As Austin and Dallas—and, to a lesser extent, Houston and San Antonio—rocket ahead in the high-tech boom, many of the state’s smaller communities are getting left behind. Not only are the economic benefits confined to a certain commuting radius of the major cities, but also young people are picking up and leaving home in search of bright lights and big opportunities. You might call it “crossing the great digital divide.”

Of course, getting left in the dust is nothing new to small Texas towns, where the cycle of boom and bust has seemed as sure as day and night. Plenty of places have felt a kind of Last Picture Show effect: An industry declines, taking with it an entire way of life, and the communities that grew up around it are left to scramble for survival. Oil, cotton, and cattle have all had their heyday come and go, leaving some deadly quiet town squares in their wake.

This time, however, small towns all across the state are determined not to let that happen. They’re busily trying to figure out how to bring Internet business their way, and they’ve got help from the state. Thanks to a law that allows localities with a population of fewer than 500,000 to levy a half-cent sales tax and use it for economic development, many towns have hired consultants and opened economic development offices. Some have also benefited from grants from the state’s $1.5 billion Telecommunications Infrastructure Fund (TIF), which was set up to help connect schools, libraries, and hospitals to the Internet, particularly in rural and disadvantaged areas.

“I think small towns in Texas have shown an incredible resourcefulness,” says TIF executive director Arnold Viramontes, who has traveled to dozens of small towns over the past three years. He points to places like Clifton, a small community west of Waco, where the school superintendent and teachers installed all the computers at the schools themselves. He observes, however, that while the state has gotten a jump on most others in creating electronic networks configured to serve community needs, it’s a little early yet to look for big economic results.

During a recent Texas Community Network Creators’ Conference held in Austin, which brings together civic networkers from around the state, it was clear that there have been no major high-tech miracles out in the hinterlands—no instances of big companies like Dell or Compaq relocating to, say, Poteet or Dime Box to take advantage of the cheaper land prices. Small towns outside the orbit of high-tech centers still face the drawbacks of having a small workforce, being far from transportation centers, and usually, having limited Internet access because of minimal phone service. Some remote Texas towns didn’t even get telephones or electricity until the late fifties. On the other hand, there are plenty of modest success stories, as individuals and small businesses have found a way to use the Internet to boost their income. And for many towns that the Net has yet to rescue economically, it has at least lessened their sense of isolation and brought them some new marketing tools to get the world’s attention.

Take the town of Sanderson, which is one hundred miles east of Marathon, as far from the world of high tech as you can get. It has some beautiful views of the Chisos Mountains and plenty of authentic West Texas atmosphere—Wild Bunch member Ben Kilpatrick, known as the Tall Texan, was killed in a shoot-out near Sanderson in 1912 and is buried there—but the town is a little too far from Big Bend to rake in the tourist dollars, and its economy, once based on ranching and the railroad, has been in steep decline. “Our economy has been devastated,” says Dudley Harrison, a Terrell County judge who has become an Internet advocate in Sanderson. “We lost our railroad terminal, which cost us fifty-one families and a $3 million payroll. And then we lost the wool and mohair incentive, which killed off the sheep and goat business.”

When Hudson and Maggie Kerr shut down the Kerr Mercantile Company, the Sanderson general store that had been in his family for nearly a hundred years, it seemed like the last straw. The store, which sold everything from hardware to groceries, had been an important thread in the town fabric. Hudson had to take a job out of town and commute to work. But the Kerrs, who have been instrumental in creating an economic development plan for Sanderson, found another way to help keep the community together: They started an Internet service provider (ISP), which they named KMC Enterprises.

They’ve found, as have many of their counterparts in remote areas, that running an ISP in the country demands the resourcefulness of a pioneer and an appreciation for small-town and rural culture. Todd Jagger, a professional photographer who runs Overland.Net in Fort Davis, had to learn Unix when he decided to start his ISP. Mary Alice Pate, who started an ISP called Risecom in the town of Jacksonville, says that she has made it part of the community, as she would any other business. “In rural towns people expect chitchat and personal service,” she says. “We get to know our customers, and we get a lot of feedback.”

In 1996 Sanderson became the first town to participate in a new Web service called BluebonNet, which was designed to market tourism in small Texas towns by hosting Web pages promoting their down-home folksiness. It was founded by Texas Rural Communities (TRC), a nonprofit organization started with a federal grant in the thirties. The program began with listings for 21 bed-and-breakfasts in a handful of towns, and it has since grown to fifty lodgings in about one hundred towns that are part of a service called InterActive Vacations that allows communities to interact, via e-mail, with prospective visitors. “We’ve found that the most workable way of using the Web in rural Texas has been in creating tourism,” says John Paul Moore, the director of the Rural Network Foundation, which has a contract with the TRC. “If you have something to offer, your isolation can actually be an advantage. There are people who will pay good money to fly to West Texas to watch somebody shearing sheep. And now we’re working on building a more complete community presence for these places on the Internet.” Moore has designated these online towns as the Smartest Little Towns in Texas.

In fact, while tourism in Sanderson has yet to take off—even after the town was designated Cactus Capital of the World by the state legislature—a number of bed-and-breakfasts and inns around the state have seen a considerable increase in business since they advertised their charms in cyberspace. The Moses Hughes Ranch in Lampasas, for example, used to be mostly vacant during the winter months, but it quickly booked up last year when its owner offered a Web-only package that included tickets for the Vanishing Texas cruise on nearby Lake Buchanan.

Tourism, of course, is not enough to sustain most towns, particularly those without great scenery or appealing festivals. “Not everyplace can be Fredericksburg,” says Carlton Schwab, the president and CEO of the Texas Economic Development Council. “You have to focus on your strengths and not be unrealistic in your expectations.” He might have been talking about Sweetwater, which is faring better than many towns in the region—it is forty miles west of Abilene—as a result of both pluck and luck. “We’re well located, being on Interstate 20 and along two railroad lines,” says Mike Hatley, a Sweetwaterite who is the president of High Ground of Texas, a group of economic developers, city governments, and utilities that have joined forces in search of a small-town boom. While towns like Sweetwater are not likely to attract cutting-edge start-ups, they are able to draw back-office kinds of telecommunications operations such as telemarketing. Among the attractions that Hatley stresses are good hunting and fishing as well as the opportunity for a company to be a big fish in a small pond—and thus be able to sway local public policy.

Another town that has fared better than most is Kerrville, which the Wall Street Journal has called the retirement capital of Texas. While a town that prides itself on its high number of retirees would hardly seem a hotbed of innovation, Kerrville has been an Internet pioneer. Kerrville Telephone Company, a privately held business that has been in business since 1896, was the first telephone company in the state to offer Internet service, and it began offering some of its customers fast ADSL connections to the Internet last September—the same month SBC Communications began offering the service in San Antonio. “Many of our customers retire here from the cities, and they demand all the bells and whistles that they can get in Dallas or Austin,” says company spokesman James A. Miller. Those customers, he explains, are not octogenarian pensioners but well-off younger retirees who use the Internet to track their investments. A huge new subdivision now under construction in the area will offer not only a golf course but also built-in Internet access with every house.

A special case, no doubt—but if other towns can’t be Kerrville, they may actually be able to become something like Hamilton, which has embraced the Internet in a big way and has been rewarded spiritually if not financially. Located about sixty miles west of Waco, Hamilton got its first Internet connections in April 1996, thanks to Larry Anglin, who started an ISP called Hometown Computing. A Hamilton native, Anglin had been working in Austin for National Instruments and made enough money when the company went public that he was able to move back home, into a Victorian house on Main Street with what he calls “the most beautiful wooden floors you’ve ever seen.” Before long, the schools, the hospital, the churches, and the city government were connected, and most of the town’s businesses, from the weekly newspaper to a hog farm, had put up Web pages.

About 60 percent of Hamilton’s households are now connected, versus a national average of 40 percent—a fact Anglin attributes, in part, to the town’s relative isolation. “It’s far enough from any urban area to feel cut off from the world,” he says, “and there has always been a longing to get more and better information here.” Setting up shop early, while the Internet was still new, was also an advantage. “That got people excited, and as more and more people became successfully connected, we hit a critical mass where everyone had to be on.” Even local politics has been affected by the Internet, he says: All of the candidates in a recent election had Web pages.

Anglin’s company has grown to about 24 employees, including, he says, “some very talented people who would be sorely underemployed otherwise.” But what he values most about the Internet, he explains, is “how it has allowed me to live the kind of life I want to live. It has let me live in the town where I grew up and where my father and grandfather grew up. I get to know my family and my community. I spend less than ten minutes a day commuting. The fact that I have a rapidly growing company that is generating a nice income is just icing.”

The wiring of Hamilton brings to mind an observation by John Paul Moore about how the information superhighway is transforming Texas. He recalls a time when the town fathers of Llano were concerned about paving the roads that led to San Antonio. “They were afraid,” he says, “that people would just drive away and not come back.” But it appears that the Internet may be providing a way for many of those people to come back. And for those towns that get bypassed by the information superhighway, the results may be just as devastating as it once was for a town to get bypassed by the interstate.