A classic example of an area in which governments could do far
more to catalyze private-sector efforts in underresourced
communities is telemedicine. Only about a dozen states currently
provide reimbursements for telemedical services under Medicaid, the
primary health insurance program for low-income families. As a
result, hospitals often have little incentive to make expensive
up-front investments in tele-radiology, tele-homecare, tele-ophthalmology,
and other well-established telemedical applications. By agreeing to
cover those services under Medicaid, state governments could spur
investments in telemedicine that could yield enormous cost savings
for Medicaid and real care improvements for patients.
Another area involves high-speed Internet connections, without
which telemedicine, distance learning, and many other advanced
applications are far more difficult. In affluent areas, which
experience high consumer demand for high-speed Internet connections,
telecommunication companies have great incentive to rip up streets
and lay fiber optic cable as fast as they can—or build the
infrastructure for wireless communications. In poor urban and rural
communities, the consumer demand is not as obvious; therefore, far
less investment in communications infrastructure takes place.
The federal government could use several approaches to ensure
that poor communities are not bypassed. For example, Congress could
create tax incentives for wireless and broadband development for
low-income communities. Alternatively, the Federal Communications
Commission could, under the authority granted to it in Section 706
of the Telecommunications
Act of 1996, ease the regulatory burden on telecommunications
providers who agree to deploy broadband in low-income communities.
Whatever "carrots" governments offer, the incentives
should be as meaningful as the ones used to ensure the
electrification of rural America. Broadband and wireless
communications soon will become just as important for economic
development as electricity was in the early 20th century.