Assessing the potential impact of telecommunications technology upon rural economic development, this study for the Economic Development Administration (EDA) employs data assembled and analyzed from the following: "informed experts;" research information and demonstration projects; and federal legislation, research, and agency interests. The intent was to provide information helpful for determining national policy about telecommunications research and development as related to rural areas; up to now, most attention has been on urban areas. The report covers demonstration projects in community, rural business, and economic development; education; health; information dissemination; and entertainment/recreational/cultural programming. The study shows: social and entertainment services have not been subjects of major demonstration programs, cost benefits are largely unexplored due to lack of measurement indicators incorporating quality of life factors, major projects should be regional in scale, importance of software programming is often neglected, effective telecommunications technologies can increase government efficiency, rural residents generally accept new technologies, a paucity of concrete findings exists, telecommunications programs can be comprehensive and pervasive. Recommendations involve legislation, regulation, public/private sector involvement, EDA's role. (RS)