rural telecommunications : a strategy for community development

Poticy Studies Journal, Vol. 20, No. 2,1992 (289-300)

Rural Telecommunications: A strategy forCommunity Development

Robert H. Wilson

The developmeni policy community in the United States has been slow inrecognizing the implications ofthe transition firam plain old telephone service (POTS)to advanced telecommunications systems and capabilities. Federal, state, and localgovemment policies and programs rarely recognize the fundamental change occurringin this infrastructure and its critical role in the new economic reality faced bycommunities, the country, and the world. Whether or not one fully accepts the tenetsof "Post-Industrial Society" or the "Information Age." there can be no question aboutthe growing importance of telecommunications in all spheres ofthe national economy.And it is especially true for rxiral America.

The record on providing new infrastructures for rural America has generallybeen one of wise public policy choices and rational public intervention. The provisionof telq)hone service (the result of a commitment to universal service found in theCommunications Act of 1934 and. especially, the Rural Telephone Act of 1948) andof electricity to rural America suggests that we have in the past come to terms with thechallenges and potential represented by rural America. To date, however, the samelevel of recognition and public commitment to rural areas for the new telecommuni-cations technologies has not emerged (Parker, Hudson. Dillman. & Roscoe. 1989;National Telecommunications and Information Administration [NTIA]. 1990; Parker.1990).

The focus of this article is to identify types of telecommunications innova-tions in rural areas and to determine origins of the innovation and the policy anddevelopment implications of the innovation.' The cases studied involve a multitudeof actors—local exchange companies, long-distance companies, local fums. branchplants, community development organizations, govemmental agencies, and others—and the potential held by the telecommunications innovation varies among them. Aformal cost-effectiveness study of these innovations, given the multitude of actors withdiffering interests, was not appropriate nor attempted. Rather, this article presents theresults from one element of our study—the impact of telecommunications in mralcommunity development. Two dimensions are of particular concem: (a) whethertelecommunications can facilitate the community development process in rtiral areas,and (b) the means by which telecommunications innovations are incorporated in thedevelopment process.

Contributing to the lack of commitment to rural telecommunications infra-structtire is uncertainty conceming the impactof telecommunications advances in mralareas. One critical element of this uncertainty is whether the technology will have acentralizing or decentralizing effect on the location of economic activity. Empiricalevidence of both centralizing and decentralizing tendencies exists, but at present it isnot clear which will dominate.

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Advanced telecommunications systems may represent a threat to rural areasif they facilitate the general trend toward the weakening of mral America. This canoccur in two ways. Automation in industry—which has an important telecommuni-cations component—is reducing the demand for labor, especially low-skill labor, andthis may hurt rural manufacturing. In addition, because telecommunications enhances"footlooseness" of firms by decreasing some types of transportation costs, firms mayleave mral areas for the city where other types of economies, especially economies ofscale, can be realized. For example, if routine activities for banking, shopping,medical, and other services can be conducted over telecommunications systems, morecentralized facilities will emerge to serve mral areas. In other words, telecommuni-cations technologies may have a centralizing effect on the location of economicactivities.

The enhanced footlooseness of firms resulting from telecommunicationsadvances may. however, work in the opposite direction. Certain information-intensiveactivities, such as back-office operations, may no longer be tied to urban locations andmay be able to decentralize to small towns or rural areas. To date, the testing of thesehypotheses involves largely anecdotal evidence. There is reason to believe there willbe both centralizing and decentralizing effects of advanced telecommunicationssystems. Although the question of centralization versus decentralization is important,it is not the primary focus of this article.

Conceptual Model for Rural Telecommunications

Telecommunications is defined as communicating over a distance. Newtelecommunications technology greatly diminishes the locational impact of distancewhen acompany's product is information. In the same way that POTS diminished theneed for physical proximity in person-to-person communications, the digitization ofinformation and its transmittal. using various media, reduce the influence of distancefor other forms of communications such as data exchange. This result has particularimportance for mral areas. The relatively large distances between residents andeconomic activities in mral areas create substantial transaction costs, but these costscan be diminished if the real effect of distance can be reduced. Telecommunicationsholds precisely this potential for rtiral areas. In addition to reducing the costs ofdistance, telecommunications advances hold great promise for improving productivityfor many types of economic activity (Wilson & Teske. 1990; Dordick & Williams.1986).

While telecommunications advances hold potential for mral areas there aretwo important conditioning factors: the availability of advanced telecommunicationsnetworks and the adoption ofthe new technology by potential users. The availabilityof advanced networks depends in great part on both local exchange companies(including the large regional operating companies of the Bell system, many smallindependent telephone companies, mral telephone cooperatives and electric utilitycompanies) and the regulatory environment in which they operate. The adoption ofthenew telecommunications technology depends on potential users having information

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about the technology and the users' identification of relevant applications. Thisdimension of innovation diffusion is particularly problematic in rural areas as will beseen below.

When considering the role of telecommunications in rural development, onecan distinguish between horizontal and vertical communications needs. Horizontalcommunications are those that occur within a community or between adjacentcommunities. Vertical communications refer to interactions within an institutionalhierarchy (a field office communicating with a central office), as well as the interactionbetween an individual and a nonlocal (regional or national) market or information database. These two forms correspond roughly to differences of communications withina local telephone exchange, or between adjacent exchanges, and of communicationsrequiring the services of long distance lines, interexchange companies, or bypassfacilities.

Community development is a multifaceted process which involves themobilization of resources, public and private leadership, access to funding, andcommunity participation, and which requires extensive horizontal communications.In rural areas, where resource density—especially population density—is low, hori-zontal communications can be relatively expensive, particularly if calls within thecommunity require a long distance toll call to connect to adjacent local exchanges.^ Toovercome this particular problem of horizontal communications, many communitiesand states are exploring and adopting extended area service (EAS). An EAS marketallows calls to be completed across local exchange boundaries without long distancetoll charges, thus facilitating horizontal communications. To establish an EAS districtan agreement must be negotiated between adjacent local exchange companies andapproved by the state utility commission.

Vertical communications come into play in community development whenthe community (or businesses in the community) encounters the need to communicatewith markets, suppliers,govemmentagencies,universities,orothernonlocal resources.This raises several important development issues. First, rural long distance rates havehistorically been subject to favorable treaunent through a cost reallocation system forhigh-cost service areas. Deregulation threatens this mechanism of maintaining lowrates in rural areas. Second, not all rural areas have benefitted from deregulation of thelong distance markets because many rural areas are served by only AT&T. Equalaccess—the term used for providing long distance customers access to more than oneinterexchange company—becomes an option only when the long distance companiesdetermine that a sufficiently large market exists for them to initiate local operations.Finally, to have access to the rapidly proliferating information data bases and advancedservices, a customer must be on a network with reasonably sophisticated switches andhigh speed data transmission capabilities such as those provided by fiber optic cable.Much of rural America does not have access to such a system or has access only througha long distance toll call, placing some areas at a relative, if not an absolute, disadvan-tage.

Even when these capabilities are available, potential users must still be ableto recognize their potential and make use of it. This again is the problem of innovationdiffusion. Given the local franchise monopoly and its unique traditional product.

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POTS, rural telephone companies have tended not to engage in substantial marketing.Nor do traditional development agencies, such as community development agencies,departments of economic development, and extension agencies necessarily haveexpaience andexpertise in telecommunicationsapplications.Theability of communitiesto adopt the new technologies will depend on the action of such agents developing thisexpertise and informing the community of the potential of telecommunications.'

Innovative Telecommunications Applications in RuralCommunity Development

The role of telecommunications in development in five rural communitieswas studied in the project mentioned above." These five were chosen from a pool ofmore than 100 sites generated by an extensive search ofthe literature and conversationswith experts in the field. In addition to confirming that telecommunications innova-tions were playing a role in development, we also wanted diversity in terms of size ofcommunity, economic base, and geography. Information used in the analysis wasdrawn from intensive interviews, by phone and in the field, with a broad range ofindividuals involved in the development process. Our objectives were to identify thesource of telecommunications innovation, the explicit or implicit development strat-egy the innovation entailed, and the overall significance of telecommunications in thecommunity's development effort. We found that a wide range of strategies had beenadopted by the communities, including a strategy designed to attract telecommunica-tions-intensive businesses, one to develop local leadership, and another dependent onextemally-initiated development (see Table 1). The specific role of telecommunica-tions varied: telecommunications appeared to facilitate development (a necessary butnot sufficient condition), permitted increased interaction among local residents(horizontal communications), and allowed for external resources to be brought to bearon local development(vertical communications). In somecases, the telecommunicationscapability was itself a critical factor. In these cases, the availability of advancedtelecommunications technology in a community allowed firms—such as engineering,consulting, and telemarketing—to relocate and to operate efficiently in rural environ-ments. After each case is briefly presented, conclusions drawn from the cases are tobe presented.

Kearney, Nebraska: Kearney, located in south-central Nebraska, had apopulation of around 24,000 in 1987. The town has a relatively large number of largeemployCTS, including Keamey S tate College, a hospital, and three firms with 500 to 650employees. In 1986, the community revised its development strategy and maderecruitment of telecommunications-intensive firms the backbone of the town's de-velopment efforts (Buttress, 1989). This strategy has been successful, and the demandgenerated by the recruited firms has led to the construction of a sophisticatedtelecommunications infrastructure, benefitting the entire community.

Serendipity, however, has played a role in Keamey. First, the owners of atelecommunications-intensive business. Electronic Marketing Resource Group(EMRG), wished to a locate in a rural, small-town environment for personal reasons.EMRG, founded in 1985 in Keamey, is a diversified telecommunications businesswhich provides software, consulting, and data-processing services primarily for

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college financial aid offices. The original company has grown and diversified into agroup of companies with 35 employees. Virtually all of its services are providedelectronically with clients throughout the country.

Table 1The Role of Telecommunications in Rural CommunityDevelopment Strategies

Kearney,Nebraska

Horizontalcommunicationstrategies:

Geographicalredefinitionof community

Communitydevelopmentcommunications

VerticalcommunicationStrategies:

National/intemationat Xmaricets

Branch plantcommunicationswithheadquarters

Nonlocalinformationnetworks

Hailey,Idaho

X

Oahlonega,Georgia

X

X

Ottumwa,Iowa

X

AreaCommon-wealth, Iowa

X

X

While EMRG found its way to Keamey on its own, Cabelas, a major phone-order catalog company for outdoor gear, was actively recruited by the town's chamberof commeree and the Buffalo County Economic Development Council. Cabelas wasfotinded in Sidney, Nebraska, and after outgrowing the labor resources available there,looked for a small town for an expansion. The company was atU'acted to Keamey bythe offer of a good price on a recently vacated 200,000 square-foot building—an offerincluded in the city's recruiunent package—and by a labor pool with large numbers of

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part-time, easily trainable workers. The telecommunications infrastructure wasadequate at that time, but did not present any special comparative advantage.

After successfully recruiting Cabelas, the chamber and economic develop-ment council developed a two-part strategy. First, recruitment efforts targeted high-technology, telecommunications-intensive firms. It was believed that such firmswould attract an advanced telecommunications infrastructure to the community andthereby benefit all companies in the community, the second element of their develop-ment strategy. The demand for telecommunications in Keamey has attracted severallong distance telephone companies (MCI, US Sprint, and AT&T) to Keamey. In fact,AT&T installed equipment required to connect to the long distance network in theCabelas building. Not only are long distance rates now very competitive, advancednetwork services are also available to local firms. To further enhance the attractivenessof the community, Keamey StateCoUege initiated a telecommunications managementdegree program in 1988.

This example illustrates two important dimensions of telecommunicationsand rural development. First, advanced telecommunications can render distanceinsignificant in location decisions of some types of firms; national markets forinformation services can be served in a rural location. It is important for ruraldevelopment policy that such firms and industries be identified not only for purposesof elaborating targeting strategies but also for forecasting the employment character-istics and skill requirements, and impacts on local communities. Second, even a smallcommunity can redefine its economic comparative advantage through telecommuni-cations infrastmcture and its local labor market. There is, however, one negative aspectto this story. While substantial employment has been generated in telecommunica-tions-intensive fums, much of it is low-pay, part-time work. Such work may be suitablefor individuals seeking part-time work, but these are not jobs suitable as the primarysource of income for sustaining a family. An unanswered question remains for furtherinvestigation. Will these telecommunications-intensive businesses have significantdirectand indirecteffects in the local economy, especially in terms of their employmentmultiplier?

Hailey, Idaho: After experiencing economic distress during the 1970s,Hailey grew rapidly in the 1980s and reached a population of around 3,000 by the endof the decade. While its location in the Rocky Mountains and natural beauty helpexplain this growth, telecommunications is also an important part of the story. Thestory begins with a wise decision of Idaho Public Utility Commission (PUC). In 1987,the PUC determined that U.S. West (one of the Regional Bell Operating Companies)was overeaming. Instead of retuming the overeamings to ratepayers, the PUCencouraged U.S. West to upgrade its network by installing digital switches throughoutsouthem Idaho and later encouraged it to install a fiber optic tollway. As a result, ruralIdaho has a very sophisticated telecommunications network.

The wisdom of this PUC remedy is readily observed in Hailey. PowerEngineers, an engineering consulting firm, decided to relocate to Hailey when itsbuilding in Pocatello bumed. Its high-skilled labor force found the recreationalamenities of Hailey to be very attractive; the firm now has around 200 employees inHailey. But with 95% of its business outside the state, and much work overseas, how

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could a consulting fmn requiring extensive interactions with clients survive in a ruralsetting? Through advanced telecommunication technologies and ovemight maildelivery, the firm satisfies its communications needs. The product of engineeringconsulting is information; this product can be digitized and transmitted quickly toclients hundreds if not thousands of miles away. The demand, however, for bettercommunications continues to grow and interactive-video is likely to be the nexttechnology required.

While Power Engineers is a dominant element of the local economy, otherlocal firms are utilizing and benefitting from the new technologies. A real estate firmhas telecommunications links to databases in southem Califomia; a publishingcompany and the many tourist agencies and resorts make extensive use of newcapabilities to reach new markets.

Given the exceptional natural amenities of Hailey, one must not presume thatit represents a model for all of rural America. Nevertheless, there are three importantlessons. First, as in Keamey, telecommunications does provide an opportunity for therural location of nonlocal demand businesses. If information is the product or serviceand extensive face-to-face interactions are not required, rural locations are viable ifadequate telecommunications systems are available. Second, an action by stategovemment, specifically the PUC, can have a very significant effect on growthprospects in rural areas. State govemments have substantial regulatory responsibilitiesunder divestiture, and their decisions can have a profound effect in mral areas(Schmandt,Williams,& Wilson, 1989). Third,localfirmsthatarenothightechnologycan significantly benefit from telecommunications upgrade.

Dahlonega, Georgia: Dahlonega (population of about 15,000) is located 60miles northeast of Atlanta and is representative of that part of rural America that isprosperingasaresultofbeingadjacenttothrivingmetropolitanareas. Alsocontributingto the community's prosperity has been a local development effort that was initiatedin the late t960s in response to economic distress. This effort has been quite successfuland the local economy has diversified. In particular, tourism has become a majorsegment of the economy.

One distinctive characteristic of Dahlonega and Lumpkin County is the long-standing commitment to cooperative activities. Members of the community haverepeatedly come together on initiatives for economic development, education, lead-ership development, and public service delivery. The community was recognized fortheseeffortsandreceivedtheGovemor's All Georgia Community Award in 1986. Thecommunity also benefits from a very progressive local-exchange telephone company.Standard Telephone Company. The company went 100% digital in 1989, one of thefirst companies in the country to do so. It also has 120 miles of fiber optic cable for its40,5(X) access lines and offers equal access to five long distance telephone companies.

Standard Telephone Co., like most small mral exchanges, is an activeparticipant in the community. While the telecommunications infrastructure has notplayed as decisive a role in the development of Dahlonega as it has in Keamey andHailey, availability of adequate telecommunications services has been important.Much of the industrial growth in the area has been in the form of branch plants of fumsheadquartered in other states. Efficient communications with headquarters is impor-

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tant for these plants. A number of firms serve national maricets, requiring competitivelong distance services.'

One telecommunications problem, however, does exist. As in much of ruralAmerica, there are a number of small companies serving northem Georgia. In theDahlonega area, toll charges are incurred for calls of a relatively short distance (local-exchange boundaries are crossed). This produces a long distance charge for a callwithin a single county. Georgia has enacted a law for toll-free countywide dialing(essentially an EAS) which helps resolve this problem. But it reappears in anothercontext A call from Dahlonega to Atlanta is a toll call, thus placing at a disadvantagefirms in Dahlonega with clients in Atlanta.

Dahlonega represents an example of a community that is well-organized andhas had success capitalizing on its comparative advantages. While telecommunica-tions has not played a decisive role, it is recognized in the community that developmentefforts would not have been as successful without an adequate infrastmcture and aprogressive local-exchange company.

Ottumwa, Iowa: Ottumwa, a community of 25,000, experienced dramaticeconomic distress during the 1970s and 1980s as did most small towns in the Plainsregion. The declines in agriculture and traditional manufacturing left Ottumwa withhigh rates of unemployment. The community—with critical extemal support—appears to have come together in developing an effective strategy and the economy ofthe region shows signs of life. The telecommunications story in Ottumwa is quitedifferent than that in the previous case studies. In Ottumwa, telecommunicationsadvances have been used to satisfy the communications needs of the communitydevelopment process itself, particularly in terms of linking local efforts to extemalresources.

Several extemal agents played critical roles in community developmentefforts in Ottumwa. These include an Area Economic Development Office (AEDO)located in Ottumwa, the regional office of the Iowa Department of EconomicDevelopment—the purpose of the regional office is to support local residents inelaborating development strategies—^and the Iowa State University CooperativeExtension Service (CES)— an entity heavily involved in leadership and communitydevelopment. In addition, there were a number of important local organizations.Citizens and business leaders established the Ottumwa Area Economic DevelopmentCorporation (OAEDC) to focus on industrial recruitment. The local communitycollege and the electric and gas utility companies have also been involved indevelopment efforts.

While this is an impressive array of institutions, early development effortsWCTe fragmented. There was a lack of coordination and cooperation among the variousparties. A strategic planning process helped establish a common understanding andagenda in the community. While some argue this effort was not as successful as it couldhave been, the process created links among the various groups and a sound basis forfuture efforts.

The director of the local CES looked beyond the traditional agriculturalconcems and focused on educating and training citizens and leaders for communitydevelopment. To initiate the strategic planning process, an interactive teleconference

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program was held, through facilities at the CES, between the OAEDC and extensioneconomists at Iowa State University in Ames. The use of audio-teleconferencingincreased the number of participants by eliminating or reducing the amount of traveltime.

The importance of telecommunications in this process was two-fold. First,participation ofthe various institutions brought into the process notonly the individualsdirectly involved in these organizations, but also the extemal resources of theseinstitutions. These resourees were called upon through vertical communications, usingadvanced telecommunications technologies. The local telephone network of U.S.West carries EXNET, an on-line agriculture data and electronic mail service thatconnects to each CES county agent's office. Another on-line information data base,Iowa Data Network Service (IDNS), connects AEDO to other regional offices. Thetelecommunications capabilities—such as satellite downlinks available for businessand educational users at theCES office, AEIX),and the community college—facilitatecommunications among citizens and leaders in Ottumwa (horizontal communications)in addition to linking to extemal resources.

One distinctive element of the Ottumwa experience is that the shift from afocus on agriculture development to community development required the coopera-tion of many institutions. These institutions had not cooperated in the past butestablished common understandings and links during the strategic planning process.This form of interaction is classified as horizontal communications, and it appears thatthe need was expressed through face-to-face communications. However, the entireplanning process was facilitated through vertical communications capabilities whichallowed local officials and residents to draw upon extemal information and trainingresources.

Area Community Commonwealth, Iowa: The seven-town group in Iowaknown as the Area Community Commonwealth (ACC) has adopted a clusteringapproach to rural community development. This concept encourages the aggregationof demand for public and private goods and services and the consolidation ofinstitutions to service this demand. The ACC adopted this strategy after recognizingthat the very severe decline in the local economy was not cyclical but structural innature and that these communities would need to band together to protect their qualityof life.

The ACC covers about 36 square miles and has a population of about 6,(XX).The largest town has about 1,200 residents. Iowa State University CES had beenpromoting the clustering concept, and in 1987 its representatives and communityleaders met to initiate this type of strategy in the ACC. Some forms of cooperation havebeen implemented, including ACC loans to four new businesses, sharing of police andemergency service equipment, and junior high school consolidation.

As noted in the Ottumwa example, community development is communica-tions-intensive. This is especially the case in clustering where communications mustoccur over a large area with low population density. Two of the goals of the ACCcluster are directly related to communications. First, the ACC intends to establish aclusterwide telephone directory. While a telephone directory may not sound like amajor development strategy, in addition to simply placing more information in the

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hands of consumers, it reinforces the idea of a community among these seven towns.The second goal is to establish EAS for telephone service within the cluster. This goalrepresents an attempt to eliminate a barrier. Many calls within the cluster are long-distance toll calls and this hinders pooling of public services (who wants to make a longdistance call to reach the local school?) and communication among local residents. TheACC proposal for EAS has actually SCTved as an organizing tool for the community.The proposal is currently before the state's Public Utility Commission but will takeseveral years to be resolved.

The development effort in ACC has had some success but weaknesses arealso evident. The impediment to horizontal communications results firom somewhatarbitrary local-exchange franchise boundaries, and the resulting toll calls reduceinteraction among residents in various parts of the cluster. The solution is obviouslyEAS. The second weakness is that, unlike the Ottumwa case, ACC has not utilized veryextensively the vast data base and information services available on various networks.The utilization of vertical communications—reaching to extemal information re-sourees—has been slow to develop.

Conclusions

The purpose of this article has been to determine the potential that telecom-munications holds for community development in rural areas and the means by whichtelecommunications can be incorporated in the development process. The five mralcommunities studied here clearly show that telecommunications advances can sig-nificantly contribute to rural community development. The potential, which can berealized in many different ways, is largely one of an enabling infrastmcture. Tele-communications innovations generally permit elements ofthe development process tooccur readily. As such, telecommunications is a facilitating component of develop-ment in these communities. Only in Keamey has telecommunications been the centraland critical component of a development strategy.

The means by which the development process incorporated telecommunica-tions varies substantially (see Table 1). Vertical communications linkages generallytake advantage of cost savings associated with telecommunications advances, specifi-cally in terms of reducing the costs associated with distance. Diminishing the effectof distance creates a number of possibilities for rural areas, in terms of both businessesin rural areas and community development efforts.

In terms of businesses, when the principal product or service of the businessis information—such as back-office operations, consulting, and data processing—substantial possibilities for decentralization exist, as in Keamey and Hailey. Bothcommunities show that remote locations are not at any disadvantage as long as theyhave advanced telecommunications capabilities available. Even in fums wheresignificant transportation costs are incurred in shipping, be they mail order firms ormultiplant manufacturing fums, it is possible that the information-intensive operationsmay be separated and are relatively foot-loose. It is important to note, however, thatnot all information activities are easily conducted electronically and that some willcontinue to require face-to-face interaction. These will continue to favor urbanlocations, especially those with good air u^nsportation facilities. Nevertheless, our

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study did encounter instances where telecommunications advances had permitteddecentralization of business activities.

The clearest expression of this potential was found in Keamey, which notonly adopted a telecommunications-intensive business recmitment strategy, but alsoattempted to acquire a comparative advantage for such companies. A variation of thisstrategy is to complement other factors—such as natural amenities or geographiclocation—with advanced telecommunications, as in Hailey and Dahlonega.

In two cases, horizontal communications linkages utilized telecommunica-tions in the community development process itself (see Table 1). In Dahlonega andACC, telecommunications helped to redefine geographical distance and community.POTS may well serve many ofthe horizontal communications needs, but telecommu-nications advances and, especially, intelligent use of the regulatory framework—suchas through the adoption of EAS—can enhance the ability of these needs to be met insparsely populated rural areas. In a third community, Ottumwa, horizontal commu-nications relied on face-to-face interaction and not on telecommunications linkages;vertical communications to nonlocal information networks served as a catalyst in thedevelopment process in the community.

Finally, utilization of existing information networks and data bases dependsnot only on available technology and hardware, but also on the understanding of howto utilize these resources. The effective utilization of new technologies in mraldevelopment will depend on local business, political leaders, and, especially, mraltelecommunication providers understanding the technologies and adapting them tolocal needs and opportunities. In other words, the long-term potential for telecom-munications in rural development will depend in no small measure on the speed ofadoption and imaginative utilization of these new technologies.

* * *

Robert H. Wilson is professor and coordinator of the Ph.D program in public policy at theL.B.J. School of Public Affairs, University of Texas at Austin. His areas of interest are state and localdevelopment policy and telecommunications poticy. Recent artictes have appeared in Monthly LaborReview, Economic Developmeni Quarterly, and World Development. He has also coeditedTelecommunications and Rural Development: A Study of Private and Public Sector Innovation (Praeger,1991), The New Urban Infrastructure: Cities and Telecommunications (Praeger, 1991), andTelecommunicaiions Policy and Economic Development: The New State Role (Praeger, 1989).

Notes

'This article is the product of a broader study of rural telecommunications in Schmandt,WUUams, WUson, and Strover (1991).

'The rather arbitrary rural telephone franchise boundaries makes this a common occurrence.

'Though rural local-exchange companies have not in the past developed marketing strategies,there is obviously a direct incentive for them to do so with the new technologies. The aggressiveness ofthe rural companies was found to be a critical factor in the pace of innovation diffusion.

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'The case studies were undertaken by Lane Bahl, Oswaldo Coelho, Richard Cutler, JuliaMarsh, and Robert Stephens. The complete case studies can be found in Schmandt, Williams, Wilson,and Strover (1991).

'Although an empirical verification was not attempted, it appears that in Dahlonega, advancedtelecommunications capabilities are a necessary though not sufficient condition for development. Thishypothesis has been raised in Parker, 1990, and in the book edited by Schmandt, Williams, Wilson, andStrover (1991).

References

Buttress, S. (1989, Winter). Rural and small town development: The case of Buffalo County, Nebraska.Economic Development Review, 7(1), 49-55.

E>ordick, H., & Williams, F. (1986). Innovative management using telecommunications: A guide toopportunities, strategies and applications. New York: John Wiley.

National Telecommtinications and Information Admirustration (NTIA), U.S. Department of Commerce.(,1990). Comprehensive study ofthedomestic telecommunications infrastructure. Washington,DC: author.

Parker, E.B. (1990). Communications investment to promote economic development. Infrastructureinvestment and economic developmeni: Rural strategies for lhe 1990s. Rockville, MD:Economic Research Service-U.S. Department of Agiiculture.

Parker, E. B., Hudson, H. E., Dillman, D. A., & Roscoe, A. D. (1989). Rural America in the informationage: Telecommunications policy for rural development. Lanham, MD: University Press ofAmerica.

Schmandt, J., Williams, F., & Wilson, R. H. (Eds.). (1989). Telecommunicaiions and economicdevelopment: The new state role. New York: Praeger.

Schmandt,!, Williams, F., Wilson, R.H.,& Strover, S. (Eds.). (1991). Telecommunications and ruraldevelopment: A study of public and private sector innovation. New York: Praeger.

Wilson, R. H., & Teske, P. (1990). Telecommunications and economic development. EconomicDevelopment Quarterly, 4(2), 158-174.

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