Reaching a Wider Web: Broadband Expansion in Small Cities

by Maggie Switek, PhD, Senior Director, Research Department

As highlighted in this year’s Best-Performing Cities (BPC) report, several small cities have made remarkable progress in expanding their broadband coverage in recent years. On average, small cities increased their proportion of households with a broadband subscription by 8.2 percentage points between 2017 and 2022, with over two-thirds of this growth taking place since the onset of the COVID-19 pandemic. Two cities in Idaho (Twin Falls and Coeur d’Alene) and one city in Utah (St. Geroge) stand out among tier 1 (top-performing) small cities. Over the past year alone, the proportion of households with a broadband subscription grew by 5.4, 4.0, and 2.1 percentage points in these three cities, respectively (based on analysis of the American Community Survey data).

Unlike other aspects of economic growth, however, the expansion in broadband coverage has not been limited to high-performing small cities. In fact, between 2017 and 2022, broadband coverage increased more in BPC’s tier 4 and 5 small cities (which have experienced lower job and wage growth) than in tier 1 cities. Focusing on the bottom-performing tier 5, these small cities have experienced an almost 10 percentage point increase in the proportion of households with a broadband subscription over the past five years (from 76.1 percent in 2017 to 86.0 percent in 2022). This above-average growth has narrowed the difference in broadband coverage between tier 1 and tier 5 small cities, suggesting inclusive growth in this aspect of technological progress.

The growth in broadband expansion across small cities comes at a time of unprecedented developments in federal and state initiatives to expand internet access across the US. As part of the Infrastructure Investment and Jobs Act, Congress set forth $65 billion of investment into broadband expansion, of which $45.45 billion was appropriated to the National Telecommunications and Information Administration (NTIA) under the Broadband Equity, Access, and Deployment (BEAD) Program. Through this program, Congress directed the NTIA to make grants available to US states and territories to expand access to affordable and reliable high-speed internet, particularly among vulnerable (e.g., low-income) communities.

In June 2023, the NTIA announced its planned allocation of the BEAD program’s funding (which was based on the number of unserved and high-cost locations in each state or territory, and other considerations). Texas received the highest fund allocation ($3.3 billion) across all US states and territories. In recent years, small cities in Texas have made considerable progress in expanding their broadband coverage, with six of the state’s 12 small cities having above-average one- and five-year growth in households’ broadband subscriptions. However, 11 percent of households in Texas still do not have internet access (compared to 8 percent in California, the state that received the second-highest fund allocation under the BEAD Program).

As discussed above, the expansion of households’ access to broadband has been more inclusive than other metrics of economic progress. Since the COVID-19 pandemic, many essential services and activities (including education, work, and healthcare) have increasingly moved to online modalities. This has converted the availability of high-quality and reliable internet into a requirement for access to basic needs and income growth. As cities in Texas and other states prepare to spend their initial BEAD funds, the program’s focus on underserved populations will hopefully provide further momentum to the inclusive expansion of broadband coverage across US cities. This could prove key for small cities with historically lower performance to jump-start their growth and ensure equal access to economic opportunities for their residents.