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What the census means for Rural America.

Arural nation at the time of its birth, the United Slates has been urbanizing ever since. In recent years, slowing population growth, combined with continued migration to metropolitan areas, has led to population losses in some rural areas.

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The 2010 census results show that these demographic trends are continuing, posing challenges for many rural telcos. Yet in close-up, the picture is far more complex, and telcos that take a detailed look at their service areas can sometimes find opportunities to capitalize on the shifting population.

Overall, the census counted 308.7 million people in the United States, 9.7% more than the 2000 population of 281.4 million. This rate of growth, the lowest since the 1930s, continues a steady deceleration (interrupted only by the 1990-2000 decade) that began after the post-World War II baby boom.

Metropolitan areas outpaced the national average, growing at 10.8%. Growth was concentrated not in the metro centers but in outlying areas such as Kendall County, Ill. (50 miles from Chicago), and Pinal County, Ariz. (50 miles from Tucson). Micropolitan areas--a new term that refers to areas where core city populations are between 10,000 and 50,000--grew at a below-average rate of 5.9%. And rural areas with no urban core grew very slowly at 1.8%.

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Counties Count

Population growth rates were strongly related to county size. The smallest counties, with less than 5,000 people in the 2000 census, lost 4% of their population on average, and counties whose 2000 population was between 5,000 and 10,000 had no change on average. From that point, growth rates increased with county size, peaking in the 100,000-250,000 range, but declined for the largest counties.

County size wasn't the only factor that affected growth. Another long-term trend--the movement of population from the Northeast and Midwest to the South and West--remained very much in evidence during the 2000-2010 decade. The color-coded county map on the next page makes these regional trends clear. Large swaths of green (for growth) in the West, especially the Southwest; in eastern Texas; and in the Southeast are balanced by the ribbons of dark purple (for loss) that run through the Great Plains and along the lower stretches of the Mississippi River, and by lighter shades of purple throughout the lower Midwest and mid-Atlantic regions.

Some areas diverged sharply from national trends due to local economic circumstances. For example, Wayne County; Mich., the 11th largest county nationwide in 2000, lost nearly 12% of its population due lo the decline of the domestic auto industry San Juan County Colo., the eighth smallest county nationwide in 2000, grew by 25% (admittedly only 141 people) by successfully transitioning from a mining economy to a tourist economy

Even county-level census data can obscure the complexity of changes at the local level and of shifts during the years between censuses. For Brunswick County, N.C., the census reported an astounding 47% growth from 2000 to 2010, but Allen Russ, general manager of Atlantic Telephone Membership Corp. (ATMC; Shalotte, N.C.), the cooperative that serves that area, said all of the increase took place before 2007. After 2007, growth "came to an absolute, screeching halt" for several years and has only begun to recover.

Brunswick County had become a magnet for tourists and retirees from the North who appreciate the region's accessibility, balmy weather, beautiful beaches and plentiful golf courses. Dozens of new housing developments near the beach and on barrier islands were started during the early part of the decade. "We enjoyed amazing growth here until the economy started to slow down and the housing bubble burst," Russ explained. At that point, manv buyers and would-be buyers were unable to sell their properties in the North and move to North Carolina.

As construction ground to a halt, many construction workers left as well, exacerbating the housing glut. New houses in Brunswick County were sold at discounts of one-quarter to one-third below construction cost until the inventory was cleared out--an unexpected bonus for some local residents who then purchased homes they could not have afforded otherwise.

Though a number of service providers were left in 2007 with stranded assets in unfinished housing developments, ATMC was not one of them. Russ had used a "pay-as-you-go" strategy, hiring electrical contractors to place innerduct in the trenches they dug for electric power lines. Only when houses were actually built did ATMC pull fiber through the ducts and invest in customer-premises equipment. As a result, Russ said, "We're well-positioned but not overly invested." When new houses are built, he can get fiber to them in a matter of days. However, though building permits have increased in 2011, Russ does not expect the growth spurt of the early 2000s to return to Brunswick County any time soon.

The change in the region's demographics has helped shore up the company's revenues despite the recession. ATMC's long-term customers, buffeted by high unemployment and low wages, are increasingly giving up landline telephone service and either forgoing broadband altogether or downgrading to lower tiers (though they rarely give up cable TV, since few entertainment options exist). In contrast, wealthy retirees moving into gated communities tend to "buy all the services you've got/' including security, Russ said. The decision that ATMC made in 2005 to bring fiber to the home (FTTH) to all new housing developments proved prescient since these networks will support any new services that become available.

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BEK Communications Cooperative's (Steele, N.D.) service area is at the other end of the spectrum. Kidder County, where Steele is located, lost 12% of its population last decade, and of the five other counties BEK serves, four also lost population--Emmons County (18%), Logan County (14%), McIntosh County (17%) and McLean County (4%). Only one, Burleigh County, gained popula-tion, and most of that gain was in a part of the county closer to Bismarck, outside of BEK's service area.

"Most of the population in our area is aging. That, coupled with people moving out of the smaller towns and away from the area or to bigger cities, is what we are seeing account for the population decline," said Jen Raab, BEK's marketing supervisor. "Additionally, we don't have a college in our territory, so when kids graduate from high school, they're likely to move to another town for their higher education. After that ... we don't have enough business opportunities in our area for most students to return. Over the last 10 years, we've lost nearly 1,000 access lines and 600 members."

Raab doesn't foresee any significant changes to these trends, but BEK has taken several steps to preserve its financial integrity and continue to serve the remaining population. First, it has contributed to the region's economic viability by replacing its plant with FTTH, which now serves two-thirds of customers and is slated to serve 100% within just a few years. "We have a progressive board of directors that has understood for years how' integral fiber is to the industry," Raab explained.

Because FTTH makes home-based businesses and telecommuting more practical--farmers/ranchers are far more dependent on the Internet than they were in the past--it increases economic opportunities in the region, as BEK's customer surveys have shown. "As time goes on, the percentage of our customers using [the Internet] for work continues to rise," Raab said.

Another step BEK has taken is to offer Internet and computer classes geared toward the adult population. The classes, held twice each year, have proven very popular. "We try to build their confidence with informal instruction and show them that computers and the Internet are not as scary as they may have previously thought," Raab said, adding that a number of members have signed up for Internet service as a result.

The most important step BEK is taking to address the challenges of a declining population is to expand its service area. After carefully studying population trends in the region, the company identified an area of Burleigh County between its co-op territory and Bismarck, the state capital, that was growing but underserved--a promising area to enter as a competitive provider.

"The growth around the Bismarck area will continue," Raab said. "A lot of people are building homes outside of Bismarck. ... Most of these new developments can be served by BEK." When the broadband stimulus program was announced, BEK surveyed the area's residents, determined that they met the program's criteria and went through what Raab described as the "grueling process" of winning the stimulus award. Today, the first customers in that area are being connected to the BEK network.

"That's what we are doing to balance the decline in the population and lines," Raab said. "We're definitely going to see growth now and for years to come because of that."
U.S. Population Change 1950-1960 to 2000-2010

 1950-60 1960-70 1970-80 1980-90 1990-2000 2000-10

Growth in 28.0 23.9 23.3 22.2 32.7 27.3
millions

Percentage 18.5 13.3 11.5 9.8 13.2 9.7
change

Note: Table made from bar graph.


Masha Zager is a freelance writer. She can be reached at mashazage@bridgewriter.com.
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Author:Zager, Masha
Publication:Rural Telecommunications
Article Type:Cover story
Date:Jul 1, 2011
Words:1529
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