay the government back and be able to provide for our employees,” he said. “We’ve got to make some money.”

Ronnie Trent, a 44-year-old electrician in Washington County, said more people would sign up if the service was better. “There are enough people out here who are hardworking people who pay their bills and who would pay for that,” he said, but the speeds are “pretty much terrible.” He subscribes, but his wife, a schoolteacher, finds it is too slow to work at home in the evenings.

Self-serve systems

Some rural communities have successfully done the job themselves.

In central Missouri, Co-Mo Electric Cooperative, Inc., a not-for-profit, customer-owned co-op formed in 1939 to deliver electricity, started a fiber-optic network that has built connections to 25,000 members in a region more sparsely populated than Washington County. So far, it has 15,000 subscribers, including non-members in neighboring communities..

Co-Mo’s members, which include farms and businesses, realized they were falling behind, said John Schuster, board chairman of Co-Mo Connect, the internet service. Residents had to drive to the parking lot of a community college to work online. Students at local schools were cut off from the internet.

A fiber enclosure on a power pole belonging to the Co-Mo Electric Cooperative, Inc. in Smithton, Mo. The co-op started a customer-owned subsidiary that operates a fiber-optic broadband network that so far has more than 15,000 subscribers. Travis Bockoven, a contractor, below left, buries fiber cable connecting to a home in Windsor Place, Mo. Rolls of fiber cable at the co-op’s headquarters in Tipton, Mo. Photos: Nick Schnelle for The Wall Street Journal

Rolls of fiber cable at the co-op’s headquarters in Tipton, Mo.

Travis Bockoven, a contractor buries fiber cable connecting to a home in Windsor Place, Mo.

The cooperative, after failing to obtain government subsidies, borrowed $80 million from two private institutions that serve utilities and went door to door asking members to contribute $100 each. In 1939, the co-op asked each member to contribute $5 toward electrification.

Rather than only digging trenches for fiber-optic cable, Co-Mo strung cable along its own utility poles and rented space on others. An estimated 70% of Co-Mo internet subscribers have 100 Mbps service that costs $49.95 a month, Mr. Schuster said.

The co-op’s internet service is doing well financially, Mr. Schuster said, but “the definition of making money for me and for a shareholder from AT&T is going to be two different things.”

Such local broadband systems are tough to duplicate. Nearly all government subsidies go to major telecommunication providers, a legacy of the FCC’s long relationship with phone companies, said Jonathan Chambers, a former FCC strategic planning chief, now a consultant to cooperatives.

Mr. Pai, the agency chairman, said the next phase of FCC subsidies would be open to all types of providers.

While some rural communities have built their own systems, laws in at least 19 states restrict such efforts, generally on the grounds they pose a threat to private companies. A GOP-sponsored bill that set up obstacles to similar broadband efforts stalled this spring in the Missouri legislature.

Every other Thursday, Dr. Stuart Higano, a cardiologist from Missouri Baptist Medical Center in St. Louis, visits the family practice office of Gregory Terpstra in Potosi, Mo., to see patients.

Darrell Dostal, left, talks about his leg pain with Dr. Gregory Terpstra in Potosi, Mo.

The office has internet service at 10 Mbps from CenturyLink Inc., too slow for Dr. Higano to efficiently connect with the database at his hospital to access patient records or view heart images. “Everything in medicine now is electronic medical records,” he said.

Dr. Terpstra, age 69, now has a copper line that connects his office to the fiber-optic cable that runs through town. To get a faster and more reliable connection, CenturyLink said it would have to install 1,000 feet of fiber-optic line to his office and charge the higher monthly fee.

Earlier this year, Dr. Terpstra, dressed in a bow tie and white coat, said he got a quote for fiber-optic service that ranged from $563 a month for 20 Mbps to $1,190 a month for 200 Mbps.

“Does that sound like a good deal?” he said.