The revolution in telecommunications technology will be a driving force in the future economic growth of rural areas. Federal and state universal service policies requiring delivery of service to rural areas were major factors in how the telephone system evolved during the 20th century. In the 1990s, telephone penetration rates were similar for rural and urban areas but differed significantly across ethnic groups, income groups, and regions of the country. Between 1994 and 1997, the number of households with personal computers increased about 50 percent, and the growth in modems and email was much greater. However, Hispanics and Blacks lagged behind other groups in these areas. Installation of new telecommunications technology enabling quality data transmission, such as digital switching and fiber-optic cable, is demand-driven and occurs in richer and urban areas first. Since Internet use depends on quality data transmission and the growth of Internet commerce is expected to be a significant part of future economic growth, communities characterized by low income, such as those of Hispanics, other minorities, rural areas, and center cities, are disadvantaged in terms of future economic development. Universal service provisions would address this economic and social challenge, but there continues to be much debate on what universal service should constitute with regard to new telecommunications technology. (Contains 10 references.) (TD)