Rural America Still Waiting for Broadband

The ever-declining cost of broadband Internet has been a boon to small business owners, allowing them inexpensive access to multitudes of information and millions of potential customers (it's also reason number 27 to be glad you're an American entrepreneur). Nowhere does connectivity seem more critical than in rural areas, where distances can make basic tasks like finding investors and seeking advice excruciatingly difficult.

The Rural Utilities Service, a division of the Department of Agriculture, is supposed to be on the case—doling out subsidized loans to providers of high-speed access in farm country. But, as the New York Times reports, the agency sets strict standards, requiring companies that have not been profitable for two years to have enough cash on hand to cover a full year's operating expenses. As a result, the Utilities Service will lose $2 billion in unused funds if it cannot find a way to loan some $556 million by next September. Critics like Iowa Democrat Tom Harkin have suggested the agency should lower its standards and lend to telecoms that aren't so rich, while the Utilities Service insists it's only trying to protect taxpayer money. Meanwhile, the Times suggests that the program may not be helping rural areas anyway, with much of the money going to projects in the suburbs.

So what's to be done? Should the government be more aggressive in subsidizing broadband access? Or should it get out and leave the job to the private sector?

Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin