08/20/2011 10:02 am ET | Updated Oct 20, 2011

Obama Administration Is Sending Mixed Signals on Rural Economic Development

This week President Obama is traveling to Iowa, Minnesota and Illinois on a three-day economic bus tour to discuss ways to grow the economy, strengthen the middle class, and increase employment in rural America.

It is a worthy goal, given the importance of rural America to the economy. However, when it comes to the Obama administration promoting broadband development in rural America -- a prerequisite for economic growth -- the left hand may not know what the right hand is doing. The Obama administration is sending decidedly mixed signals about its view of telecom and broadband access in rural areas.

The strength of rural America and the future of our economy are dependent on federal agency policies that work together -- not in conflict. One agency moving in the wrong direction will quickly unravel progress that has already been made, and jeopardize the economic recovery in rural America.

The telecom industry has come together to develop a consensus framework for regulatory change that puts our nation in a position to compete globally with countries that have made broadband deployment a priority. Just as diverse telecom companies have worked together to craft this consensus plan, our federal agencies, too, need to be working in tandem.

On one hand our country has the U.S. Department of Agriculture's Rural Utilities Service (RUS), which has been playing a critical role in rural economic development by providing loans to help build and maintain rural utilities, such as electric, telephone, water and waste. Most recently, and perhaps most importantly, RUS has begun providing loans specifically for broadband deployment to small rural broadband companies who are often the only source of telecommunications services in their area.

Thanks to these RUS loans, more rural Midwesterners are seeing the benefits of the telecommunications revolution that has been sweeping across our nation and the globe.

With rural broadband, young rural residents can telecommute to work instead having to move away to find jobs. Rural small businesses have access to many new customers. All residents have access to telemedicine and tele-education services that previously required mutli-hour drives each way. Local police, paramedic and fire departments have access to real time information to help them in an emergency.

On the other hand, a proposal by the Federal Communications Commission (FCC) announced earlier this year threatens to bring higher rates and declining levels of telecom service to much of rural America. This would be devastating to many rural communities who rely on these companies.

If the FCC is successful in changing the rules as they propose for how these small providers are compensated, there would be significant consequences. At a minimum, prices could quickly double or triple. At a time when families are struggling to make ends meet, the size of this increase would make broadband unaffordable.

More likely, many broadband carriers would have to stop building out new networks and reduce investment in maintaining and upgrading existing ones. In some cases, companies would go out of business, stranding rural communities without any service.

Rural carriers are justly proud of the broadband service networks they have developed to serve their customers. Providers have delivered unmatched benefits to millions of Americans, along with numerous businesses and state and local governments.

Recently, three associations representing rural telecommunications providers joined other stakeholders in submitting an industry consensus plan for policy reform that will support the deployment and continued operation of rural networks by providers of all sizes. This plan will support economic growth in rural America by providing rural residents and businesses with affordable broadband service. You can learn more about the proposal and get involved in the debate by visiting

If President Obama is serious about promoting economic development and jobs during his trip to the Midwest this week, he should urge the FCC to embrace the industry consensus plan.

Shirley Bloomfield is chief executive officer of the National Telecommunications Cooperative Association.